Upcoming restrictions for subcontracting in the construction, moving, and meat processing industries
17 Oct 2024
As from 1 January 2025 at the latest, subcontractors in the construction-, moving- and meat processing industries will be prohibited from fully passing on contracted work to a next subcontractor in the chain, as well as from retaining only the coordination of the execution of the work.
New subcontracting restrictions
The Act of 15 May 2024 introduced new subcontracting restrictions in the construction-, moving-, and meat processing industries. These new regulations are set to take effect once a Royal Decree has been adopted, but on 1 January 2025 at the latest. They’re aimed at shortening the subcontracting chains in risk-prone industries, with a view of combatting social fraud, enhancing worker protection, and contributing to a fairer and more transparent labour market.
More specifically, once these measures enter into force, subcontractors in the industries in question will be prohibited from outsourcing the entire performance of the agreement they entered into with their co-contractor to a next subcontractor in the chain. In addition, they'll be prohibited from keeping only the coordination of the performance of the agreement.
It is important to highlight that this restriction doesn’t apply to the main contractor, who retains the ability to subcontract the entirety of the agreement they concluded with the principal.
Specific additional restriction and regulations for the moving industry
Moreover, the subcontracting chains in the moving industry may – again as of 1 January 2025 at the latest – consist of no more than three levels. In addition, any subcontractor must inform his own subcontractor(s) in writing of the level at which he is situated in the subcontracting chain.
A system of joint liability for wage - and social security debts, as well as a requirement for attendance registration, both similar to the ones applicable in the construction industry, will also become applicable in the moving industry, as of 1 July 2025 at the latest.
Sanctions
Failure to comply with the upcoming subcontracting restrictions will be punishable with a level four sanction, meaning the penalties can include imprisonment of six months to three years and/or a criminal fine amounting to EUR 4,800 - EUR 56,000, or an administrative fine of EUR 2,400 - EUR 28,000.
Failure to comply with the upcoming system of joint liability and attendance registration in the moving industry will be punishable with a level three sanction, meaning a criminal fine amounting to EUR 1,600 - EUR 16,000 or an administrative fine of EUR 800 - EUR 8,000.
Key Takeaways
As of 1 January 2025, subcontractors in the construction, moving, and meat processing industries will face new subcontracting restrictions that can have a significant operational impact, particularly for subcontractors whose business model heavily relies on fully outsourcing the work they were contracted for, or only retaining the coordination activities. These companies will have to execute the necessary changes in order to remain compliant.
If you have any further questions regarding the new subcontracting regulations and their implications for your business, don’t hesitate to reach out; we’d love to hear from you!
