Labour inspection time limits in STS 119/2026: when can a penalty be set aside?

When the Labour and Social Security Inspectorate (ITSS) opens an inspection, a company’s attention usually focuses on the documents requested, the facts under investigation and the possible infringements. However, alongside dealing with these requests and appearances, it is equally important to keep track of the time limits that apply to labour inspections and their possible legal consequences.

The law subjects inspection activity to specific time limits. As a general rule, the inspection may not last more than nine months, nor may it remain interrupted for more than five. If an infringement report (acta) is subsequently issued, the sanctioning procedure is subject, under current regulations, to a third time limit: six months to notify the decision.

In corporate groups, this issue takes on particular relevance. Documents and communications with the ITSS are often centralised for practical reasons, but organising the response in this way does not mean that the individual companies lose their autonomy for inspection purposes. It is necessary to determine which entity is being investigated, what actions have been taken in relation to it, and which delays can be attributed to it.

Supreme Court Judgment STS 119/2026 of 3 February (appeal no. 132/2025, ECLI:ES:TS:2026:742) addresses precisely this issue. The Supreme Court upheld the annulment of a €187,515 fine because the inspection had exceeded its time limits, and rejected the argument that mere membership of a group allowed the actions taken against its different companies to be counted interchangeably.

Expiry of inspection proceedings in STS 119/2026

The inspection began on 11 March 2020, following a visit carried out as part of a check on taxi and ride-hailing (VTC) drivers. The Labour and Social Security Inspectorate subsequently extended its actions to three related companies, although the infringement report was ultimately issued against only one of them.

On this basis, the Supreme Court concluded that the inspection proceedings had lapsed, rendering the fine null and void. The judgment has a clear practical consequence for companies: the time limits governing inspections are not a secondary matter. The Inspectorate must comply with them and, where it intends to extend its actions, must do so within the circumstances and subject to the requirements laid down by law.

The Administration therefore does not have unlimited power to prolong an inspection when it is particularly complex. If there are circumstances justifying the need for additional time, it must, where the regulations allow, use the relevant extension mechanism and meet the requirements for its valid adoption.

What is not legally acceptable is to attempt to remedy the absence of an extension after the fact through a flexible interpretation of how the time limits are calculated. Compliance with these time limits is not a mere formality, but a requirement linked to the validity of the administrative action and to the safeguards afforded to the company against the exercise of sanctioning powers.

Calculating the time limit in inspections involving several companies

The Administration argued that the actions taken against the three entities should be assessed jointly. The Supreme Court rejected this approach because no group employer had been found to exist for employment law purposes and only one company had been fined. The corporate link alone did not allow delays arising in proceedings concerning the other companies to be transferred to it.

The judgment thus reinforces an important safeguard: the fact that companies form a corporate group does not automatically turn them all into a single inspected party. Each entity, in principle, retains its own sphere of liability and should not bear delays caused by others. In this case, that distinction was decisive in setting aside a fine with a significant financial impact.

That said, this doctrine does not allow any action formally directed at another company to be excluded automatically. Its application requires a case-by-case analysis, taking into account the content of each action, its connection with the conduct under investigation and the way in which liability has been attributed. An action taken against another group entity may therefore be relevant if it is genuinely connected with the facts ultimately alleged, or if the hallmarks of a “pathological” corporate group for employment law purposes are present.

Time limits for the inspection and for the sanctioning procedure

The rules are easier to understand if two stages are distinguished. Until the infringement report is issued, the investigation stage takes place; from that point on, if an infringement is found, the sanctioning procedure begins. The time limits applicable to each stage are different, and so are the consequences of failing to meet them.

What is the maximum duration of an inspection?

Article 21.4 of Law 23/2015 sets an ordinary maximum of nine months. This period may be extended by up to a further nine months where the inspection is particularly complex, where there is obstruction or concealment, or where international administrative cooperation is required. The need to act in relation to several related companies is among the circumstances regarded as particularly complex.

But complexity does not extend the time limit on its own. The extension must be agreed by a reasoned decision before the initial nine months expire; if it is approved afterwards, it has no effect.

Within that period there is a further limit: the inspection may not remain interrupted for more than five months, subject to the statutory exceptions. Both controls operate independently. An investigation may not have used up the nine months and yet still have suffered an excessive standstill.

When does the period start and end?

The dies a quo of the nine-month period is, preferably, the date of the first inspection visit. If the visit has already taken place, a subsequent appearance does not open a new period or restart the one already running.

Only where the inspection begins with a summons to appear is the reference date the day on which the company actually appears and provides all the requested documentation relevant to the inspection. At the other end, the dies ad quem is the date on which the infringement report is issued, not the date on which it is notified.

From the infringement report to the sanctioning decision

The issuing of the infringement report closes the previous stage and opens the sanctioning procedure. For current proceedings, Article 20.3 of Royal Decree 928/1998 generally sets a period of six months from the date of the report to notification of the decision. Delays attributable to the company and suspensions provided for by law are excluded from the calculation, provided they are properly identified and justified.

What happens when the time limits are exceeded?

The answer depends on the stage affected. If the nine-month limit is breached or there is an interruption of more than five months, those actions no longer interrupt the limitation period, and the possibility of issuing an infringement report as a result of them is lost. If it is the six-month time limit of the sanctioning procedure that is exceeded, those proceedings lapse.

This does not necessarily mean that the facts are beyond the reach of the ITSS. As long as the infringement is not time-barred, new investigations may be opened and the previous ones may be used as background, although new inspection activity will be required and, where appropriate, a new infringement report must be issued.

Nor does the company’s duty to cooperate disappear. Obstructive conduct may be penalised and may affect the calculation of the time limits itself. A defence based on time limits therefore requires an orderly approach that is fully compatible with diligently responding to requests.

How to protect the company’s position from the very first action

Waiting until the infringement report arrives to reconstruct the file is usually too late. From the first visit or request, it should be clear which company is being inspected, what facts are being investigated, and which individuals, workplaces or periods are covered by the investigation.

It is also advisable to keep records of all inspection actions, communications and proof of submission, and to log every appearance, delivery of documents, postponement and notification. This timeline will later make it possible to verify the actual duration of the inspection, its interruptions and any delays the Administration may seek to attribute to the company.

In corporate groups, this traceability must be maintained separately for each company. STS 119/2026 provides an important safeguard, but it can only be relied on effectively if it is possible to prove which company responded to each request and which actions were genuinely connected with the alleged infringement.

Legal oversight of the file should not begin when the infringement report arrives. From the first action, it is advisable to identify which company is being inspected, what is being investigated and what actions the Inspectorate is taking. It is also important to record the dates of each request, appearance and delivery of documents. This information may prove decisive months later, when it becomes necessary to check whether the procedure has been conducted within the time limits applicable to labour inspections.

At Devesa Lawyers, we advise companies and corporate groups from the first inspection action through to administrative or judicial defence against infringement reports and penalties, integrating the monitoring of labour inspection time limits into the overall strategy for the case.

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