DID YOU KNOW THAT… there are criminal penalties for unlawful contracting, secondment and staff supply work? 

Italian Decree-Law no. 19/2024 (converted by Italian Law no. 56/2024) increased penalties for unlawfully carrying out staff supply work, contracting and secondment by expanding the cases for which there are criminal penalties.

In summary, contracting, secondment, and staff supply work are considered unlawful when workers are used without meeting legal requirements, for evasive purposes, and without the contractor, seconding party, or staff supplier exercising managerial and organisational powers.

On this point, the Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) first intervened in note no. 1091/2024 to clarify the exact amount of the applicable fines and the complex recidivism mechanism. Subsequently, in note no. 1133/2024, the INL examined the transitional regime for the application of the new penalties.

On the latter point, the INL has clarified that the new criminal penalties apply in relation to conduct that took place on or after 2 March 2024, the effective date of Italian Decree-Law no. 19/2024. For conduct that started and finished before 2 March 2024, on the other hand, the previous penalty regime of an administrative nature, regulated by Circular no. 6/2016 by the Ministry of Labour, applies.

However, the real issue, which has now been clarified, relates to conduct straddling the enactment of Italian Decree-Law no. 19/2024. The INL has confirmed that conduct started before 2 March 2024 and continued after that date is exclusively criminal in nature and therefore is subject to the penalties established by the new penalty regime.

In addition, the INL has also clarified that in determining the applicable penalty, which is linked to the number of days of unlawful employment of personnel, due to the possible alternatives of imprisonment and fines, periods prior to 2 March 2024 should also be considered. This is because the days of employment are relevant in assessing the seriousness of the offence, which, in turn, determines a proportional and “mandatory” sanction which is predetermined by reason of the workers involved and the number of days and constitutes a mere instrument to quantify fines with reference to conduct that must necessarily be considered as a single offence.

Other related insights:

• DID YOU KNOW THAT… Italian Decree-Law PNRR-bis, in force from 2 March 2024, introduced important changes to the law relating to contracting-out?
• Critical moment for the Italian Court of Cassation Court case-law on contracting-out (Il Sole 24 Ore, 16 February 2024 — Vittorio De Luca)
• DID YOU KNOW THAT… The Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’) has provided the first operational guidelines on the sanctions regime for unlawful staff supply work, contracting and secondment?