French Parliament Adopts Bill Expanding Project Owners’ Social Liability

A new bill on combating social security and tax fraud was definitively adopted by the French Parliament on 11 May 2026. It contains substantial provisions on undeclared work and subcontracting, with the clear objective of making the ultimate project owner (maître d’ouvrage) a central actor in monitoring the subcontracting chain beneath it.

Until now, Articles L. 8222-1 et seq. of the French Labour Code required the contracting authority or project owner to verify, upon entering into the contract and every six months thereafter until its expiry, that its direct contractor was compliant with its social security obligations, notably through the provision of a vigilance certificate (attestation de vigilance). Failing this, the project owner could be held jointly and severally liable for the payment of taxes, social security contributions, and wages owed by its contractor in cases involving undeclared work.

However, this duty of vigilance was limited to the direct contractual counterparty. The French Supreme Court (Cour de cassation) recently reaffirmed this principle, holding that a project owner was not required to exercise such vigilance with respect to lower-tier subcontractors, even where those subcontractors had been formally approved or benefited from direct payment arrangements (Cour de cassation, 4 September 2025, No. 23-14.121).

The legislation adopted in May seeks to strengthen the compliance framework by extending the project owner’s duty of vigilance—and the potential financial liability arising from it—to the entire subcontracting chain.

In doing so, it brings the regime governing undeclared work closer to a concept already well established in French construction law where the project owner occupies a central position in protecting parties situated further down the contractual chain.

Law No. 75-1334 of 31 December 1975 on subcontracting established several protective mechanisms for subcontractors. Specifically, where a subcontractor has been accepted and its payment terms approved, it may bring a direct action against the project owner to recover outstanding sums if the main contractor defaults. Where such a direct action is unavailable, the subcontractor may, in certain circumstances, seek to hold the project owner liable and claim compensation for the resulting loss.

The parallel with the new French antifraud regime is evident. In both situations, the project owner is called upon to bear part of the risk inherent in the economic structure of the construction project.

The objectives of these two mechanisms nevertheless remain distinct. In construction law, the primary purpose is to protect subcontractors against the risk of nonpayment. Conversely, in the fight against undeclared work, the objective is to ensure the collection of social security contributions and strengthen the effectiveness of antifraud enforcement.

One important question remains unanswered. Will the project owner’s liability for social security contributions owed by a subcontractor depend upon that subcontractor having been formally accepted and approved under the conditions set out in Law No. 75-1334?

At this stage, the adopted text does not appear expressly to make the application of the new regime conditional upon such acceptance and approval. If this interpretation is confirmed when the law is promulgated or through future implementing regulations, the regime could prove particularly onerous for project owners who may find themselves liable to parties with whom they have no direct contractual relationship and of whose involvement they may not even have been aware.

This issue is likely to become a focal point of future academic commentary and litigation as it raises important questions regarding the interaction between subcontracting law and the new social compliance requirements.

Several constitutional challenges have already been filed before the French Constitutional Council (Conseil constitutionnel).

In practical terms, if the legislation remains unchanged, project owners will be encouraged to strengthen oversight of subcontracting chains and adapt their contractual documentation accordingly. Clauses requiring the disclosure of lower-tier subcontractors, the periodic transmission of vigilance certificates, and enhanced contractual warranties are all likely to become increasingly common.