Non-payment of Social Security contributions: when it is considered a serious offence and what companies need to take into account

A recent ruling by the Supreme Court once again highlights a particularly relevant issue for companies facing Social Security contribution incidents: non-payment of Social Security contributions may constitute a serious offence even if the documentation has been correctly submitted and even if there was no intention to breach obligations.

Furthermore, the judgment reinforces a particularly strict criterion: economic difficulties arising from COVID-19 are not considered force majeure for the purposes of exemption from sanctioning liability.

The case: prolonged non-payment and a fine of over €185,000

The Labour Inspectorate issued a notice of infringement in October 2021 against a company for failing to correctly pay Social Security contributions corresponding to various periods between November 2018 and June 2024.

Although the company had submitted the contribution documentation on time, it failed to make the actual payment, which falls under the infringement set out in Article 22.3 of the LISOS.

The Council of Ministers initially imposed a fine of €185,721.19, calculated on an outstanding amount exceeding €232,000 and applying the maximum level of sanction.

The company challenged the sanction on several grounds, including:

• Nullity of the sanctioning decision.
• Statute of limitations on part of the contributions.
• Lack of intent or intention to breach obligations.
• Economic difficulties arising from COVID-19.

What the Supreme Court clarifies: key legal points of the ruling

The Supreme Court dismisses the main arguments and establishes several relevant criteria regarding sanctions.

The offence does not require intent

One of the most relevant aspects of the ruling is that the infringement defined in Article 22.3 of the LISOS:

• Does not require intent.
• Nor does it require a specific intention to breach obligations.

It is sufficient to have failed to make payment within the required deadline, provided that the contribution documentation has been submitted.

This means that claiming lack of intent or absence of fraudulent purpose does not exempt from liability.

COVID-19 does not automatically constitute force majeure

The Court expressly rejects the idea that economic difficulties resulting from the pandemic can be considered force majeure.

The law only recognises the following as grounds for exemption:

• Insolvency proceedings.
• Force majeure in the strict legal sense.
• A prior request for deferral that has not been rejected.

None of these circumstances applied in the case analysed.

Statute of limitations reduces both the debt and the penalty

A particularly relevant aspect of the ruling is the treatment of limitation periods. The Court considers that contributions older than four years from the notification of the infringement are time-barred.

Direct consequence:

• If the debt is no longer enforceable due to limitation,
• it cannot be subject to a sanction either.

This significantly reduces the sanctionable base.

In the case analysed, the debt was reduced to €149,450.55, which led to a recalculation of the fine to €119,575.38.

 

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Key takeaways for companies

This ruling leaves three particularly relevant messages:

• Non-payment of Social Security contributions constitutes a serious offence even if the documentation has been correctly submitted.
• No intent or deliberate breach is required for a sanction to be imposed.
• Economic difficulties, even those arising from COVID-19, are not automatically considered force majeure.

In addition:

• The statute of limitations may reduce the debt and therefore the final sanction.
• Proper management of deadlines is crucial in Social Security procedures.

How to prevent this type of sanction

From a labour compliance and Social Security perspective, this ruling reinforces the importance of:

1. Maintaining strict control over contribution payments on a monthly basis.

1. Detecting potential cash flow issues early.
2. Requesting deferrals before falling into non-compliance.
3. Regularly reviewing potential time-barred periods in the event of inspections.
4. Not relying on “good faith” as a mitigating factor.

In Social Security matters, formal compliance does not replace actual payment, and the financial consequences can be significant.

How Adlanter can help you

At Adlanter, we support companies in labour management and in the review of Social Security-related contingencies, including identifying contribution risks and preparing for inspection procedures.

A prior analysis of contribution periods, potential limitations and compliance status helps reduce the financial impact of such procedures and strengthens the company’s position in the event of an inspection.