Italy Update: Wages paid in untraced mode – consequences

Law no. 205 of 27 December 2017 – INL Notes no. 4538/2018, no. 6201/2018, no. 9294/2018 and no. 473/2021

From 1 July 2018 – in accordance with the provisions of Article 1, paragraphs 910 – 914, of Law no. 205/2017 – employers, or clients, must pay workers wages, or the related advance, exclusively through banks, post offices, or other electronic payment systems. Consequently, employers or clients are not allowed to pay remuneration in cash directly to the worker, regardless of the type of employment relationship established. The rule applies to employment relationships, Co.Co.Co, as well as employment contracts established in any form by cooperatives with their members pursuant to Law no. 142/2001. On the contrary, the provision does not apply to employment relationships with public administrations and to those falling within the scope of domestic work. The employer or client who violates the law, is imposed a pecuniary administrative penalty from 1,000 to 5,000 euros.

On this subject, the INL has specified – with note no. 4538/2018 – that payments made in favor of scholarship holders, trainees and occasional workers are excluded from traceability. Furthermore, the same note specifies that, irrespective of the number of workers concerned, the penalty must be multiplied for each month in which the offence has continued.

In note no. 6201/2018, the Inspectorate stated that tracking is not mandatory for payments of sums of money other than pay, such as for the reimbursement of sums advanced by the worker in the interest of the company (e.g.: reimbursement of travel expenses, food, accommodation). In addition, the INL recalls that in the event that a penalty is imposed for undeclared work, this is combined with that for the traced non-payment of wages. The latter, in the event that the undeclared worker receives the salary with periodicity different from the monthly one, is applied as many times as there are days on which the salary is paid (NOTE INL no. 9294/2018).

The recent and latest clarifications can be found in NOTE INL no. 473/2021, where it is pointed out that the sanction applies even if the worker declares to have received the salary, but it is not possible to prove its traceability.

By Quorum, Italy, a Transatlantic Law International Affiliated Firm. 

For further information or for any assistance please contact italy@transatlanticlaw.com

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