Prepared by Francesca Tironi, Valentina Panettella, Marzio Scaglioni, Davide Poli
On January 1st, 2021 took effect the Law no. 178/2020, concerning “Preliminary Budget for the 2020 fiscal year and multi-year preliminary Budget for the three-years period 2020-2022” (so called “Budget Law 2021”), finally published in the Italian Official Gazette on December 30th, 2020.
As expected, several new regulations and law provisions have been implemented as far as labor law, social security contributions and individual income taxes management are concerned, interesting employers and tax-agents engaged in personnel administration, among which – on the one hand – the strategy of relaunching employment is further strengthened for through several contributory relief measures for the benefit of the employers and – on the other hand – the wage and income protection provisions already settled for in 2020 are confirmed to deal with the emergency issues dictated by the epidemiological crisis from COVID-19 and for development of the reduction plans of the tax wage burdening on employees’ salaries.
The following is a brief analysis framework for the news of major interest on the predicted items.
For new permanent hires (open-ended employment contracts), as well as for the transformations of fixed-term contracts into permanent contracts carried out in the two-year period 2021-2022 referring to employees who have not yet completed the thirty-sixth year of age, is strongly extended the scope of the exemption from social security contributions already introduced by the Budget Law 2018, up to 100% of the social security contribution paid by the employer, for a maximum period of thirty-six months, and within the annual limit of € 6,000. The duration of the facility is extended up to forty-eight months for Companies recruiting from a headquarters or production units located in the Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia regions. The conditions of access and revocation of the facility already provided for by the Budget Law 2018 remain valid (albeit modified).
At the same time, on an experimental basis, is extended the scope of the contribution exemption already provided for by Law no. 92/2012 for the hiring of working women in the two-year period 2021-2022, up to 100% of the social security contribution in charge of the employers, and within the maximum annual amount of € 6,000.
Finally, the exemption from contributions already provided for by art. 27 of the so called “August Decree” (D.L. no.104/2020) has been structurally extended until 31 December 2029 for the benefit of employers hiring employees in offices or production units in the Regions of Southern Italy, in an amount equal to 30% of the social security contributions paid by the employer until 31st December 2025 , 20% of the social security contributions paid by the employer for the years 2026 and 2027, and 10% of the social security contributions paid by the employer for the years 2028 and 2029.
Together with the aforementioned contribution relief measures, several provisions are introduced with regard to the structural confirmation of the reduction of the tax “wedge” burden on employees’ income (already introduced by D.L. no. 3/2020, as well as relating to the extension of the mandatory paternity leave (increased from seven to ten days), and redefinition of the facilitated tax regime for inbound workers.
Among the main labor law measures, the Budget Law 2021 provides that the social shock absorbers with COVID-19 cause will be extended by an additional 12 weeks, which will be granted free of charge to all regardless of the percentage of reduction in turnover. These weeks will have to be placed between January 1, 2021 and March 31, 2021 for treatments of ordinary redundancy fund, between January 1, 2021 and June 30, 2021 for treatments of ordinary allowance and redundancy fund in derogation. Any periods of integration previously requested and authorized by art. 12 of the so called “Ristori Decree” (Law Decree 137/2020) placed after January 1, 2021, will be counted as part of the 12 additional weeks mentioned above.
In addition, the law, with reference to private employers (except those in the agricultural sector) who do not make use of social shock absorbers, reconfirms the alternative measure of exemption from the payment of social security contributions borne by them for a further period of 8 weeks, which can be used by March 31, 2021.
The aforementioned benefits will also be acknowledged for those workers hired after March 25, 2020, provided they are in force as of January 1, 2021 (the date on which the Budget Law 2021 comes into force).
With regard to wage subsidies for company crises, on the other hand, there is an extension for 2021 and 2022 of the possibility for companies that cease production to have access, as an exception to the general duration limits in force, to extraordinary wage subsidies for company crises aimed at managing staff redundancies, for a maximum period of 12 months and after an agreement with the Ministry of Labour and Social Policies.
The ban on individual dismissals for objective reasons and collective dismissals for economic reasons (with suspension of ongoing procedures) is also extended until March 31, 2021. However, this restriction remains inapplicable in the event of permanent cessation of business activities, bankruptcy, and in the case of a collective company agreement.
With reference to fixed-term contracts, the deadline up to which they may be renewed or extended is extended until March 31, 2021, provided that it is within the maximum period of 12 months and for a single time (including in the absence of the conditions set out in art. 19, paragraph 1, of Legislative Decree no. 81/2015 and subsequent amendments and additions, namely temporary and objective needs, unrelated to ordinary business; needs to replace other absent workers; other needs connected with temporary, significant and non-programmable increases in ordinary business).
It is also extended to 2021 the operativity of the so called “expansion contract” and its application not only to companies with at least 500 employees (thus reducing the limit of the regulations in force until now, which envisaged the requirement of at least 1,000 employees), but also to those with at least 250 units, under certain conditions. Lastly, the measures designed to protect fragile workers and workers with serious disabilities have been extended until February 28, 2021, with equalization of the period of absence from work with hospitalization and provision for smart working even through recourse to a different job, provided it is included in the same category or area of classification or for carrying out specific professional training activities, including remotely.
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