Contractors and subcontractors: obligations and tools to optimize the success of your project
When a subcontracting agreement is signed between a principal and a subcontractor, it confers responsibilities on both parties. Compliance with these obligations is essential and legally indispensable.
To ensure the success of your commercial and contractual relationship, you need to be aware of the various regulations that govern it, as well as the different tools available to you.
What are the obligations of both parties? What are the penalties incurred, and what tools can help you manage and monitor their services? Find out in this article.
Principal and subcontractor: definitions
The principal, also known as the " project owner" in the building and civil engineering sector, is a natural or legal person for whom a project is to be carried out.
The principal is the project sponsor. He follows the project through all its stages, from inception to completion, including monitoring and control of results. He is the pilot and owner of the project. It is therefore he who defines the various elements that frame the project and the commercial contract:
- the objectives to be achieved,
- the resources (material, financial, human...),
- monitoring methods, etc.
To complete the project, the client calls on a subcontractor.
The subcontractor, also known as the " prime contractor", is a natural or legal person charged with carrying out a job or service on behalf of another natural or legal person (subcontracting company), namely the principal.
👉 Example: You are the principal and in charge of a worksite. You call on one or more subcontractors, or service providers (plumber, electrician, painter, etc.), to help you finalize your project.
What are the obligations of a principal?
Duty of care
With the aim of combating illegal work and concealed labor, Law no. 2017-399 of March 27, 2017 relating to the duty of vigilance of parent companies and companies providing subcontracting services (devoir de vigilance des sociétés mères and ordering companies places obligations on the ordering company, requiring it to verify the identity of its contractor(s).
This obligation of vigilance is based on verifying the identity and status of the subcontractor(s). The client must therefore check that his prime contractor :
- is duly registered,
- is in good standing with Urssaf,
- has a valid status.
💡 The duty of vigilance is mandatory for any contract worth a minimum of 5,000 euros excluding tax.
But that's not all.
According to Articles L. 243-15 and L.8222-1 of the French Social Security Code, as the principal, you must ask your subcontractor/subcontractor to provide you with the following mandatory documents:
- an Urssaf certificate of vigilance less than 6 months old,
- a KBIS extract or an identification card from the trade register,
or
a document containing certain information,
or
the receipt for the declaration filed with a CFE, -
the list of foreign employees requiring a work permit.
💡 According to Decree no. 2015-364 of March 30, 2015 on the fight against fraud in the posting of workers and the la lutte contre le travail illégal, if the subcontractor is foreign, you, as the ordering party, must request additional specific documents:
- the intra-Community VAT number for the EU,
- A1 certificate for EU employees subject to EU legislation,
- a certificate issued by Urssaf for non-EU employees.
Duty of care
The duty of care requires you, as the principal, to verify the authenticity of the documents submitted by the subcontractor(s). This is an essential step, as it involves verifying the accuracy of the information contained in the certificate, as well as its validity (less than 6 months).
To do this, you need to visit the Urssaf website and enter the security code that appears on the attestation.
💡 As the principal, you must check that the subcontractor(s) comply with their obligations when the contract is concluded and every 6 months until the end of the contract's performance.
What are a subcontractor's obligations?
Obligation of result
Once a contract has been signed, the subcontractor or prime contractor is obliged to carry out the work for which he has been hired. He therefore has an obligation of result towards the principal.
👉 Withdrawal is impossible, except in cases where the subcontractor can provide proof of a cause or fault of external origin.
Transparency and traceability
The subcontractor must respect certain conditions of transparency towards the client:
- draw up a contract specifying the obligations of each party, in line with Article 28 of the European regulation,
- provide the client with all the documents and information required to demonstrate the validity of your status, and thus enable audits to be carried out,
- keep a register listing the various principals or customers for whom you carry out work.
What are the penalties, and how can I avoid them?
As a principal, if you fail to meet your obligations of vigilance and diligence, and decide to pursue a business relationship while knowing that your subcontractor's status is invalid, you incur civil and criminal liability.
The principal may also be held jointly and severally liable for several payments owed by the subcontractor:
- remuneration,
- compensation,
- penalties and surcharges.
It may also be obliged to repay sums corresponding to the amount of public aidfrom which the subcontractor has benefited.
👉 Please note: The offence of concealed work is punishable by 3 years' imprisonment and payment of a fine of 45,000 euros.
💡 Our advice for avoiding penalties : adopt online intervention management software, such as Praxedo, a genuine all-in-one platform that supports you in managing and monitoring your intervention and subcontracting contracts. Thanks to its control functions, and its accessibility via app and tablet, you can monitor all your subcontractors' operations in real time, and optimize your interventions!
Using software to manage your subcontracts automates time-consuming tasks, allowing you to concentrate on your core business.
👉 F or example, the software sends you reminders every 6 months to notify you that your subcontractors' documents have been checked. It is also capable of identifying risky information such as missed deadlines to help you best meet your duty of care.
Article translated from French