In the fight against illegal employment and social dumping, the rules for principals, contractors and subcontractors have been tightened once again. Since 1 January 2026, a stricter duty of care has applied in Flanders under the framework of “chain liability” regarding the illegal employment of foreign workers. On 1 January 2025, the ban on financial subcontracting also took effect. The importance of continuously being attentive to the prohibition against loans of personnel also remains high on the agenda.
Prohibition against financial subcontracting
In the construction, moving and meat sectors, it has been prohibited since 1 January 2025 for a subcontractor to subcontract in full an agreement entered into with another contracting party. The prohibition was introduced by article 147 of the Act of 15 May 2024, amending social criminal law and various labour law provisions.
Subcontractors always have to perform some part of the agreed-upon work themselves. It is also prohibited for a subcontractor to retain only coordination of the contract performance.
This prohibition only concerns subcontractors; the principal and the main contractor are not therefore subject to it.
Non-compliance with the prohibition may be sanctioned with a level 4 sanction under the Social Criminal Code, meaning 6 months to 3 years of imprisonment and/or a criminal fine of between 6,000 and 70,000 EUR or an administrative fine of between 3,000 and 35,000 EUR (amounts applicable to infringements committed on or after 1 February 2026).
Chain liability in the Flemish Region
If you are active as a principal, main contractor or subcontractor in the construction, cleaning or meat sector or in the context of parcel deliveries for postal services and you operate within the territory of the Flemish Region, you have to take account of the new rules on chain liability that came into effect for these high-risk sectors on 1 January 2026. The rules were introduced by a decree of 27 June 2025 and a decision of the Flemish Government of 24 October 2025.
Within these high-risk sectors, you now have to meet two conditions in order not to incur criminal liability for the illegal employment of third-country nationals (employees or self-employed individuals who are nationals of countries outside the EEA plus Switzerland):
- You have to have a written statement in which your direct (sub)contractor confirms that they will not employ illegally resident third-country nationals (this is no new obligation); and
- You also have to comply with the new duty of care, which requires you to request a number of documents regarding any third-country nationals from your direct (sub)contractor. These are documents proving that the third-country national is legally resident and working here. The exact documents involved depend on the type of employment. (N.B. this obligation also applies to existing agreements!)
Specifically, as a principal, contractor or subcontractor, you have to request the requisite information from your direct contractor or subcontractor and ensure that the information is indeed available. You have to keep the information at the disposal of the social inspection services should they ask for it.
If the information is not provided to you following your request, you need to report this to the Flemish Social Inspectorate via the electronic reporting portal set up by them for that purpose.
Only if you complete these steps are you compliant with your duty of care and, provided you have a written statement, exempt from any criminal liability regarding the illegal employment of third-country nationals.
If such persons are nevertheless being employed and the foregoing conditions are not met, then as a principal or (sub)contractor you risk a penalty of 6 months to 3 years of imprisonment and/or a criminal fine of between 6,000 and 60,000 EUR, or an administrative fine of between 3,000 and 30,000 EUR (amounts applicable to infringements committed on or after 1 February 2026). The fines are multiplied by the number of employees involved, up to a maximum of 100.
Be careful when giving instructions to anyone other than your own employees!
It is crucial to always strictly comply with the prohibition against the loan of personnel and to ensure your staff and (sub)contractors are aware of that prohibition.
Neither you nor your staff may give instructions to the staff of your (sub)contractors. There are a few limited exceptions to this prohibition:
- Instructions related to aspects of workplace well-being.
- Instructions given in the execution of the work contract: the contract must explicitly specify in detail exactly what instructions the third party may give to the employer’s employees. Any such instruction clause must not undermine the employer’s authority.
- Within the framework of the specific, strictly regulated form of permitted loans of personnel.
If you should nevertheless give proscribed instructions, this could have far‑reaching consequences:
- Your agreement with the (sub)contractor would be declared null and void.
- An employment agreement of indefinite duration would be deemed to exist between you and the (sub)contractor’s staff, effective from the start of the loan of personnel. This would have a major impact: as the “new” employer, you would also be jointly liable for (non-)compliance with all obligations regarding the (sub)contractor’s personnel. For example, in the event of illegal employment, you could be held jointly liable and, depending on the type of breach, would also be subject to penalties.
- You would be jointly and severally liable together with the (sub)contractor to pay remuneration, benefits, allowances and social security contributions.
- You could be subject to an administrative or criminal fine of level 3 under the Social Criminal Code, meaning a criminal fine of between 2,000 and 20,000 EUR or an administrative fine of between 1,000 and 10,000 EUR (amounts applicable to infringements committed on or after 1 February 2026). In each case, the fine is multiplied by the number of employees concerned, up to a maximum of 100. An increase to level 4 is possible where, on the one hand, the employee hasn’t been (timeously) paid the minimum remuneration applicable in the relevant sector or is not paid on the date their remuneration becomes due, and, on the other hand, two or more other infringement are committed simultaneously. It is also possible that a temporary operating or conduct-of-business ban be ordered or that the business be closed down completely.
Get started!
If you are active in a (sub)contracting chain, we strongly advise you to take due account of these obligations and points of attention, otherwise you may risk severe penalties.
It all starts with a well-drafted (sub)contracting agreement that includes clear provisions that formalise these obligations. In addition, you need to make your staff aware of the importance of complying with these obligations and the potential issues. You should therefore provide appropriate training.
We are, of course, ready to assist you in these regards.
