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INL note on the penalty regime for unlawful supply, contracting and posting of workers

The Central Directorate for Legal Coordination of the National Italian Labour Inspectorate (INL) issued Note no. 1091 of 18 June 2024, in which it provided its inspectors with some operational indications concerning the penalty regime applicable in the case of unauthorised administration, contracting out and unlawful posting.

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The subject of this note concerns art. 29, par. 4, of Italian Decree-Law no. 19/2024 (converted by Law no. 56/2024), which introduced important amendments to art. 18 of Legislative Decree no. 276/2003, regulating the sanctions regime in the matter of unlawful supply, contracting and posting. In this regard, INL intended to provide the first indications on the correct application of the new provisions.

Penalty regime in the matter of unlawful supply, contracting and posting

Article 29 par. 4 of Italian Decree-Law No. 19/2024 has restored the criminal relevance of the cases sanctioned by Article 18 of Legislative Decree No. 276/2003, aimed at sanctioning the conduct of contracting out or seconding personnel which do not meet the requirements provided for by law and which therefore constitute, in most cases, mere supplies of labour, by introducing the penalty – alternative or joint – of imprisonment or a fine.

However, in relation to the correct determination of the amount of the fines to be applied when contesting the violations, it is necessary to take into consideration the provisions of Article 1, par. 445 lett. d) no. 1, Law no. 145/2018 according to which “the amounts of the following sanctions in the field of labour and social legislation are increased to the extent indicated below:

  1. by 30% with regard to the amounts due for the violation referred to in Article 3 of Decree-Law No. 12 of 22 February 2002, converted, with amendments, by Law No. 73 of 23 April 2002 (provisions on irregular work); and
  2. by 20% in respect of the amounts due for breach of the provisions of Article 18 of Legislative Decree No. 276 of 10 September 2003 (unauthorised exercise of the activities of staffing agencies), Article 12 of Legislative Decree No. 136 of 17 July 2016 (failure to communicate transnational posting), and Article 18-bis, paragraphs 3 and 4, of Legislative Decree No. 66 of 8 April 2003 (breach of the provisions on average working time and weekly and daily rest)”.

Art. 1, par. 445, Law No. 145/2018

This provision was partially amended by Decree-Law No. 19/2024 by increasing the amount of the maxi-sanction for undeclared work from 20% to 30%.

The final quantification of the penalty will also have to take into account the provisions of the new paragraph 5-quinquies of Article 18 mentioned above, as rewritten at the time of conversion by Law no. 56/2024.

According to this provision, the amount of the proportional pecuniary penalties provided for by this Article, even without the determination of minimum or maximum limits, cannot, in any case, be lower than €5,000 or higher than €50,000. These minimum and maximum limits should be applied to the offences of unauthorised supply (Article 18, paragraph 1, first sentence and paragraph 2) and fraudulent supply (Article 18, paragraph 5-ter), as well as to unlawful contracting and posting (Article 18, paragraph 5-bis), for which proportional monetary penalties are provided for each worker employed and for each working day.

Penalty regime in case of recidivism

The introduction of the new paragraph 5-quater within Article 18 of Law Decree 276/2003, as amended by Law Decree 19/2024, requires the adoption of new interpretative guidelines, according to which “the amounts of the sanctions provided for shall be increased by twenty per cent where, in the previous three years, the employer has been the recipient of criminal sanctions for the same offences“.

By way of example, it is therefore considered that in the presence of a sanction definitively imposed in the previous three years also for violations other than those referred to in Article 18 but included in the aforementioned letter d) – e.g. an injunction order not contested in the matter of “illegal” work or working time – the amounts of the fines for illegal contracting, secondment and supply must be increased by 40%.

The increase will also apply in the case of “specific” recidivism, i.e. it relates to a conduct already sanctioned under Article 18.

This mechanism applies to all the sanctioning hypotheses provided for in Article 18, including the new aggravating circumstance where the supply of labour is carried out for the specific purpose of evading mandatory rules of law or collective agreement applied to the worker.

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Regulatory Framework

Decree-Law no. 19/2024

Reference (Italian only)

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