Observatory

INL: clarifications on extracurricular internships and the intertemporal regime

18 August 2022

The National Labour Inspectorate (“INL“), with note no. 1451 dated 11 July 2022, provided some clarifications on the applicability of the penalties under Art. 1, paragraph 73, of Law 234/2021 ( Budget Law 2022) to extracurricular internships begun before 1 January 2022 and continued afterwards, and contribution recoveries deriving from fraudulent internships.

Applicability of the new regime

INL explained the concept of the permanent nature of an offence. Its Note 3/2019, which referred to a fraudulent provision, highlighted how the offence was characterised by “an intent to circumvent contractual or mandatory rules that found its existence in an appreciable continuity of the unlawful action. The permanent nature of the offence implies its duration throughout the provision, its end coinciding with the cessation of the conduct, which is relevant to identify the applicable rule and the statute of limitation.”

From 1 January 2022, a fraudulent extracurricular internship is an offence of a permanent nature, punished under Art. 1, paragraph 723 of the Budget Law.

To prove fraud, it is necessary to prove that the internship was a true employment relationship.

Penalties

Based on these principles, INL stated that continuing or ending a fraudulent extracurricular internship after 1 January 2022 entails the application of the penalties set out in paragraph 723 of Art. 1 of the Budget Law. This provision states that the “internship is not an employment relationship and cannot be used as an employment replacement. If the internship is fraudulent, circumventing the regulations set out in the previous sentence, the host party shall be fined € 50 for each intern involved and each day of internship, without prejudice, at the intern’s request,” to the verification of the existence of an employment relationship from the time of the court ruling,”

The administrative penalties normally applicable to employment relationship re-qualification (failure to report the establishment of the employment relationship and inability to deliver the employment declaration) do not apply to the fraudulent internship.

This is without prejudice to recognising the existence of an employment relationship at the intern’s request from the time of the court ruling. INL referred to Circular 530, stating that the intern will assess such a request “which will affect the internship relationship (…) since its establishment, even if it occurred before 1 January 2022.”

According to INL, this does not apply to social security profiles and consequent contribution recoveries related to the internship, which simulated an employment relationship. This is because the recovery of contributions cannot be considered conditional upon the worker’s choice to take the matter to court to obtain the recognition of the employment relationship with the host.

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