In August 2007 the Italian Parliament approved Law 123/2007 which requires the Government there to adopt decrees over the following 9 months amending the existing legislation on health and safety at work.

Several requirements took immediate effect, however. In particular, the Ministry of Labour Inspectors now have the power to suspend the business activity of a company if it “employs” 20% or more “off-the-books” individuals (ie the company is not deducting tax or paying national insurance on them) as a proportion of the total workforce. Business activity can also be suspended if the employer repeatedly breaches the rules relating to maximum hours of work or daily or weekly rest or if it repeatedly and seriously breaches health and safety regulations at work. The employer will be banned from public tenders and any other negotiation/transaction with public bodies for the duration of the suspension, up to a maximum of two years. According to Ministry of Labour guidance, “repeatedly” means breaches of the same type occurring more than once within a five year period and a “serious” breach would be one where there has been a breach of the rules applicable to management (which carry the highest penalties, including criminal conviction).

A suspension can only be withdrawn if the percentage of off-the-books individuals is rectified or the company can show that it is complying with the rules relating to working time and health and safety regulations at work. Suspended businesses would also have to pay a financial penalty.