Minimum wage and parameter assessment

There is no law in the Italian legal system establishing a legal minimum wage. In fact, the parameters for  ‘fair’ pay are defined by the Italian Constitutional Charter.

Specifically, Article 36 of the Italian Constitution states that fair pay is pay which ensures the worker a free and dignified existence and is proportionate to the quantity and quality of the work performed.

This pay is usually quantified by collective bargaining in the relevant sector.

In this regard, the Italian Court of Cassation confirmed in ruling no. 27711 of 2 October 2023 that, in the event that the minimum wage is determined by a legal provision, as in the case of the cooperative sector, ‘fair’ pay must in any event be assessed on the basis of the comparatively most representative collective agreement within the sector of activity or other relevant ‘financial’ information.

In particular, in the aforementioned ruling, the Italian Court of Cassation clarified that the judge, even where there is a rule establishing the minimum wage, in assessing compliance with the constitutional parameters on fair pay, must verify the consistency of that wage also in the light of the provisions of the collective bargaining agreement signed by the most representative employers’ and trade union associations. In the event of a negative outcome, the judge must extend the investigation to other concurrent parameters such as, for example, the financial and statistical indicators used to measure the poverty threshold the ISTAT index (Istituto nazionale di statistica– Italian National Institute of Statistics), the income threshold to qualify for an incapacity pension, or the statistical indicators identified by the Directive (EU) 2022/2041 on adequate minimum wages.