Certification of labour compliance, Italy
The Documento Unico di Regolarità Contributiva (DURC) is a document certifying construction companies’ regular payments of social contributions. Based on a single application, DURC is a certificate of the company’s compliance with the obligation to pay social security, welfare and insurance contributions.
The Italian construction sector is characterised by a high number of non-registered workers. Data from the National Institute for Statistics (Istituto Nazionale di Statistica, ISTAT) for 2002 highlight that, in this sector, irregular labour represented 13.9% of the labour force. In southern Italy, the percentage was even higher (27.4%), reaching its peak in the region of Calabria (41.1%).
Therefore, in the context of undeclared work, attention has focused on this sector, which is also involved in carrying out numerous public works contracts. The Documento Unico di Regolarità Contributiva (DURC) is a document certifying construction companies’ regular payments of social contributions. Based on a single application, DURC is a certificate of the company’s compliance with the obligation to pay social security, welfare and insurance contributions.
Law No. 266/2002 concerning the regularisation of undeclared work and Decree Law No. 276/2003 on reform of the labour market provided for an agreement to be reached on the DURC issue between the National Social Security Institute (Istituto Nazionale Previdenza Sociale, INPS), the Italian Workers’ Compensation Authority (Istituto Nazionale per l’assicurazione contro gli infortuni sul lavoro, INAIL) and the Special Construction Workers’ Funds (Casse Edili). The latter is a bipartite organisation set up by the sectoral trade unions and employer organisations.
Initially introduced at provincial level, DURC has been applied nationwide since 2006 through the establishment of a single social security information point. DURC is provided for companies engaged in the following activities:
- public works, services and supplies;
- services and activities in covenant or concession;
- private building works;
- facilities, financing and subsidies.
The main actors involved include: Casse Edili; INPS; INAIL; customers or building site supervisors included under Decree Law No. 494/1996 on building works; contracting public administration authorities; private bodies playing an important role in the public sector; the Society of Certification Bodies (Società Organismi di Attestazione, SOA); and companies applying the national collective agreement (contratto collettivo nazionale di lavoro, CCNL) of the construction sector. The latter represent the primary target group of the initiative.
The requirement of certification has been introduced with the following aims:
- a DURC application may prevent unfair competition resulting from the use of non-registered workers;
- DURC enables contractors to certify their regular status for the assignment of public and private works by submitting a single document;
- DURC increases the visibility of those companies complying with the rules.
Based on the agreement of 15 April 2004 concluded by INPS, INAIL and the most representative trade union and employer organisations of the construction sector, DURC is issued by the competent Cassa Edile based in each provincial district.
With respect to public works, on submission of a document certifying the state of progress of the works (stato di avanzamento dei lavori, SAL) or the final state of work, the local Cassa Edile then issues the DURC for the period for which the certification application is submitted. To this purpose, the company must include in its monthly report the complete list of the operational building sites, the name of each worker and the specific building site where each worker is located.
Regarding private works, DURC is required prior to the beginning of the works for which the building licence was granted or prior to the declaration of commencement of the building activity (denuncia di inizio attività, DIA). The application can be sent by mail or over the internet to the information points specifically set up at the Cassa Edile based in each geographical area.
In order to issue the DURC, Cassa Edile gathers the data required from the other agencies, which are expected to provide the information within 30 days from submission of the request. After this deadline, Cassa Edile will issue the DURC even if the social security institutions have not yet replied.
The procedure to assess the regular payment of social security contributions has to comply with a number of requirements.
- The competent Cassa Edile checks the regular contributory position of the company; the inspection covers all of the company’s operational building sites and the workers employed in the geographical area lying within the competence of the Cassa. If the company is in compliance and not included in the national database of irregular companies, Cassa Edile then issues the certificate of contribution regularity.
- The company complies with the relevant regulations when it has paid the due social security contributions and reserve funds, including those related to the most recent month prior to submission of the certification request. In its representation to Cassa Edile and with respect to each worker, the company has to declare the number of hours worked and not worked (specifying why the worker was absent); this number does not have to be lower than the contractual number of hours.
In the case of a negative assessment, the DURC will certify that the company has a status of contributory irregularity with INPS, INAIL and Casse Edili. In addition to the standard actions for credit collection undertaken by those agencies, the company will then lose any public contracts awarded, will not be allowed to enter into contracting or sub-contracting contracts, and will not be entitled to payment or final payment. With regard to private works, the qualification linked to the building licence will be suspended.
Evaluation and outcome
DURC enables contracting companies to certify, by submitting a certification document, their regular contributory position in order to be awarded public and private works. This tool makes more visible those companies complying with the payment of social security, welfare and insurance contributions, recognising the adoption of regular procedures in managing their workers.
At the same time, DURC limits companies resorting to irregular labour and, in so doing, hinders unfair competition in tenders for contracts.
The certification can also be a useful tool to observe labour dynamics, as it facilitates the monitoring of data and activities of the companies that are awarded contracts.
Giving Casse Edili the responsibility of issuing this document implies involving bipartite bodies in monitoring the regular position of companies in the construction sector, thereby expanding the type of agencies involved in the control of company regularity.
Obstacles and problems
To date, problems have mainly related to a lack of coordination in the time required by the agencies directly involved – INPS, INAIL and Casse Edili – to issue the documentation. Other problems may be generated by the financial institutions charged with making payments on behalf of the construction companies, which do not always comply with the deadline set out. In so doing, the banks in effect penalise the companies and determine their ‘irregularity status’ even for one day of payment delay.
No sufficient data are available to evaluate the opportunity to transfer this tool out of the national context. Law No. 266/2005 extended the scope of application of this tool, providing for the following:
to have access to the benefits and to the Community subsidies for investments, the companies of all sectors have to submit a single document certifying their contributory regular position as set out in Article 2, sub-paragraph 2, of the Decree Law of September 2002, No. 210, converted with amendments by the Law of 22 November 2002, No. 266.
From the perspective of coordinating the agencies responsible for monitoring labour regularity in terms of social contributions, welfare and insurance, DURC is undoubtedly an effective measure to combat the use of undeclared work. Involving a bipartite body, such as Casse Edili, is also an important means to involve employer organisations and trade unions, and to increase their responsibility in combating the use of undeclared work and preventing unfair competition, particularly in public tenders.
Lastly, inspections during the execution of public works should be intensified to check the actual effectiveness of DURC. This measure could also be enhanced through a system of evaluation indicators on the work carried out by Casse Edili.
Main organisations responsible: INPS, INAIL, Casse Edili
Liliana Bàculo and Sara Gaudino