New Protections for Self-employed Individuals

The Italian Parliament has recently enhanced protections for independent contractors and self-employed workers to reflect the fact that many are working in this capacity in the modern “gig economy.” Law no. 81/2017 focuses mainly on the terms on which independent contractor arrangements may be created.

The new legislation sets out three types of protections for independent contractors.

1. Contractual Protection

The parliament has introduced a number of contractual protections. According to these protections, clauses to a contract that purport to allow an employer to unilaterally change the terms relating to payment, withdraw from the contract without appropriate notice, or set payment terms of over 60 days are all forbidden.

2. Economic Protection

The changes strengthen the rights self-employed individuals have in relation to ownership and economic use of intellectual property, arising over their contributions and inventions made in the execution of their contracts, as referred to in the Intellectual Property Code.

3. Social Protection

A key feature of independent contractor status is that these workers do not have sickness or maternity benefits. While that situation is not changing, the new protections prohibit employers from terminating a self-employment contract merely because of absences related to sickness or maternity unless the leave exceeds 150 days in one year.

In addition, the new protections also give self-employed individuals the entitlement to the maternity indemnity (maternity pay) provided by law even if they do not suspend their work activities during the legal period of maternity leave.

Unemployment benefits, which the state pay and which Italy introduced for self-employed workers for the first time in 2015, have been extended to scholars and doctoral candidates.

The government is also committed to extending state paid maternity and sickness benefits to the self-employed, as well as introducing social relief when they suffer a serious downturn in their incomes.

Comment

These reforms present challenges for employers. For example, the protections do not clarify the length of notice that would be “appropriate” to terminate a self-employment agreement. Another complication is how to deal with contracts that are already in existence with terms that do not accord with the new rules.

Written by Renato Scorcelli of Scorcelli, Rosa & Partners and Roger James of Ogletree Deakins