Prepared by Francesca Tironi, Marzio Scaglioni and Giulia Spalazzi
During session No. 32 of May 1st, 2023, the Italian Council of Ministers approved, under an urgent procedure, two decree-laws on labour matters, the publication of which in the Italian Official Gazette is expected in the coming hours. It should be specified that the following is the result of an analysis of the Council of Ministers’ press releases and the draft decrees that have been circulated, so in order to have certainty about the announced changes, it will necessarily be necessary to wait for the publication of the new measures in the Italian Official Gazette.
Below are the main innovations of interest contained in the drafts of the aforementioned decree-laws.
Urgent measures for social inclusion and access to employment
The first decree law is aimed at:
- Reducing the tax wedge, as far as the contribution part is concerned, for employees with gross annual incomes up to Euro 35,000. To this end, the partial exemption on the employee’s share of social security contributions for disability, old age and survivors is raised from 2 to 6% for the pay periods from July 1st to December 31st, 2023, excluding the 13th monthly instalment. The exemption is increased to 7% for all those employees whose taxable salary does not exceed a monthly amount of Euro 1,923. The Euro 3,000 threshold for fringe benefits is also confirmed for 2023, but only for employees with dependent children. Also included in the new limit of Euro 3,000 for 2023 are sums disbursed or reimbursed for the payment of household utilities for the integrated water service, electricity and natural gas. In addition, there is an extension to widowed parents of the increased single allowance provided for households in which both parents are employed.
- Combating poverty and social exclusion, with a special focus on families within which there are fragile individuals, minors or elderly people. From January 1st, 2024, a new and different national anti-poverty measure will be introduced (which will in fact replace the current Citizenship Income), consisting in an income supplement in favour of households that include a disabled person, a minor or an over-sixties and that meet certain requirements, related to the applicant’s citizenship or residence authorization, length of residence in Italy and economic conditions. In addition, employers who hire employees benefiting the above-mentioned measure with an open-ended, full or part-time employment contract, or also through an apprenticeship contract, are granted, for a maximum period of twelve months, an exemption from the payment of 100 per cent of the total social security contributions to be paid by employers, with the exclusion of the premiums and contributions due to the National Institute for Insurance against Accidents at Work, up to a maximum amount of €8,000 on an annual basis, apportioned and applied on a monthly basis. Finally, this incentive is reduced to €4,000 on an annual basis, apportioned and applied on a monthly basis in the event that the employer hires a beneficiary of the above measure with a fixed-term or seasonal, full or part-time employment contract.
- Promoting active labour policies, with the aim of ensuring adequate training for those who are not employed and are able to work, and of facilitating the matching of labour supply and demand. In order to encourage youth employment, incentives amounting to 60% of the salary for a period of 12 months have been envisaged for employers who hire young people under the age of 30, who are not included in training programs and who are registered in the PON ‘Youth Employment Initiative’. This incentive is fully cumulative with the contribution exemption, for a maximum period of thirty-six months, and with the other incentives provided for by the legislation in force.
- Strengthening occupational safety and accident protection provisions. A fund is set up at the Ministry of Labour and Social Policy for the families of students who are victims of accidents during training activities. From the point of view of the obligations imposed on employers, the following should be noted: (i) obligation to appoint the competent doctor if required by the risk assessment; (ii) the extension to self-employed workers of certain protection measures provided for construction sites; (iii) the obligation of specific training for the employer in the case of the use of work equipment for professional activities and consequent sanctions in the event of non-compliance. Finally, provisions on data sharing are introduced to strengthen the planning of inspection and supervisory activities in the Sicilian Region and the autonomous provinces of Trento and Bolzano.
- Amending the discipline of fixed-term employment contracts. Important changes are made with regard to fixed-term employment contracts, with a change in the reasons that may be given in contracts lasting between 12 and 24 months (including cases of extensions and renewals), in order to allow a more flexible use of this type of contract, while still complying with the European Directive on the prevention of its abuse. As a result, fixed-term contracts may exceed the duration of 12 months (but not 24 months) in the following cases:
- Where provided for by the collective agreements applied; and
- For needs of a technical, organizational or productive nature, as identified by the parties, in the event that collective agreements do not cover them, and in any case by the deadline of December 31st, 2024; and
- To replace other employees.
With regard to the second decree-law, the following innovations should be noted:
- Contribution for the hiring of people with disabilities. It is envisaged that entities and organizations will receive a contribution for each person with disabilities hired on a permanent basis between August 1st, 2022 and December 31st, 2023.
- Changes in the area of staff leasing. The percentage limits on recruitment under an apprenticeship contract in the case of staff leasing and the quantitative limits in the case of permanent staff leasing of specific categories of employees (“mobility employees”, unemployed persons not in the agricultural sector) are eliminated. Moreover, the exemption from compliance with the quantitative limits in the use of staff leased personnel, already provided for other cases, is extended to the case in which such staff are hired by the staff leasing agency with an open-ended employment relationship.
- Duration of the probationary period in fixed-term relationships. The timing of the duration of the probationary period in fixed-term employment relationships is made more precise, setting it at one day of actual performance for every fifteen calendar days, specifying that in any case this period may not be less than two days.
- Enhancement of the detection of evasion and violations in the area of social security contributions and of the collection of the omitted amounts, and promotion of spontaneous compliance with social security obligations. INPS’ monitoring and verification capacity is strengthened, allowing it to carry out inspections ex officio by consulting databases not only of INPS itself, but also of other public administrations. In addition, it is provided that INPS offices may invite individuals to appear in person or through representatives to provide data and information. If, in the event of an assessment report, the taxpayer makes full payment within 40 days of receipt of the report, the civil sanctions will be reduced by 50%. Within the same term, the taxpayer may also submit a request for deferment. INPS may also send the taxpayer notification of any anomalies so that the latter may correct them. The taxpayer has a term of 90 days from the notification of the communication to submit any elements, facts or circumstances to disprove what has been communicated by the Institute. The taxpayer who regularizes the anomalies and makes the payment of the contributions within thirty days is entitled to the payment of the civil penalty in an annual amount equal to 2.75% of the amount of the contribution due, and in the event of payment in instalments, the reduction of the penalty is subject to the payment of the first instalment: specific provisions are laid down for the omission or late payment of one of the subsequent instalments and for cases where the taxpayer fails to report or regularize the amount.
- Deferred payment of contribution debts. The possible instalments for premium payments have been increased from 24 to 60 months.
- Reconciliation, for social security purposes, of insurance periods for employees, self-employed and freelance workers. The rules on the reconciliation of insurance periods for social security purposes are amended, aligning the expected return to that offered by the contribution-based system, which is equal to the five-year average of the GDP growth rate.
- Simplification of information obligations upon the establishment of the employment relationship. A simplification is envisaged with regard to information and publication obligations concerning the conditions applicable to the contract and the employment relationship after the amendments to Legislative Decree No. 152/1997 as amended and integrated by the so-called Transparency Decree (Legislative Decree No. 104/2022). In particular, it is provided that the duty to provide information on (i) the duration of the probationary period, (ii) the right to receive training provided by the employer, (iii) the duration of holiday leave as well as other paid leave to which the employee is entitled, (iv) the procedure, form and terms of notice in the event of termination by the employer or the employee (v) the initial amount of remuneration or otherwise the remuneration and its components, with an indication of the period and method of payment, (vi) the schedule of standard working hours and any conditions relating to overtime work and its remuneration as well as any conditions for schedule changes, if the employment contract provides for the organization of working time in whole or in part in a foreseeable manner, (vii) the information if the employment relationship does not provide for normal scheduled working hours, concerning the mutable nature of the work schedule, the minimum amount of the guaranteed paid hours, the remuneration for work performed in addition to the guaranteed hours, the reference hours and days on which the employee is required to work, the minimum notice period to which the employee is entitled before the commencement of work, and where so agreed, the period within which the employer may cancel the assignment, (viii) the information with respect to the entities and institutions receiving the social security and insurance contributions owed by the employer and any form of social security protection provided by the employer, may be deemed to be fulfilled with the reference of the law provision and/or collective labour agreement, including also any second level agreements.
- Raising the economic limit of the so called ‘PrestO’ vouchers. It is envisaged to raise up to 15,000 Euro the amount of labour vouchers (‘PrestO’ vouchers) that can be used for occasional employment performance in sectors of congresses, exhibitions, events, spas and theme parks only. This pay-method may only and exclusively be used by all those employers who employ up to 25 permanent employees.
- Age limit abolished for apprenticeship contracts stipulated in the tourism and spa sectors. The age limit of 29 years for the stipulation of professional apprenticeship contracts for the achievement of a professional qualification in the above-mentioned sectors for a maximum period of three years is withdrawn.
- Administrative sanctions in case of non-payment of social security deductions. An amendment of the sanctioning discipline is envisaged in all cases of social contribution omission below the annual limit of 10,000 Euro. More specifically, the administrative sanction will be equal to a range from one and a half to four times the omitted amount instead of from 10,000 Euro to 50,000 Euro (pursuant Art. 2, paragraph 1 bis, DL 463/83).
Lastly, the text approved by the Italian Council of Ministers envisages rules on the establishment of the Information System for combating the so-called “caporalato” (forced labour) in agriculture; the standardization of the timeframe for submitting applications for access to the Ape Sociale (social assistance payment) and early retirement with reduced contribution requirements; amendments to the Code of the Third Sector to allow remote participation in assemblies; and amendments to the bilateral solidarity funds.
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