Subcontractor Not Paying: How to Claim from the Main Company

Edwin is 36, he is from El Salvador and he lives in Murcia with his residence and work authorization. He works as a laborer for a small formwork company, the one that builds the wooden and metal molds into which the concrete is poured. That company is subcontracted by a large construction firm that is putting up an apartment building. For two months, the subcontractor stops paying the whole crew. In Edwin’s case, the debt is around 3,000 euros. One day the owner stops answering the phone and the company disappears from the site. When Edwin asks the construction firm’s site manager, the answer is curt: “We have nothing to do with it, you worked for them.” (The figures and details of the case are illustrative.)

If you work for a subcontractor that doesn’t pay, this article is for you, because there is a way to get paid even if your employer disappears: in many cases you can also claim from the main company, the one that commissioned the work. We explain when, how and within what deadline. If you would like your case reviewed, you can message Fernanda Vargas on WhatsApp or book an appointment on her Calendly.

“We Have Nothing to Do with It”: Edwin’s Subcontractor Disappears

Edwin goes home with the site manager’s words going round in his head. He signed his contract with the formwork company. His payslips, the few he was paid, came from that company. It seems logical to think the construction firm is right and that, if the subcontractor’s owner has vanished, the 3,000 euros have vanished with him.

That is not the case. The law provides for exactly this situation. When a company hands part of its own work to another company, it cannot wash its hands of what happens to the people who do it. Article 42 of the Workers’ Statute (Estatuto de los Trabajadores), which regulates the subcontracting of works and services, makes the main company liable for the wages that the contractor or subcontractor owes its staff, provided a key condition is met, which we will look at below.

Before getting into the rule, it helps to be clear about who is who on a site like Edwin’s.

Contractors and Subcontractors: Who Is Who on a Building Site

On Edwin’s site there are several companies working at the same time, each with its own role:

• The main company (empresa principal) is the one that commissions the work or service from another company. In Edwin’s case, the large construction firm putting up the building.
• The contract (contrata) is the job itself: the agreement by which one company undertakes to carry out a work or a service for another. The company that receives it is the contractor.
• The subcontract (subcontrata) appears when the contractor, in turn, hands part of the work to another company, the subcontractor. Edwin’s formwork company is a subcontractor of the construction firm.

This setup is very common, and not only in construction. It happens in industry, with maintenance or assembly companies working inside a factory; in logistics, with companies handling loading and unloading in someone else’s warehouse; and in many services. You have a contract with one company, but every day you work on another company’s premises and for another company’s business.

Subcontracting is legal. What the law does not allow is for the chain of companies to mean that nobody is responsible when one of them stops paying. That is why Article 42 sets out the obligations of the main company toward the staff of its contractors and subcontractors.

An important note: this is not the same as illegal transfer of workers (cesión ilegal de trabajadores). There is an illegal transfer when the contract is a mere front, the contractor contributes nothing of its own and it is really the main company that directs the work. That situation has other consequences, which we explain in the article on illegal transfer of workers in Spain, your rights and the fines. Here we are talking about real, lawful subcontracting in which the subcontractor simply does not pay.

The Rule in the Law: the Main Company Is Also Liable for Your Wages

Here is what Article 42.2 of the Workers’ Statute says about wages:

“It shall be jointly and severally liable, during the year following the completion of the job, for the obligations of a wage nature incurred by contractors and subcontractors toward the workers in their service.”

In plain words: if the subcontractor owes you wages, the main company is liable for that debt together with it. “Obligations of a wage nature” means your wages, what the company owes you for the work you have done. And that liability of the main company lasts until one year after the job ends.

For Edwin, this changes everything. The wages the formwork company owes him for his work on the site are not just a problem between him and a company that has disappeared. They are also a debt the construction firm is liable for.

The same section also covers debts to Social Security (Seguridad Social): the main company is jointly and severally liable for the Social Security obligations incurred by its contractors and subcontractors while the contract is in force, and that liability extends for the three years following the end of the job. In other words, for contributions the period is three years; for your wages, one. This part matters above all to the General Treasury of Social Security, but also to main companies, which have to make sure their contractors are up to date.

In fact, Article 42.1 requires companies that contract or subcontract works or services within their own activity to check that those contractors are up to date with their Social Security contributions. The law wants the main company to look at who it works with.

The Key Condition: It Must Be the Main Company’s Own Activity

This is the decisive point. The main company is not always liable for the wages of any company it hires for something. Article 42 applies to works or services that belong to the main company’s own activity (propia actividad).

What is “own activity”? The courts understand it as the activity that is inherent or indispensable to the main company’s production cycle, that is, the tasks without which that company could not do what it does. The clearest example is Edwin’s: a construction firm putting up a building needs formwork to build the structure. If it hands the formwork to another company, it is handing over part of its own construction work. That is own activity.

For ancillary activities, those that are not part of the core of the main company’s business, the answer depends on the case. So if you work for a subcontractor on tasks that are not so clearly part of the main company’s work, it is worth having someone review your specific situation before you make a claim.

In addition, Article 42.2 itself excludes two situations:

“There shall be no liability for the acts of the contractor when the contracted activity refers exclusively to the construction or repair that a person may contract in respect of their home, nor when the owner of the work or industry does not contract its performance by reason of a business activity.”

In practice, this means that:

• If a private individual hires a company to renovate or repair their home and that company does not pay you, you cannot claim from the homeowner this way.
• If whoever commissions the work does not do so by reason of a business activity, the main company is not liable either.

In Edwin’s case there is no doubt: the one commissioning the work is a construction firm, it does so by reason of its business activity, and formwork is part of its own activity. The line “we have nothing to do with it” does not hold up.

Joint and Several Liability: Who You Can Claim From and How Much

The key word in Article 42.2 is “jointly and severally” (solidariamente). In law, when two companies are jointly and severally liable, you as a worker can bring your claim against both at the same time, and either of them can be ordered to pay you the full amount you are owed.

You do not have to claim from the subcontractor first, wait for it not to pay and only then go after the main company. Nor do you get half from each. Edwin can claim his 3,000 euros from the formwork company and from the construction firm in the same claim, and if the court rules in his favor, either of them may have to pay him the full amount.

And if the construction firm pays a debt that was really the subcontractor’s? That is no longer Edwin’s problem. Afterwards, the companies settle accounts between themselves: the one that paid can claim from the other whatever is due. You do not have to wait for that settlement to get paid.

This is what makes the rule so useful when the subcontractor disappears or has no money. The main company is usually a larger company that is easier to find, with an ongoing business. For the people working on the site, it is the difference between an uncollectable debt and a debt owed by someone who can pay it.

The Deadline: One Year from the End of the Job

The main company’s liability for wages does not last forever. Under Article 42.2, it covers the year following the completion of the job. If you let that year go by after the contract has ended, you lose the chance to claim from the main company this way.

And there is a second deadline running too: the general one-year period to claim wages. Both deadlines run at the same time, so the practical conclusion is simple: act quickly. Do not wait to see whether the subcontractor reappears, whether the owner starts answering the phone again or whether the job finishes.

For Edwin, this means getting started now, while the building work is still going on, his coworkers can be reached and the evidence is easy to gather.

Your Right to Know Who You Work for and Which Collective Agreement Applies

The Identity of the Main Company, in Writing and Before You Start

To claim from the main company, you first need to know who it is. The law gives you that right expressly. Article 42.3 provides that your employer, the contractor or subcontractor, must inform you in writing of the identity of the main company for which you are providing services at any given time. It must give you that information before you start working for it, and it must include:

• The name or company name of the main company.
• Its registered office.
• Its tax identification number.

If Edwin’s subcontractor met this obligation, he will have a document with the construction firm’s details. If it did not, it is not a serious problem: on a building site the main company is usually easy to identify, for example from the site signs, the site access documents or the site managers themselves. What matters is to write down its details as soon as possible.

Which Collective Agreement Applies to a Subcontractor

To know how much you are owed, you need to know how much you should be paid. And that depends on the collective agreement (convenio colectivo), the agreement between unions and employers that sets the wages and conditions of a sector. Article 42.6 settles it like this:

“The collective agreement applicable to contractor and subcontractor companies shall be that of the sector of the activity carried out under the contract or subcontract, regardless of their corporate purpose or legal form, unless another sectoral agreement applies in accordance with Title III.”

In other words, what counts is the work you actually do under the contract, not what the company’s articles of association say. If you work on a building site doing formwork, the reference agreement is the construction sector’s, even if the company registered with a different activity. The same section adds an exception: if the contractor or subcontractor has its own company agreement, that one applies, on the terms set out in Article 84 of the Statute.

In Edwin’s case, the agreement used to calculate what he is owed is the one for the sector of the activity carried out, construction. If his payslips were below what that agreement sets, the claim can also include those differences.

If the Subcontractor Is Insolvent: FOGASA

The subcontractor may have nothing to pay with, or it may be in insolvency proceedings. That is where the Wage Guarantee Fund (Fondo de Garantía Salarial, FOGASA) comes in, a public body that pays, within limits, outstanding wages and severance when the company is insolvent or in insolvency proceedings.

FOGASA does not replace the claim against the main company: the two routes can be combined. If the main company is liable for the wages under the contract, Edwin can get paid by it. And if the subcontractor is insolvent, FOGASA can also step in. How much it pays, the deadlines and how to apply are explained in detail in our guide to FOGASA in Spain: how much it pays, deadlines and how to claim.

How to Claim from the Main Company Step by Step

Once it is clear that the construction firm is liable, it is time to claim. These are the steps Edwin should follow, and the ones that will help you if you are in a similar situation.

1. Gather the Evidence

You need to be able to prove that you worked for the subcontractor, that you did so on the main company’s work or service, and how much you are owed. Keep everything you have:

• Your employment contract.
• The payslips you were paid and the ones you were not.
• Messages with the owner, the site manager or your coworkers.
• Photos on the site or site access documents.
• Work reports.
• The details of coworkers who can testify as witnesses.

The fact that the subcontractor did not pay the whole crew works in Edwin’s favor: his coworkers are in the same situation and can confirm what happened.

2. File the Conciliation Request Against Both Companies

A wage claim starts with the conciliation request (papeleta de conciliación), the document in which you ask for an attempt to reach an agreement before going to court. It is filed with the labor conciliation service of your autonomous community. The important point here is that the request must be directed against the subcontractor and also against the main company. If you only name the company that has disappeared, you leave out the one that can pay.

3. If There Is No Agreement, the Lawsuit

If no agreement is reached at conciliation, or the subcontractor does not even turn up, the next step is a lawsuit before the labor court, again against both companies. There the court decides whether the main company is jointly and severally liable and, if so, orders it to pay together with the subcontractor.

4. Watch the Deadlines

Remember the two deadlines: the year following the completion of the job for the main company’s liability, and the general one-year period to claim wages. The sooner you start, the better.

Each step has its details: exactly whom to sue when there are several companies in the chain, how to calculate the debt under the right collective agreement or how to coordinate the claim with FOGASA. Fernanda Vargas, employment lawyer in Madrid, can help you with your wage claim and other employment law matters, including if you work outside Madrid.

How Edwin’s Case Is Resolved

The construction firm does have something to do with it. Formwork is part of the own activity of a construction firm putting up a building, so it is jointly and severally liable for the wages the subcontractor owes its staff during the contract.

Edwin can claim his 3,000 euros from the subcontractor and the construction firm at the same time, and either of them can be ordered to pay the full amount. He must do it soon, because the main company’s liability for wages covers the year following the end of the job. He gathers his payslips, his contract, the messages, the photos on the site and the details of his coworkers as witnesses, and files the conciliation request against both companies.

If the subcontractor turns out to be insolvent, FOGASA can also step in. And to calculate exactly what he is owed, the agreement for the sector of the activity carried out applies: construction.

Checklist: If Your Subcontractor Doesn’t Pay You

• Identify the main company: name or company name, registered office and tax identification number. Check whether your employer gave you this in writing before you started.
• Check whether your work is part of the main company’s own activity. On a building site, the parts of the construction commissioned by the construction firm are.
• Rule out the exceptions: that the one commissioning the work is a private individual renovating their home, or someone who does not contract by reason of a business activity.
• Calculate what you are owed using the collective agreement for the sector of the activity you carry out, unless your employer has its own agreement.
• Keep evidence: contract, payslips, messages, photos or access documents, work reports and witnesses.
• File the conciliation request against the subcontractor and against the main company and, if there is no agreement, the lawsuit against both.
• Do not let the year from the end of the job go by, nor the general one-year period to claim wages.
• If the subcontractor is insolvent or in insolvency proceedings, also keep FOGASA in mind.

Frequently Asked Questions

If your subcontractor doesn’t pay you and you want to know whether you can claim from the main company, message Fernanda Vargas on WhatsApp or book an appointment on her Calendly. She will review your case and the deadlines before they run out.