FINES AND PENALTIES FOR UNDECLARED EMPLOYMENT
Failure to notify the INPS of a hiring
Employers have an obligation to notify the INPS of all hirings, and also of any conversion or cessation of the employment relationship. If an employer fails to make the compulsory notification to the INPS on time, an administrative fine is payable to the Labour Division of the Provincial Government ranging from €200 to €500 for every worker whose hiring is not notified. This fine may be imposed in addition to the penalty for failure to register with the INPS and/or the penalty for failure to pay contributions.
As a matter of fact, if employers don't send the compulsory notification, the domestic worker will not be registered with the INPS, which handles his/her insurance account.
If a domestic worker is not registered with the INPS, the Labour Division of the Provincial Government may fine the employer an amount between €1,500 and €12,000 for each worker undeclared, plus €150 for each day’s actual work; this may be imposed in addition to the other fines and penalties applying to undeclared employment.
PenaltiesFailure to pay contributions
In the case of undeclared employment (if a worker is hired without notification to the Employment Centre and without registration with the INPS) the law provides for civil penalties on the employer in respect of contributions for each worker, calculated on the amount of the missing contributions at the rate of 30% p.a. subject to a maximum of 60% and a minimum of €3,000, regardless of the actual duration of services provided.
This means that even if only one day’s work is undeclared, the employer may be liable to the minimum penalty of €3,000.
This penalty may be imposed in addition to any fines for failure to notify the Employment Centre and/or for failure to register with the INPS by the prescribed deadlines.
Late payment of contributions
Late payment of contributions renders an employer liable to the INPS for a penalty, calculated on the amount due in the quarter, or on the amount still outstanding, at the rate in force on the date of payment or the date of calculation (currently 6.50% p.a.), subject to a maximum of 40%. This rate of interest applies provided the employer pays voluntarily within 12 months of the contribution’s due date and before receiving an official reminder or Demand from INPS, INAIL or the Labour Inspectorate. If that deadline is not met, the case becomes one of tax evasion, which attracts a penalty of 30% p.a. of the amount not paid in the quarter.