Voucher scheme for seasonal work in agriculture, Italy
The Italian government launched an initiative in 2008 to combat undeclared work, by establishing a voucher scheme in the agricultural sector (sistema dei voucher nel settore agricolo). As an experimental measure, employers could apply for vouchers which could then be used as payment to workers undertaking supplementary work in the sector during the grape harvest. The vouchers include social security and insurance contributions.
In 2005, more than 2.5 million farm businesses existed in Italy, employing 1.3 million full-time workers, only 15% of whom were dependent employees. In 2008, in order to meet labour demand in the agricultural sector, employers requested permission to employ 40,000 workers from non-EU countries for the harvesting of agricultural produce – out of the 80,000 migrant workers envisaged by the 2007 ‘Flussi’ Decree on immigration flows. The harvesting period in question was to last between 20 days and nine months.
However, despite the normative instruments in force, the Italian agricultural sector is susceptible to widespread exploitation and illegality. In 2005, the proportion of irregular workers had increased to 22.2%, up from 20.9% in 2001. Often, given the absence of an employment contract regulating the duration of the working day and the wage, the remuneration of agricultural workers is tantamount to piece work, being paid according to the quantity of boxes of fruit or vegetables picked. Seasonal work in agriculture is an occupational category that is formally covered by an employment contract but in practice is often subject to forms of irregularity or the total evasion of social security contributions and insurance payments.
In Italy, in September and October of each year, the wine-producing industry hires workers, students and pensioners to harvest grapes, which are then processed to produce wine or foodstuffs. Estimates of employment in the industry during the grape harvest are rendered imprecise by the numerous occupational categories involved: family helpers, agricultural workers already employed by the wine-growing farm, and seasonal and irregular workers hired according to variations in production.
Following a ministerial decree of 12 March 2008, the government launched an experimental scheme based on a voucher system for supplementary work in the agricultural sector during the grape harvest. The pilot project for the 2008 grape harvest only concerned students aged under 25 years and pensioners. It involved the following actors, namely the:
- employment centres, to which the workers must communicate their availability for supplementary work;
- National Social Security Institute (Istituto nazionale per la previdenza sociale, Inps), as the trial agency for the experimental service;
- Italian Post Office (Poste Italiane) for the issue and encashment of the vouchers;
- National Workplace Accident Insurance Institute (Istituto nazionale assicurazione infortuni sul lavoro, Inail), which registers the workers on the voucher scheme for insurance cover.
In order to implement the initiative, Inps and Inail stipulated special agreements with various regional administrations and with the autonomous northern provinces of Trento and Bolzano.
The voucher programme aims to regularise the work of students and pensioners who offer their labour on an occasional basis during the grape harvest. The objective is to encourage workers to emerge from the informal economy and to guarantee better conditions both for employers and occasional workers. Employers are able to use regular labour without the stipulations of collective agreements or individual employment contracts. On the other hand, the workers are guaranteed insurance cover by Inail, although they are not eligible for the social ‘shock absorbers’ (ammortizzatori sociali) on conclusion of the work. The latter mainly consist of special funds to support workers in companies experiencing severe economic difficulties.
Employers select from the list of available workers those that they want to hire for the grape harvest and then apply to Inps for electronic vouchers. Before the beginning of the harvest season, the employer purchases these vouchers. They are credited as payment to the worker on a magnetic card and then used to make withdrawals at post offices or cash dispensers, or to purchase paper-based vouchers at the provincial Inps offices or at certain post offices in the northeastern Veneto and Friuli Venezia Giulia regions.
The application for vouchers must state the worker’s details and tax code, the start and expected end date of the work, the place of work and the expected number of vouchers for each worker. This documentation also registers the workers concerned with Inail. All of the necessary information must be updated in the case of workers leaving or new workers being hired, by changing the period of activity stated on the registration and transmitting this information to Inail prior to the change taking place.
The experimental scheme envisages that each employer can use the occasional supplementary labour of students and pensioners up to a maximum budget of €10,000. The limit for the worker is 30 working days and the maximum remuneration is €5,000 in a calendar year. The value of each voucher is €10. This nominal value, calculated on the basis of the average hourly pay rate in the agricultural sector in 2007, includes a contribution to the Inps social security fund – set at 13% for this occupational category and within this scheme – and to Inail (7%), as well as a 5% fee for management of the service. The net value of the voucher – that is, the net remuneration received by the worker – is therefore equal to €7.50. Thus, each voucher includes both the Inail workplace-accident insurance and the Inps social security contribution, which is credited to the worker’s contributory position; the latter already exists or has been opened by Inps.
At the end of the work period, the employer must declare the actual amount of work performed by each worker, confirming or changing the information given at the time of registration. The management system – Inps during the trial period – verifies that the work performed has been paid for by comparing the payments made by the employer before the end of the occasional employment relationship with the total wages due. If the figures balance, Inps sends the payment order to the worker. If Inps finds a total or partial absence of payments, it sends the employer a demand of payment for the sum lacking, and notifies the workers concerned.
Evaluation and outcome
Achievement of objectives
The project is still too recent for the results to be evaluated. The ministerial decree emphasised the need for discussion with the trade unions when the pilot phase ended on 31 December 2008. Based on these discussions, it will be decided whether the initiative should be extended to other types of supplementary work.
The voucher scheme used for the grape harvest was due to last until the end of 2008. Within a few months after August 2008, Inps had sold 540,000 vouchers, which implies the regularisation of 36,000 workers for 108,000 working days. Early in 2009, Inps was due to collect data on the results, which will then be evaluated by the Ministry of Labour, Health and Social Policies (Ministero del Lavoro, della Salute e delle Politiche Sociali).
Obstacles and problems
The trial introduction of vouchers in the agricultural sector did not address the problem of undeclared work among those who are neither students nor pensioners. Many other workers in Italy are hired to harvest grapes. Inspections have found that, in several areas in the south of Italy (the so-called Mezzogiorno), farm businesses prefer to maintain irregular employment relationships rather than purchase vouchers.
The pay is exempt from taxes and does not affect the supplementary worker’s status of being unemployed or non-employed. Like occasional supplementary employment, the work covered by the scheme does not give entitlement to sickness, maternity or unemployment benefits, nor to family allowances.
Data are still insufficient to evaluate the impact of the test programme on encouraging employers and workers to emerge from the practice of undeclared work. However, the marked disparities in the purchase of vouchers reported by Inps show that the effectiveness of the measure is closely connected with the discretion of the employer, who can choose whether or not to employ workers in compliance with the law.
The experimental phase was still ongoing at the time of writing. Nevertheless, based on the sale of vouchers, the government – according to Article 22 of Decree Law 112/2008 enacted by Law No. 133 of 6 August 2008 – has decided to extend the voucher scheme to all agricultural activities, even non-seasonal ones, that have an annual business turnover of less than €7,000.
The pilot project focused on only one type of seasonal agricultural employment. However, supplementary work also concerns many other activities, such as: domestic work, gardening, the cleaning and maintenance of buildings, roads, parks and monuments, personal coaching, work for sporting, cultural or charitable events, emergency or social work, holiday work by young people aged under 25 years attending school or university, door-to-door deliveries and street sales of daily and periodical press. Occasional work also applies to work by family helpers – according to Article 230 bis (meaning revised version) of the Italian civil code – in the economic activities of retail, tourism and services. The above activities, however, are covered by sectoral agreements and do not require further regulation.
Main organisations involved:
- Ministry of Labour, Health and Social Policies (Ministero del Lavoro, della Salute e delle Politiche Sociali)
- National Social Security Institute (Istituto nazionale previdenza sociale, Inps)
- Italian Workers’ Compensation Authority (Istituto Nazionale per l’assicurazione contro gli infortuni sul lavoro, Inail)
- Ministry of the Interior (Ministero dell’Interno)
- Medicine Without Frontiers (Medici Senza Frontiere)
- General Confederation of Italian Agriculture (Confederazione Generale dell’Agricoltura Italiana, Confagricoltura)
- Italian Confederation of Owner-occupier Farmers (Confederazione Italiana dei Coltivatori Diretti, Coldiretti)
- Italian Confederation of Agriculture (Confederazione Italiana Agricoltori, CIA)
- Italian Federation of Agroindustrial Workers (Federazione Lavoratori Agro Industria, Flai-Cgil)
- Agroindustrial, Food and Environment Federation (Federazione agricola alimentare ambientale industriale, Fai-Cisl)
- Italian Union of Agroindustrial Workers (Unione Italiana Lavoratori Agroalimentari, Uila-Uil)
Tania Toffanin, University of Milan