Italy: Transnational Employee Posting To Italy

Last Updated: 7 April 2017
Article by TMF Group

Italian Legislative Decree 136/2016 aims to overcome difficulties in preventing and fighting social dumping practices, and inappropriate use of the institution of transnational posting.

Social dumping

A common expression in Italy, the term social dumping describes an employer practice whereby cheaper labour is used than what is usually available at their site of production and/or selling. This generally sees production moved to a low-wage country or area, and/or foreign workers employed with the aim of saving the employer money and potentially increasing his/her profit.

In effect since mid-2016, the Decree introduced a series of administrative tasks which include the obligation, as of 26 December 2016, to provide prior notice of a transnational employee posting under the responsibility of the foreign service provider, for staff working in Italy.

The notice must be provided by 00:00 of the day prior to the start of the posting itself, in compliance with the methods indicated in the Ministerial Decree of 10 August 2016.

*Postings beginning after 22 July 2016 but which ended before 26 January 2017 were exempt from the communication requirement, as have those which began prior to 22 July 2016.

Applicability

Italy's transnational employee posting regulations affect companies established in other EU member states which, in the context of the provision of services, post one or more employees to Italy in favour of another company, another business unit or recipient, on the condition that, during the posting period, an employment relationship continues to exist between the posted worker and the posting company.

A posted worker is "a worker who normally works in another EU member state who, for a limited period that is pre-determined or can be pre-determined with reference to a future event that is certain, carries out their work in Italy." There are three possible cases:

  • done by a company with registered offices in another EU member state at one of its branches in Italy
  • done by a company with registered offices in another EU member state at an Italian company belonging to the same business group (intragroup posting)

in the context of a commercial contract (tender), stipulated with a client with its registered offices or operating headquarters located in Italy.

The decree also applies to temporary employment agencies established in another EU member state, which post workers to user companies with offices or business units in Italy. Authorisation for temporary work in Italy is not required for agencies which hold an equivalent administrative document as foreseen in the legislation of their home country.

Finally, cases of postings carried out by companies established in non-EU countries also fall under the field of application, provided that these cases are not governed by special laws.

Verification of the posting

To ascertain whether the posting company is carrying out activities other than mere personnel management, the supervisory bodies will verify a series of elements such as the locations in which the company has offices, departments or business units, where its administrative staff is employed, where it is registered with the Chamber of Commerce; regulations applicable to contracts signed by the posting company with clients and workers; the number of contracts executed or the amount of annual turnover.

Elements useful for ascertaining whether the worker is effectively posted include, for example: the content, nature and method by which the work activity and payment is carried out; habitual exercising of the activities in the country where the worker is posted; the temporary nature of the work performed; starting date of the posting; planned return to work in the country from which the worker is posted; the taking on of travel, room and board expenses by the posting company and reimbursement methods; any previous periods in which the same activity was carried out by the same or another posted worker; the existence of a certificate relative to applicable social security legislation (Form A1).

What counts is that for the entire posting period, the posted worker provides work, which must necessarily be of a limited duration and carried out in the interest and on behalf of the posting company, which is responsible for all employer obligations, such as liability relative to hiring, associated payments and social security requirements, disciplinary and dismissal processes.

Form A1 is concerned with the social security legislation applied to the posted worker, stating the obligation of the posting company to pay contributions in the member state in which it is established and not in the hosting country. From a social security point of view, the principle of "personality" applies to posted workers which means the contribution regulations of the country of origin apply. Instead the working conditions of posted workers are those foreseen under the norms and collective contracts for regularly employed workers providing similar services in the location in which the posting occurs (principle of "territoriality"). In case of temporary work, employees have the right to economic and regulatory conditions that are, as a whole, no lower than those of employees of the user at the same level.

False posting

Cases of false transnational employee postings occur when the posting company and/or receiving company establish "fictitious" postings to elude national regulations relative to working conditions and social security.

False postings may include or coincide with cases of illicit interposition, pursuant to Italian Legislative Decree 276/2003.

Protections for workers and fine structure

If the posting is inauthentic, inspection personnel will consider the worker to be an employee of the receiving company in Italy, with all applicable local institutions and protections in terms of work and social legislation.

An administrative fine applies for non-communication of the start of the relationship, as well as a monetary administrative fine of €50 for each worker employed for every day of employment (Euro min. 5,000 – max. 50,000) per posting and receiving company.

If use of child labour occurs, imprisonment for up to 18 months is foreseen with the originally established fine increased by up to six times.

False posting cannot be classified as 'under the table' work and associated fines are excluded.

However, 'under the table' use of posted workers may occur in the case in which the use of said workers continues after communication of early termination of the posting is made.

Joint liability

In case of transnational services carried out through sub-contracts, the employer is jointly liable with the contractor and each sub-contractor for wage claims (including severance indemnities - TFR), contributions and insurance premiums which accrue during the period the tender contract is executed.

Joint liability may be activated by the worker no later than two years from the end of the tender contract.

A substantially analogous joint liability structure is also envisaged in case of temporary work, in the case of the transportation of merchandise pursuant to article 83-bis, paragraphs 4-bis to 4-sexies, Italian Decree Law 112/2008. With particular reference to regulations regarding the transport of goods for third parties, the norms foresee that in the case of a sub-carrier, the client or carrier is required to verify, prior to stipulating the contract, that the business they intend to use to execute the service is in compliance relative to salaries, social security and insurance premiums, acquiring at the time the contract is signed a certification issued by the social security entities in the country of origin, dated no more than three months prior, which indicates that the company has paid all due insurance and social security contributions.

A client or carrier who does not carry out this verification is jointly liable with the carrier, as well as any sub-carriers, within a limit of one year after the termination of the transport contract.

Administrative requirements applying to the service provider

The service provider must send the communication relative to the posting and save the following documentation, in hard or digital copy, in Italy for the entire posting period and until two years after its termination:

  • pay reports
  • reports indicating the start and duration of the daily work day
  • documents demonstrating payment of wages
  • A1 form
  • public registration of the establishment of an employment relationship.

It also must designate a reference person with domicile in Italy, responsible for sending and receiving documents in the name and behalf of the posting company for the entire posting period and up to two years after its termination (if this person is not designated the registered offices of the posting company will be considered as the place where the recipient of the provided services resides and the relevant penalty applies).

It must also designate a person, who may be the reference person, who serves has the legal representative and does not need to be present in the location where the posted work occurs but must be available in case of a reasoned request.

Violation of the requirements is punished as follows:

Communication of the posting - €150 - 500 for each worker
Maintaining a copy in Italian of the prescribed documents for the period indicated - €500 - 3,000 also applicable in case the documents exist but not in Italian
Designating a reference person - €2,000 - 6,000
Designating a representative - €2,000 - 6,000

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions