Unlawful staff supply work , contracting and secondment: penalties

On 30 April 2024, Italian Law no. 56/2024, which implemented Italian Decree-Law no. 19/2024, was published in the Italian Official Gazette. Among other things, the new law introduced important changes to the sanctions regime for unlawful staff supply work, contracting and secondment. 

Specifically, Article 29, paragraph 4 of the above-mentioned law has amended Article 18 of Italian Legislative Decree no. 276/2003, effectively reinstating the criminal offences of unlawful staff supply work, contracting and secondment which had previously been decriminalised (Article 1, Italian Legislative Decree no. 8/2016). The new law has introduced the alternative or joint penalty of arrest or fine and increased the fines connected to these offences. 

Increased penalties 

In note no. 1091 of 18 June 2024, the Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) provided explicit operational guidelines on the sanctions regime, as set out in Italian Decree-Law no. 19/2024. In particular it highlighted that from the date of entry into force of Italian Decree-Law no. 19/2024 – that is, from 2 March 2024 – unlawful staff supply work, contracting and secondment are punished alternately with the penalty of arrest (one month) or “a fine of EUR 60 euros per day for each worker employed and for each day of work”. This is increased by 20% – as already previously introduced by Article 1, paragraph 445, letter d) of Italian Law no. 145/2018 – or 30% (in the case of the sanction for ‘off the books’ work), effectively reaching EUR 72 for each worker and for each day of unlawful work (and EUR 90 in the case of ‘off the books’ work). 

A new rule that inspection staff must comply with is contained in Article 18, paragraph 5-quinquies according to which “the amount of the proportional fines, regardless of the determination of minimum or maximum limits, cannot, in any case, be less than EUR 5,000 or more than EUR 50,000”. 

These minimum and maximum limits apply to the offences referred to in Article 18, paragraphs 1 and 2, paragraph 5-ter, and paragraph 5-bis), i.e. unauthorised and fraudulent staff supply work and unlawful contracting and secondment, for which proportional fines are provided for each worker employed and for each day of work.  

Therefore, in the light of the above, and in line with what has already been set out in Circular no. 6/2016 of the Italian Ministry of Labour and Social Policies, for offences punished with a fixed proportional fine, even if the amount to be imposed in practice is less than EUR 5,000, this threshold will in any case apply. Once this requisite is met, it will then be reduced to a quarter, under Article 21, paragraph 2, of Italian Legislative Decree no. 758/1994 (therefore becoming EUR 1,250.00). 

New paragraph 5-quater of the new Article 18 of Italian Legislative Decree no. 276/2003, together with the current provisions of Article 1, paragraph 445 letter e) of Italian Law no. 145/2018, increases the penalties for recidivism while creating confusion about the applicability of one or the other provision. 

On this point, therefore, the INL intervened with its own interpretative guidance specifying that the increase referred to in paragraph 1, letter e) of Italian Law no. 145/2018 applies where, in the previous three years, the employer has been subject to any administrative or criminal sanction under the same law (so-called “simple” recidivism) while the increase referred to in paragraph 5-quater of the new Article 18 applies only in the case of repeat offences previously sanctioned under the new Article 18 (so-called “specific” recidivism). 

In the first case the fine will be EUR 60 plus 40% for recidivism (EUR 84 for each worker and for each day of unlawful work); while in the second case the fine will be EUR 72 plus 40% (EUR 100.80 for each worker and for each day of unlawful work). 

Finally, it should be noted that Italian Legislative Decree no. 19/2024 is silent on the alternative nature of the penalty of arrest or fine in the presence of the aggravating factor of child exploitation, for which the penalty of arrest of up to 18 months together with the fine increased by up to six times remain. 

On this aspect, the INL, in light of the new wording of most of the sanctions of Article 18 of Italian Legislative Decree no. 276/2003, clarifies that also in the presence of the aggravating factor of child exploitation, “the prescription under Article 20, Legislative Decree no. 758/1994 and, where the prerequisites are met, a fine equal to a quarter of six times the basic penalty (increased by 20%) or that determined following recidivism [will also apply]”. In addition, the minimum and maximum limits introduced by Article 5-quinquies of the new Article 18 of Italian Legislative Decree no. 276/2003 will apply.