Italian employees hired by foreign companies with a local contract must carefully evaluate the social security obligations which vary according to the country where the employee is hired. In such circumstances, a distinction must be made between: EU countries, countries adopting EU legislation via specific agreements with the European Union countries with which Italy has entered into full Totalization Agreements: the employee is required to pay contributions in the host country as per the local…
Foreign companies posting their employees to Italy must be compliant with the provisions of the Posted Workers Directive and the Italian law.
In order to ascertain that the assignment in Italy matches the law provisions, the Italian Labour Authority must assess:
- whether the seconding company carries out activities not encompassed within simple personnel management or administration, so they cannot be considered fictitious companies (letter box companies);
- whether the employee is actually posted, analysing the employment contract, the assignment letter, the A1 form, the salary, the payment of travel, board and lodging expenses and above all the existence of the so-called organic bond between employer and employee.
Foreign companies assigning employees in Italy have the obligation to file a communication to the Italian Minister of Labour via a web portal, within 24:00 hours of the day prior to the beginning of the assignment. The communication must report the following information:
- data of the sending company
- data of the receiving company
- number and general data of assigned employees
- starting date, ending date and total duration of the assignment
- the place where the working activity is rendered
- type of services and data of sending company legal representative
In addition, the sending company must have all the documentation related to the assignment of the employees to Italy duly translated into Italian language (labour contract, assignment letter, payslips, etc.). Such storage obligation is valid throughout the assignment duration and up to 2 years after its termination. Penalties for non-compliance range from Euro 600,00 to Euro 3.600,00 per employee.
Furthermore, the sending company has to appoint:
- a”company representative” domiciled in Italy, who will be responsible for showing, sending and receiving documents on behalf of the foreign company to the Italian authorities;
- a “designated person”, acting as a representative through whom the relevant social partners may seek to engage the service provider to enter into collective bargaining.
The “company representative” and the “designated person” are appointed for the entire assignment period and up to 2 years after its termination. Penalties for non-compliance range from Euro 2.400,00 to Euro 7.200,00 per employee.
In relation to the “core set of rules” that must be respected by the sending company, the labour conditions provided by Italian law and collective bargaining agreement adopted by the Italian host company apply to employees sent on assignment to Italy (for a period of maximum 12 months, extendable of additional 6 months), provided that they are more favourable to them in comparison with the foreign labour law provisions.
In case the assignment exceeds 18 months (12+6) all conditions provided by the Italian labour laws and the collective bargaining agreement adopted by the Italian host company apply to the employees, with the exception of procedures, formalities and conditions for the conclusion and termination of the contract, the non-competition clauses and the integrative pension schemes.
Finally, in case of short-term posting, there is a mandatory exception in cases of initial assembly and/or first installation of goods in case the posting does not exceed eight days. In these cases, the rules of the Posted Workers Directive on minimum paid annual leave and remuneration do not apply (the exception does not concern the construction sector).