Italy: The “Employer of Record” Model

The “Employer of Record” model has no legal recognition or basis in the Italian system. The only scenario in which a worker may formally be employed by an entity whilst performing their duties exclusively in the interests of a third-party company is staff supply. This is permitted only through employment agencies authorized by the Ministry of Labour in accordance with a tripartite structure: i) a commercial contract between the user company and the authorized agency and ii) an employment contract between the agency and the worker. Any different form of intermediation between a worker and the entity benefiting from the work performed may be deemed a case of unlawful staff supply, with the possible application of sanctions and criminal responsibility.

With the rise of new organizational models that enable companies to operate across borders without establishing a direct presence in the foreign territory, the international labour market is becoming increasingly flexible and unstructured. Among these organizational solutions, the Employer of Record (EoR) – already widely used, for instance, in the Nordic and Anglo-Saxon countries – has been recently mentioned, albeit incidentally, by the Italian Revenue Agency in ruling no. 54 of 27 February 2026, concerning the preferential tax regime for repatriated employees and relating to an individual initially formally employed in Switzerland by an EoR company and subsequently in Italy, through the Italian EoR subsidiary belonging to the same Swiss group.

In essence, the term “EoR” refers to a company that formally employs workers on behalf of a client company, managing all the administrative, tax and social security aspects of the relevant employment relationships. The employees’ work, however, is carried out for and in the exclusive interest of the client company, which effectively exercises managerial, supervisory and disciplinary authority, tailoring the services received to the achievement of its own objectives. In other words, the EoR acts as a purely formal employer, whilst the client company benefits directly and without any intermediation from the work performed. This scheme – as simple as it is straightforward – allows companies to operate in foreign markets without establishing their own structure there, delegating the bureaucratic and administrative management of employment relationships to a specialized local entity, sometimes a branch of an international EoR.

However, under our legal system, a model such as that of the “Employer of Record” has no legal recognition or basis. The only scenario in which a worker may formally be employed by an “employer” whilst performing their duties exclusively in the interests of a third-party company is staff supply (Articles 30–40, Legislative Decree No. 81/2015), which is, however, permitted only through specific employment agencies authorized by the Ministry of Labour and enrolled in the relevant register, in accordance with a strictly regulated tripartite structure: a commercial contract between the user company and the authorized agency, and an employment contract between the agency and the worker. Outside this framework and these specific conditions, there is the risk that any form of intermediation between a worker and the entity benefiting from the work performed, namely the figure of a purely formal employer such as the EoR, may be deemed a case of unlawful staff supply, with significant consequences (including criminal penalties) in terms of sanctions, all the more so in light of the amendments introduced by Law No. 56/2024.

Nor can the EoR be classified as one of the other possible forms of legitimate “triangulation” provided for under our legal system, namely secondment – which occurs when an employer, in order to serve its own interests, temporarily places one or more employees at the disposal of another entity for the performance of a specific work activity – and tender contract, in which a company (contractor) undertakes to carry out a project or provide a service by organizing the necessary resources, including the work of its own employees, for the benefit of the client: in neither of the two cases just mentioned, in fact, is the interposition of a purely formal employer envisaged, as is the hypothesis, instead, of the EoR scheme.

Indeed, in Italy, as in other countries of continental Europe, the EoR model is not applicable, and resorting to it may expose to significant risks, not only in terms of employment law.

 

Key Action Points for Human Resources and In-House Counsel

• The “Employer of Record” model has no legal recognition in the Italian system. The only scenario in which a worker may formally be employed by an “employer” whilst performing their duties exclusively in the interests of a third-party company is staff supply. This is permitted only through employment agencies authorized by the Ministry of Labour pursuant to a strictly regulated tripartite agreement: a commercial contract between the user company and the authorized agency, and an employment contract between the agency and the worker;
• Outside the described framework, any form of intermediation between a worker and the entity benefiting from the work performed may be deemed a case of unlawful staff supply, with the possible application of sanctions and criminal responsibility.