14 Dec Fair remuneration for self-employment
- FAIR REMUNERATION FOR ALL THE INDEPENDENT PROFESSIONALS ( NOT ONLY FOR LAWYERS)
- FAIR REMUNERATION FOR ALL INDEPENDENT PROFESSIONALS : WHAT IS IT, HOW IT WORKS AND WHO IT REFERS TO
- FAIR REMUNERATION FOR EVERYONE : LAWYERS AND ALL INDEPENDENT PROFESSIONALS
- FAIR REMUNERATION FOR ALL THE INDEPENDENT PROFESSIONALS : WHAT IS NEW AND WHAT CHANGES
On 16th November 2017, the Senate Budget Committee has approved the amendment to the Tax Decree (148/2017), which introduces in Italy fair remuneration to all professionals, even for those who are not enrolled in any official register. In fact, this is a significant modification, because initially the amendment concerned only lawyers who perform services on behalf of banks, insurance companies and other enterprises. The Committee’s decision
is a response to professionals requests ( indeed they have been demanding it for years) to regulate this matter by law. Furthermore, it is envisaged, in the new regulation, that also the public administration is obliged to guarantee the principle of fair remuneration.
Due to this undoubtedly meaningful legal regulation, it is worth analyzing what exactly is the fair remuneration, how to apply it into the practice, what changes it will bring and
to who this adjustment actually relates.
FAIR REMUNERATION: WHAT IT IS
What exactly is fair remuneration (in Italian equo compenso), which was introduced into the Italian legal system? The fair remuneration is one of the changes approved in the Tax Decree, which is part of the Budget Law for 2018 and introduces a minimum fair rate adequate to the quantity and quality of the work performed. The first draft of the Tax Decree assumed that fair remuneration would be reserved only for lawyers who perform services on behalf of banks, insurance companies and other enterprises. The situation has changed on November 16, thanks to the acceptance of the amendment to the mentioned Decree. The scope of the amendment has been expanded and currently includes also all professionals regardless whether the professionals are enrolled or not in official registers. This means that from now, all Italian professionals have the right to be paid with a fee guaranteed by the law that is proportional to the quantity and quality of the work performed, which is basically the right to fair remuneration.
FAIR REMUNERATION: HOW IT WORKS
How the new legal regulation, which is the fair remuneration will function in practice? Responding to this question, the fair remuneration in 2018 would work like that: according to the provisions contained in the Tax Decree, it is established that all professionals are entitled to receive a minimum fee which cannot be reduced. Certainly, this minimum rate, must be “proportionate to the quality and quantity of performed work”. According to the new regulations, both the criteria based on which the economic value of the services provided by independent professionals are established and the fair rate will not be set in absolute terms. That means that there will be always the option of waiving them if there is the agreement between the parties.
The new provision included in the Tax Decree, in addition to introduce the fair remuneration for specialists, also set 9 unfair clauses, on the basis of which an entrepreneur may demand cancellation of a contract within 2 years of being signed without the prejudice to the maintenance of a valid employment relationship. Among the 9 unfair clauses that allow the professionals to question the contract, there are for instance:
1) payment times for invoices over 60 days;
2) advance payment for expenses that are exclusively borne by a professional;
3) possibility of modifying the contract unilaterally – only by the client;
It is worth emphasizing that in the case that there are present unfair clauses in the contract, the invalidity of the contract can only be determined by a professional and it does not extend to the rest of the contract. Prohibition of unfair clauses in the contracts and introduction of fair remuneration to the Italian legal system will definitely regulate the most critical sectors, for instance the loan recovery sector. It is required to mention that after the entry into force of the new provisions, the right to fair remuneration must also be guaranteed by the public administration. If the public administration grant unfair remuneration, it is envisaged the replacement with the compensation determined by the judge.
FAIR REMUNERATION: WHO IT REFERS TO AND FROM WHEN IT WILL BE EFFECTIVE IN THE ITALIAN LEGAL SYSTEM
With the entry into force of the fair remuneration extended to all self-employed workers, eventually, all the independent professionals will be entitled to the minimum fee guaranteed by the law. The question is: to which categories of professionals the new law refers? According to the amendment to the Tax Decree, the right to fair remuneration applies to:
1) independent professionals registered in a official register: f.e. lawyers, journalists, accountants, engineers, etc;
2) independent professionals in a board (surveyors);
3) independent professionals in associations (nurses);
4) independent professionals who are not registered in any official register;
The fair professional compensation, applies to relationships, even existing ones, between independent professionals and private or public companies. To what types of legal relations does the right to fair remuneration refers to? Professionals are entitled to fair remuneration when the client is:
1) a bank
2) an insurance company;
3) a great company;
4) a company in the public administration:
In the case of public administration, it should be remembered that the principle of fair remuneration in public administration cannot have retrospective effect, and thus only applies to new relations established after the entry into force of the new law.
FAIR REMUNERATION CALCULATIONS: HOW TO CALCULATE THE MINIMUM AMOUT OF THE FEE
The new regulations also indicate how to calculate the amount of the minimum fair remuneration. It is presented as we read below:
1) professionals (self-employed) registered in official registers: fair compensation is determined by court paramerts established for ministries supervising professional’s official registers, such as the parameters that currently apply to the lawyers. To the lawyers, for instance, refers the parameters that were established by the Ministerial Decree 55/2014, while to the others professionals, refers the parameters set by the courts.
2) professionals belonging to the other categories: the parameters for the calculation of the fair remuneration, will be decided in the near future, after the approval of the law.
Expecting to determine the parameters that will be enter into Italian legal system, we can assume that the parameters will be similar to the provisions of Article 36 of the Italian Constitution, which refer to the salary of the employee and which constitutes that the fee must be proportionate to the quantity and quality of the work which is performed and additionally to the content and characteristic of specific service.
In conclusion, taking due account the above, it has to be admitted that the new regulation included in Tax Decree, concerning the legal status of independent professionals, is a huge step forward. Unquestionably, a special care will be needed in implementation the new regulations into the legal system, however all the institutions that perform a significant role in achieving this type of result (including Inarsind, Inarcassa Foundation, Network of Technical Professions, etc.) have expressed great satisfaction.