This GMS Flash Alert reports that further details have been stipulated by Italian authorities regarding the posting of workers to Italy under EU and domestic rules.
On December 23, 2016, the Italian Ministry of Labor opened the new website1 for the implementation of the reporting requirements when posting workers to Italy, in respect of Decreto Legislativo n. 136/2016 (see GMS Flash Alert 2016-135, November 22, 2016). In light of the new Web site and a Circular of the Ministry of Labor issued on December 22 2016,2 we provide further details in this GMS Flash Alert.
Please note there is now a requirement to register all secondments, that started after July 22, 2016, and which were still ongoing at December 2016.
As noted in the previous Flash Alert, the new statute brings new responsibilities for companies (home and host) posting workers to Italy, particularly in terms of new record-keeping and notification requirements. The Ministry has now clarified that notification is in fact retroactive and that all assignments starting on or after July 22, 2016, and still in force at December 26, 2016, must be notified within an extended deadline of January 26, 2017.
The online portal for notifications went live on December 26, so employers are now obliged to comply and consider those existing assignments that need to be notified retroactively albeit within a tight timeframe.
Italy’s Decreto Legislativo n. 1363 transposes EU Directive 2014/67 into Italian law and introduces a series of requirements for foreign employers who intend to send employees to Italy to provide services; this includes the obligation to provide notification of new assignments. The Decreto goes beyond the EU regulations in extending the requirements also to non-EU employers.
From December 26, the seconding foreign employer has the obligation to communicate the secondment of personnel intended to work in Italy no later than 24 hours prior to the assignment having started.
The Ministerial Circular makes clear that foreign enterprises are also required to communicate all secondments starting after July 22, 2016, where the seconded employee is still in Italy on December 26, 2016. These retroactive notifications have to be made via the portal by January 26, 2017.
In Decreto Legislativo n. 136, a new framework for secondments has been stipulated, which is more ample than the existing Italian domestic framework. There is no time limit on secondments for purposes of the registration and record-keeping requirements. While it is fairly clear that registration of occasional business trips is not required, short-term assignments of a few weeks do fall within the definition – for these purposes, a secondment could have a duration from a couple of weeks to several years. The registration requirement could then also apply to assignments that might be tax exempt under a treaty article. Furthermore, the legislation makes it clear that the Ministry of Labor may share the information with INPS (the Social Security Authority), making the prospect of cross-checking on A1 Certificates more probable.
The aim of the Directive and the Decreto Legislativo is to establish that foreign workers seconded to Italy are subject to the same minimum requirements as Italian workers. The new Web site contains a wealth of new information to enable employers to check the Italian obligations detailing several things, as noted below.4
The site summarizes the position of National Collective Agreements in Italy and provides links to examples of Minimum Contractual Wages in certain sectors as well as links to archived Collective National Contracts.
Italy does not have a minimum national wage, so reference needs to be made to Collective National Contracts. The record-keeping requirements of the legislation are to enable the Italian authorities to examine foreign pay-slips etc. to help ensure that the legislation is being applied. There is a requirement to provide translations of pay-slips and the records must be accessible in Italy.
There are likely to be issues for countries where pay-slips do not show holidays taken or hours worked, and whether that information is collected locally. The position can be made more secure by robust secondment letters making specific references to the Italian Collective Contracts, etc.
It is worth noting that a translation of secondment letters is required. The KPMG International member firm in Italy currently understands that the letters have to be translated by a registered translator and sworn to at an Italian consulate if outside Italy or before an Italian court. Sworn translations necessarily involve extra costs for court fees and Stamp Duty, as well as the translation costs. The above requirements apply equally to EU and non-EU assignments; however for non-EU assignments, the position will actually be easier, since many of the required conditions will have had to be proved to acquire a work visa.
The site sets out the instructions for registering secondments and contains a link to the portal for registering new assignments. An employer must first register as a user of the site.5 Once registered, a user is then able to operate several different home country employers through the portal, which is of benefit where there several different sending employers. The user has to set up specific foreign employers, and then attach individual secondments and the details of seconded workers to those specific employers. It is possible to set up one foreign employer with different host country entities and within those entities different locations of work. In theory the system allows users to duplicate data to avoid having to input information twice or to provide an identification number for a particular function (legal representative) who can then be used to represent multiple foreign employers. The data required is included as an appendix (PDF 59 KB) to this Flash Alert.
Before registering new assignments, a company will need to gather information on all the potential home country employers – if there are, say, two or three different home country employers in the same group sending to Italy, these need to be registered separately. Where there are different Italian host employers in a group, these all need to be registered. Care should be taken regarding the various permutations of home/host employers. We suggest that a mapping exercise be carried out to identify potential home/host companies, so that these can be registered in advance. Groups especially may need to undertake an internal information gathering exercise.
From our experience, the site is suffering from a number of teething troubles. It is expected that the situation will improve, but now it appears difficult and cumbersome to use. When the site is registering as “down,” it is possible to send a .pdf copy of the UNI_DISTACCO via registered e-mail (Posta Electronica Certificata, “PEC”) but presumably, data also has to be uploaded as well. Because of the lack of robustness of the site, it is advisable that employers do not leave the retroactive registration of assignments to the last minute.
1 See: www.distaccoue.lavoro.gov.it .
2 Circular of the National Institute of Labor Inspectors (INL) n3 of December 22 2016.
3 To access the text (online version) of Decreto Legislativo 17 luglio 2016, n. 136.
5 Access the ClicLavoro site.
The Appendix highlights Employer(s), Legal Representative, and other Important Information Required for Notification of Assignments.
Please note that the KPMG International member firm in the United States does not provide immigration or labor services.
The information contained in this newsletter was submitted by the KPMG International member firm in Italy.
© 2020 KPMG S.p.A., KPMG Advisory S.p.A., KPMG Fides Servizi di Amministrazione S.p.A. and KPMG Audit S.p.A., Italian limited liability share capital companies, KPMG Business Services S.r.l., Italian limited liability company, and Studio Associato - Consulenza legale e tributaria, Italian professional partnership, are member firms of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved.
For more detail about the structure of the KPMG global organization please visit https://home.kpmg/governance.
Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.