French Labour Law

URSSAF Audit in France: What Risks Do Employers Face?

DAIRIA Law · Published · 5 min

URSSAF Audit in France: What Risks Do Employers Face?

Companies operating in France are subject to audits by the URSSAF (the body that collects social security contributions), and the consequences can be significant, both financially and in terms of reputation. Understanding the risks associated with these audits is essential in order to anticipate and better manage them.

Understanding How a URSSAF Audit Unfolds

A URSSAF audit generally begins with the sending of a notice of audit (avis de contrôle), a mandatory notification specifying the date and nature of the upcoming checks. This notice must be sent at least seven days before the start of the audit for small and medium-sized enterprises, and fifteen days for large companies. The URSSAF has the right to verify the compliance of your declarations and payments in numerous areas, including social security contributions, vocational training contributions and supplementary pension schemes.

Main risks:

  • Financial reassessment: If irregularities are found, this may result in a reassessment (redressement) of the contributions due.
  • Penalties and surcharges: In the event of non-payment or under-declaration, surcharges may be applied, aggravating your company’s financial situation.
  • Reputational impact: Compliance issues may also tarnish your company’s image in the eyes of your clients and partners.

Assessment of Contribution Bases and Extrapolation Methods

During an audit, the URSSAF has several methods at its disposal to determine the basis of assessment for contributions.

  1. Actual Verification: This involves examining accounting documents, payslips and other supporting evidence. It is the most precise and direct method, but also the most time-consuming.

  2. Sampling and Extrapolation: Where large volumes of data are involved, the URSSAF may choose to proceed by sampling. This means that a subset of the data will be examined, and the results extrapolated to all of the declarations. Although this method is faster, it carries a risk, since the conclusions apply to all of the employees or periods audited.

  3. Flat-Rate Assessment (taxation forfaitaire): If the URSSAF is unable to establish a precise figure, it may impose a flat-rate assessment based on an estimate. This method is often contested by companies, as it can considerably increase the amounts owed.

  • Article L.243-7 of the French Social Security Code, which establishes the framework for the verification of contributions.

The Stages of the Adversarial Period

Once the URSSAF has carried out its audit, it sends a letter of observations (lettre d’observations) summarising its findings. You then have a period, generally of thirty days, to respond to and challenge these observations. This phase is crucial to your company’s defence.

  • Adversarial Period (période contradictoire): It is imperative to respond in a detailed and structured manner to each point raised by the URSSAF, providing arguments and documents re-establishing your compliance. Ignoring this stage may lead to tacit acceptance of the URSSAF’s findings.

  • Formal Notice and Enforcement Order: If no amicable solution is found, the URSSAF may issue a formal notice (mise en demeure) demanding payment of the reassessed contributions, potentially followed by an enforcement order (contrainte) if the amount is not settled within the allotted time.

URSSAF Litigation: From Filing to Court

In the event of a persistent disagreement, you may challenge the reassessment before the civil court (tribunal judiciaire), generally at the social division (pôle social). It is advisable to be represented by a lawyer specialising in social security law to strengthen your position.

  • Surcharges and Penalties: An uncontested reassessment may give rise to financial penalties. It is therefore crucial to review the contested amounts carefully and to prepare a solid defence.
  • Limitation Period: Bear in mind that the URSSAF has a fixed period within which to carry out its audits, generally three years. Beyond this period, a reassessment is no longer possible.

Negotiation and Settlement: An Alternative Path

It is often possible to reach an amicable agreement with the URSSAF through negotiation. This may involve an amicable settlement (transaction), thereby making it possible to reduce the amount of contributions to be paid or to spread out the payments. This option is particularly attractive, as it avoids lengthy and costly litigation.

Frequently Asked Questions

What is a URSSAF audit?

A URSSAF audit is a check carried out by the body to ensure that contributors comply with their obligations regarding social security contributions and declarations.

What are the limitation periods for a URSSAF audit?

The limitation period for URSSAF audits is generally three years from the date on which the contributions became due.

What should I do if I receive a notice of audit?

It is important to take this notice seriously and to prepare your accounting documents. You may also contact a specialised lawyer to assist you throughout the process.

What risks does my company face in the event of a reassessment?

In the event of a reassessment, your company may face increased sums due and penalties, as well as repercussions on its image.

How can I challenge a URSSAF decision?

You may challenge a decision by submitting a reasoned response to the URSSAF within the adversarial period, and then, if necessary, by bringing an appeal before the competent court.

Conclusion

Proactive work and preparation for a URSSAF audit are essential to minimise risks. By regularly reviewing your compliance and establishing transparent relations with the URSSAF, you can not only avoid complications but also protect your company over the long term. DAIRIA Avocats is at your disposal to assist you and secure your obligations towards the URSSAF.

📌 This article is part of the complete guide URSSAF Audit: The Employer’s Guide.

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