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Overview of the current situation in case of lack of payment to the worker of due deducted contributions

by Vincenzo Paci | Nov 16, 2022 | Blog

If an employer fails to pay any deductions from the employees’ salaries to the INPS (National Institute for Social Security), the fault may represent a criminal offence if the remunerations have actually been paid. On this point, according to the case-law, the salaries are considered as duly paid on the basis if the telematic UniEmens models’ transmission has been correctly performed. Therefore, the employer is burdened with the responsability of proving ” the lack of the payment of the wages, contrary to what is stated in the submitted UniEmens models”.



Regulatory framework

Article 3, paragraph 6, Legislative Decree No. 8/2016, entitled “Provisions on decriminalization”, regulates the penalty treatment applicable to an employer who fails to pay withholding taxes for amounts exceeding € 10,000. It provides for up to 3 years of imprisonment and for a fine up to 1,032 euro. It also decriminalizes the lack of payment of amounts up to € 10,000 per year, converting this conduct from criminal offence to administrative offence and introducing the only imposition of the pecuniary administrative fine. The amount of the fine can vary from a minimum of 10,000 euros to a maximum of 50,000 euros, that remove the penalty of the employer’s detention.

Determination of the EUR 10,000 threshold

Regarding the method for determining the threshold of EUR 10,000 per year, which represents the criteria for the identification of the offence, administrative instead of the criminal, through the Circular No. 121/2016, the INPS. considers the calendar year (January 1- December 31).However, it specifies that the payments to be considered are those relating to the month of December of the year prior to the one under review (payable by January 16), up to those relating to the month of November of the same year (payable by December16).

Stages of the dispute procedure

With Circular No. 121/2016, the INPS details the stages of the actions that can be taken in case of lack of payment, which, for amounts up to EUR 10,000, startwith the notification of infringement. From the date of notification, the employer may submit a statement of defense or request hearing within 30 days. From the same date, he/she will have three months to pay the due amounts. If payment is not made within 3 months, the administrative penalty will apply and its amount will vary between 10,000 and 50,000 euros.

If the payment is made within 60 days, the fine can be reduced according to Article 16, Law No. 689/1981, which is the most convenient between double the minimum and one third of the maximum, that means choosing between 20,000 euros (double the minimum, which is 10,000 euros) and 16,666.67, (one third of the maximum, which is EUR 50,000). Therefore, the lowest sum, amounting to 16,666.67 euros, will be applied.

In the current year, the INPS provided Circular No. 32/2022. in this Circular, in addition to summarizing the regulatory framework and direction of the entity, the INPS clarified that, in case of lack of payment of the penalty with lowest sum within 60 days after 3 months of the notification of infringement, the entity would proceed to the injunction of payment of the full penalty. The fine must be paid within 30 days (60 days in case of residence abroad), for an amount between 17,000 euros (instead of € 16,666.67) and 50,000 euros. To determine the due amount, the amount of the unpaid withholding tax and the repetition of the infringement (if applicable) would be taken into consideration.

Later, on 27 September 2022, the INPS published message No. 3516/2022, concerning violations committed before the date of entry into force of Legislative Decree no. 8/2016 (6 February 2016), and affected by criminal proceedings not yet defined. In Article 9, paragraph 5, Legislative Decree No. 8/2016, it has introduced the possibility of halving the amount of the fines, given that the decriminalization has been introduced  in a criminal procedure already pending.

For acts not yet notified, the INPS will report the data subjects of the violation, before the issue of the injunction, indicating the possibility to remedy within 60 days of notification. As an alternative to the application of the third of the maximum penalty (16,666.67 euros), the employer may pay an amount equal to half of the applicable penalty, this time recalculated by applying formulas and coefficients given by the INPS. If the calculated amount is lower than the applicable minimum of 10,000 euros, it will have to be adjusted to this figure. Instead, if it exceeds 10,000 euros, the higher sum will be applied.

About the infringements starting from 6 February 2016 onwards, the sanctions will be recalculated according to the provisions of the above table, attached to the INPS’ message no. 3516/2022. However, the aforementioned halving of the amount will not be applied. In addition, the relevant payment will have to be made within 30 days of the communication’s receipt.

The news by INPS and by the Ministero have led to a reduction in the due amounts. However, in case of a violation of, say, € 600.00, the penalty will be more than 8 times the amount of the non-payment.

Therefore, all we have to do is wait for the legislative regulations or further indications from the Constitutional Court.



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