ARE YOU A FALSE FREELANCER?

The difficult economic situation has affected Spanish companies in many different ways. One of them is the search of alternatives to ordinary staff hiring. As a consequence, the replacement of employees for so-called “false freelancers” has become a very common irregularity in Spanish companies.

But what exactly is a “false freelancer”? The term refers to a person rendering services to a company through a mercantile agreement, even though their work should be executed by means of an ordinary labour contract. It is not difficult to imagine why many companies have decided to adopt this type of mercantile relationship: They simply save a lot of money.

By hiring false employers the company does not have to make the mandatory contributions to the Spanish Social Security and in the case of an “unfair” dismissal the employee would neither be entitled to severance payment nor could they apply for unemployment benefit.

Nevertheless, whether a freelancer should be considered an “ordinary employee” or not, depends on their daily work situation and not on the type of contract executed by both parties.

Accordingly, the Spanish law states that an ordinary labour relationship exists when for example the freelancer is subject to a standard working schedule imposed by the company when they have to be in compliance with their employers orders and instructions, when the company possesses the authority to sanction them, when they uses the company’s work tools and when they receive a periodical settlement.

Therefore, if the above facts are ascertained by Spanish Court, the freelancer would be acknowledged under the rights of an ordinary employee with a regular work contract. In the case of an unfair dismissal, the “false freelancer” would also receive a severance payment of 45 days of salary per year of service.

Moreover, the company will have to reimburse the corresponding rates of contribution for the lack of payment to the Spanish social security, plus a 20% surcharge. In addition to that, very serious administrative fines could be imposed to the company.

To sum up, you can say that employers are advised to be careful because this kind of fraud may turn out to be quite expensive if they get caught.

If you think you might be a “false freelancer”, do not waste your time and contact a lawyer in order to demand your rights. Do not forget that if you have been dismissed, you only have 20 working days to claim your dues.

Written by labour law specialist Fatima Vera