In a sting dubbed "operation chains", police slapped Andrea Caroti, 46, in cuffs and accused him of illegally hiring a Senegalese worker and ruthlessly pushing him into the sea off Tuscany in June last year.
"The man, saved by a lifeguard who spotted him thrashing about in the water, told his rescuer that the captain had pushed him into the sea for fear of the coast guard, which was carrying out checks," a police statement said.
Caroti had knocked him overboard "despite knowing he wasn't able to swim and save himself," the statement said.
The Livorno police and coastguard said the Senegalese man disappeared after telling the lifeguard his story, but they were able to interview witnesses. The victim had been threatened by Caroti, they said.
The captain is accused of regularly exploiting undocumented workers on his fishing vessel, making them work "backbreaking shifts for €10 ($12) a day, as well as a modest amount of fish".
Migrants who work in appalling conditions are not a new phenomenon in Italy, though it is believed to be the first time a fisherman has been arrested for exploiting undocumented workers.
Thousands of migrants, largely from Africa, scrape by as farm workers in southern Italy, where they often live in disused houses, hangars or abandoned factories with no running water, electricity or heat.
They start out picking tomatoes in Apulia in May and end up in Calabria harvesting citrus fruit the following March.