Paris – French authorities are intensifying their efforts to combat undeclared perform, recovering over €1.5 billion in unpaid contributions in 2025 alone. The crackdown, led by the Urssaf – the agency responsible for collecting social security contributions – reflects a growing concern over the financial strain caused by the “black market” economy and its impact on France’s social safety net. This push to address work dissimulé, or hidden work, comes as the government seeks to bolster social security funding amid a significant deficit.
The Urssaf announced the €1.5 billion figure on Friday, February 20, 2026, characterizing it as a confirmation of its increasing effectiveness. While the recovered amount represents a substantial sum, it’s only a portion of the total fraud impacting the social security system. The agency has set an ambitious goal of identifying and addressing €5.5 billion in undeclared work by 2027, with a target of recovering €540 million during that period. This focus on illegal work is driven by the fact that it represents more than half of all social security fraud in France.
The economic cost of undeclared work is significant. By operating outside the formal economy, individuals and businesses avoid paying social security contributions, impacting the funding available for healthcare, pensions, and other vital social programs. According to the Haut conseil du financement de la protection sociale, total social security fraud in France is estimated at €14 billion in 2025, with undeclared work accounting for 52% of that figure. The remaining 48% stems from fraud related to social benefits.
Targeting Key Sectors and Expanding Enforcement
Undeclared work is particularly prevalent in certain sectors, including transportation (VTCs – ride-hailing services), construction, and the restaurant industry. The Urssaf is employing a multi-pronged approach to combat the issue, focusing on improved data analysis to pinpoint potential cases of fraud, strengthening its investigative teams, and forging partnerships with law enforcement agencies like the police, gendarmerie, and the central office for combating illegal work.
The agency is leveraging “datamining” techniques to refine its targeting, allowing for more precise identification of fraudulent activities. This is coupled with efforts to professionalize its inspectors, equipping them with the skills and resources needed to effectively investigate complex cases of undeclared work. Collaboration with other agencies is also crucial, enabling the Urssaf to share information and coordinate enforcement efforts.
New Legislation Aims to Strengthen Penalties and Expand Powers
Alongside the Urssaf’s enforcement efforts, the French Parliament is currently debating a new law designed to further crack down on social security fraud. The proposed legislation, which passed its first reading in the Senate, is scheduled to be examined by the National Assembly starting February 24th. The government anticipates that the law will generate an additional €2.3 billion in revenue in 2026, with €1.5 billion directly benefiting social security accounts.
However, the bill has drawn criticism from the Defender of Rights and various associations, who express concerns about potential infringements on civil liberties. Specifically, they argue that the legislation could grant authorities overly broad access to personal data, including phone records, connection data for France Travail (the French employment agency), and passenger flight information. These concerns highlight the delicate balance between combating fraud and protecting individual privacy.
Penalties for Engaging in Undeclared Work
The penalties for engaging in undeclared work are substantial. For individuals, the fines can reach up to €45,000, with the possibility of a three-year prison sentence. These penalties increase to €75,000 and five years imprisonment if a minor is involved, and can escalate to €100,000 and ten years imprisonment in cases involving organized crime, according to Urssaf’s website. These severe consequences underscore the French government’s commitment to deterring undeclared work and protecting the integrity of the social security system.
While the sums lost to undeclared work are less than those lost to tax fraud – estimated between €80 and €100 billion annually – the impact on social security is significant, particularly as the system faces a deficit of €23 billion in 2025. The government views tackling undeclared work as a crucial step towards ensuring the long-term financial sustainability of France’s social safety net.
Looking Ahead
The debate surrounding the proposed legislation is expected to continue in the coming weeks, with the National Assembly poised to consider amendments and ultimately vote on the final version of the bill. The Urssaf will continue its enforcement efforts, focusing on data-driven investigations and collaboration with law enforcement. The agency’s success in meeting its ambitious targets for 2027 will depend on its ability to adapt to evolving patterns of fraud and maintain public trust in its enforcement methods.
The fight against undeclared work is an ongoing challenge, requiring a sustained commitment from both the government and the public. As France navigates economic uncertainties and strives to maintain a robust social safety net, addressing this issue will remain a top priority. Readers interested in learning more about the Urssaf’s efforts and reporting suspected cases of undeclared work can visit their website at www.urssaf.fr.
Do you have thoughts on this story? Share your comments below.
