Edited by Francesca Tironi, Marzio Scaglioni, Leila Rguibi, Marco Bove and Lorenzo Vassalli
On July 3rd, 2023, Law No. 85/2023 converting, with amendments, Law Decree No. 48 of May 4th, 2023, the so-called “Employment Decree”, was published in the Italian Official Gazette no. 153/2023.
The new legislation numerous amendments to the already substantial and heterogeneous provisions set forth in Decree-Law No. 48/2023, the most interesting of which are set forth below.
Changes to the regulation of fixed-term contracts
Art. 24, paragraphs 1, 1-bis and 1-ter, of the Employment Decree, as amended by Law 85/2023, amends the regulation of the fixed-term employment contract in the private sector. First, it intervenes on Article 19 of Legislative Decree No. 81/2015, rewriting the causal grounds required for the use of fixed-term employment contracts, including those regarding agency workers (so called “lavoratori somministrati”). Specifically, without prejudice to the possibility of entering into an acausal contract of a duration not exceeding 12 months, fixed-term employment contracts may have a duration of more than 12 months, but not exceeding 24 months, only after the use of one of the following reasons:
- for needs envisaged by the collective agreements referred to in art. 51 of Legislative Decree no. 81/2015;
- in the absence of provisions in the collective agreements applied in the company, and in any case by April 30th, 2024, for technical, organizational or production needs identified by the parties;
- for the needs of replacing other workers.
All fixed-term contracts entered into in the first 12 months of the relationship between the same parties are considered acausal, including both direct and temporary agency contracts.
Moreover, by intervening on Article 21, paragraph 01, of Legislative Decree No. 81/2015, it is provided that the contract may be not only extended, but also freely renewed in the first 12 months.
For the purposes of calculating the 12-month period in which acausal fixed-term contracts may be entered into, only contracts entered into on or after May 5th, 2023, the date on which the Employment Decree came into force, are taken into account: this means that any fixed-term contracts entered into earlier will not be considered for the calculation of the 12-month acausal period.
Permanent and fixed-term agency contracts (so called “contratti di somministrazione di lavoro”)
Paragraph 1-quater of Article 24 of the Employment Decree, as amended by Law 85/2023, makes changes to Article 31 of Legislative Decree No. 81/2015, which regulates both open-ended and fixed-term employment agency contracts. In particular, by intervening on paragraph 1, first sentence, it is specified that the following are excluded from the number of agency workers under an open-ended labour agency contract:
- temporary agency workers hired through apprenticeships;
- unemployed persons who have enjoyed non-agricultural unemployment benefits or social safety nets for at least 6 months;
- disadvantaged or very disadvantaged persons, as identified by the Decree of the Minister of Labor dated October 17th, 2017.
Amendments to health and safety regulations and inspections
Article 14 of the Employment Decree, as amended by Law 85/2023, makes a number of changes to the workplace health and safety regulations set out in Legislative Decree No. 81/2008. In particular, it is provided for the following:
- The introduction of the obligation to appoint the competent doctor whenever required by the risk assessment;
- In case of buildings used by state educational institutions, the safety obligations incumbent on the administrations shall be deemed to have been fulfilled with the performance of the structural risk assessment of the buildings to be carried out jointly with the head of the educational institution, to be followed by the planning of the necessary interventions within the limits of the available resources;
- In the construction sector, the health and safety protection measures envisaged for temporary or mobile construction sites are extended to self-employed workers, with particular reference to the introduction of suitable preventive works;
- The competent doctor, on the occasion of the pre-employment medical examination, shall require the worker to produce a copy of the health and risk file issued on termination of the previous employment relationship and shall assess its contents for the purpose of formulating a suitability opinion, unless it is objectively impossible to find it;
- The monitoring of the implementation of the training agreements, as well as the control of training activities and compliance with the reference legislation, both by the training providers and by the training recipients;
- That the employer who makes use of equipment requiring special knowledge, provides his own specific training and instruction in order to ensure that the equipment is used in a suitable and safe manner.
New Skills Fund (so called “Fondo Nuove Competenze”)
Article 19 of the Employment Decree, as amended by Law 85/2023, increases, in the 2021-2027 programming period of the European cohesion policy, the allocation of the New Skills Fund in order to finance the agreements signed as of 2023 aimed at fostering the upgrading of workers’ professionalism as a result of the digital and ecological transition.
Administrative sanctions in case of non-payment of social security withholdings
Article 23 of the Employment Decree, as amended by Law 85/2023, amends the regulation of administrative sanctions in the event of failure to pay social security withholding taxes pursuant to paragraph 1-bis of Article 2 of Decree-Law 463/1983. In particular, the amendment establishes that, for omissions not exceeding €10,000, an administrative sanction of 1.5 to 4 times the omitted amount shall apply (before the amendment, an administrative sanction in the range of €10,000 to €50,000 was provided for).
It is also established that for violations referring to the omitted payments of social security and welfare withholding taxes, for the periods from 1 January 2023, the details of the violation must be notified by 31 December of the second year following the year of the violation. Time limit for notifying the administrative offence in question.
Expansion contracts (so called “Contratti di Espansione”)
Article 25 of the Employment Decree, as amended by Law 85/2023, supplements Article 41 of Legislative Decree No. 148/2015 about expansion contracts, providing that, until December 31st, 2023, in order to allow for the full implementation of the relaunch plans of groups of companies employing more than 1.000 employees, for expansion contracts entered into by December 31st, 2022 and not yet concluded, it is possible, by supplementary agreement at ministerial level, to reschedule the terminations of employment relationships within a time frame of 12 months following the original term.
Simplification of transparency obligations
Article 26 of the Employment Decree, as amended by Law 85/2023, intervenes on Legislative Decree no. 152/1997, simplifying the information obligations imposed on the employer and relating to:
- information on the employment relationship; And
- the use of automated decision-making or monitoring systems.
With reference to the information on the employment relationship, it is provided that the information obligations under letters h), i), l), m), n), o) and r) of paragraph 1 of Legislative Decree no. 152/1997, relating to the following, may also be deemed to be fulfilled by merely indicating the regulatory reference and/or the collective agreement (including the company collective agreement) applied to the employment relationship:
- duration of the probationary period;
- right to receive training provided by the employer;
- duration of holiday leave as well as other paid leave;
- procedure, form and terms of notice in the event of termination by the employer or employee; initial amount of remuneration or in any case the remuneration and its components, with an indication of the period and manner of payment;
- scheduling of normal working hours and any conditions relating to overtime work and its remuneration as well as the conditions for any shift changes;
- bodies and institutions receiving social security and insurance contributions payable by the employer and any social security protection provided by the employer.
In order to simplify communication obligations and to ensure uniformity of communications, the employer is required to deliver or make available to employees, also by publication on the company intranet, the collective agreements and company regulations applicable to the employment relationship.
With reference to automated decision-making or monitoring systems, on the other hand, it is provided that the employer or principal is also obliged to inform the employee only in the case of the use of fully automated decision-making or monitoring systems intended to provide information relevant to the recruitment or assignment, management or termination of the employment relationship, the assignment of tasks or duties as well as information affecting the supervision, assessment, performance and fulfilment of the contractual obligations of the employees.
These disclosure requirements in the case of the use of fully automated decision-making or monitoring systems do not apply to trade and business secrets.
Smart working Articles
28 bis and 42 par. 3 bis of the Employment Decree, as amended by Law 85/2023, confirm the provisions on agile working currently in force.
In particular, it is provided for the extension – from 30 June to September 30th, 2023 – of the right of public and private employees, falling within the so-called fragile categories referred to in the Decree of the Minister of Health of February 4th, 2022, to perform their working activities in agile mode also through the assignment to a different task included in the same category or area of classification, as defined by the collective labor agreements in force, without any reduction in remuneration (without prejudice to the application of the provisions of the relevant national collective labor agreements, if more favorable).
It is then confirmed, until December 31st, 2023, the right to perform agile work, in the absence of individual agreements and provided that agile work is compatible with the characteristics of the service, for the following individuals:
- employees of the private sector who have at least one child under the age of 14, provided that in the household there is no other parent who benefits from income support instruments, in the event of suspension or termination of work, and that there is no non-working parent; And
- employees of the private sector with vulnerability may perform their work in agile mode, provided that this mode is compatible with the characteristics of the work performance.
Extraordinary Wage Supplementation Fund
Art. 30 of the Employment Decree, as amended by Law 85/2023, provides for the possibility – for companies that have had to cope with situations of persistent corporate crisis and reorganization and have not been able to fully implement, during 2022 to the reorganization and restructuring plans originally envisaged due to the prolonged unavailability of company premises for reasons not attributable to the employer – to take advantage, on an exceptional basis and as an exception, of a further period of extraordinary wage supplementation until 31 December 2023, in order to safeguard the level of employment and the wealth of skills acquired by employees. The discipline dictated by Legislative Decree No. 148/2015 does not apply to the submission of the relevant applications.
Occasional working (so called “prestazioni occasionali”) for employees belonging to the tourism and spa sectors
Article 37 of the Employment Decree, as amended by Law No. 85/2023, makes some changes to the rules on occasional working for employees belonging to the tourism and spa sectors.
More in detail, for users operating in the sectors of congresses, trade fairs, events, spas and amusement parks, the total annual limit of the remuneration due by each subject to the total number of occasional workers used by him/her is raised from €10,000 to €15,000. The possibility of using occasional services is also provided for employers in the sectors of congresses, fairs, events, thermal establishments and amusement parks who employ up to 25 permanent employees.
Tourism bonus Pursuant
Article 39-bis of the Employment Decree, as amended by Law 85/2023, it has been established for a period which range from 1st June 2023 to 21st September 2023, a special allowance (so-called “Bonus Turismo”) in favour of employees belonging to a specific sector.
The beneficiaries of the above bonus are the employees who work in the tourism sector, including spas; as regard the amount of the concerned bonus, it is a special supplementary allowance that does not contribute to income formation, equal to 15% of the gross remuneration paid in relation to night work and overtime. Please consider that the employees are entitled to the above allowance are only the ones who (i) belongs to the above private sectors and (ii) have an employment income which does not exceed the threshold of €40,000 in the Fiscal Year 2022.
Corporate welfare
Article 40 of the Employment Decree, as amended by the Law 85/2023, has set out a new temporary exemption regime by way of derogation of Article 51, paragraph 3 of the Presidential Decree no. 917/1986 (hereinafter “TUIR”).
More in detail, the above new legal provision increases from € 258.23 to € 3,000 the limit of exemption from the calculation of social security and taxable income:
- for the value of the benefit in kind;
- for amounts paid or reimbursed by the employer for the payment of home billings utilities (i.e water, light and gas).
The raising of the limit to €3,000 is provided exclusively for the Fiscal Year 2023 and only for employees with dependent children (so called in Italian “figli fiscalmente a carico”), including children (i) born outside the marriage who are recognized, (ii) adopted or (iii) fostered.
It should be noted that in order to be considered as “dependent child” the latter must have children annual total income which does not exceed € 2,840.51, gross of tax-deductible expenses; this limit is raised to €4,000 euros in case of children are no older than 24 years.
In order to benefit of the above benefit, set out be the Employment Decree, it is required that:
- employers who intend to put in place the above provision give prior communication to the internal Trade Unions, if any;
- the employee must draft a self-certification in favour of the employer in which he/she states the entitlement, and, in addition, he/she must also report the Tax ID code of the dependent children.
It remains unchanged the provision that, should it arise at the time end of year adjustment, the value of the goods or services provided is higher than the established threshold, the employer must subject to the relevant deduction the amount paid for the total of its value.
For employees without dependent children, the general regime of ordinary exemption under Article 51, paragraph 3 of the TUIR will continue to apply, according to which, for social security and tax purposes, the value of the benefit in kind not exceeding €258.23 euros within the fiscal year does not contribute to the employee’s income.
Hiring incentives
The conversion into law of the Employment Decree confirms the provision currently in place for the incentives aimed at hiring beneficiaries of the “Inclusion Allowance” (the former basic income, also known in Italian as “Reddito di Cittadinanza”) and for people under 30-years-old.
- Hiring for beneficiaries of the inclusion allowance:
Article 10 of the Employment Decree, as amended by Law 85/2023, grants, to private employers who hire the beneficiaries of the inclusion allowance with a permanent and a full-time or part-time employment contract, or also by apprenticeship contract, the exemption from the payment of 100% of the total social security contributions due by the employer itself – with the exclusion of premiums and contributions due to National Institute for Insurance against Accidents at Work (“INAIL”).
The above-mentioned exemption is provided for a maximum of 12 months and in the maximum amount of €8,000 on an annual basis, to be recalculated and applied on a monthly basis. The concerned exemption is also recognized for transformations of fixed-term contracts into permanent contracts within the maximum limit of 24 months.
On the other hand, in the event that the hiring will take place with a fixed-term or seasonal contract of employment, full or part-time, the exemption will be recognized to the extent of 50%, for a maximum period of 12 months and up to a maximum amount of € 4,000 on an annual basis, also recalculated and applied on a monthly basis.
In order to benefit the incentive, employers will have to include the job offer in a dedicated web portal which is the Information System for Social and Labor Inclusion (“SIISL“).
- Under 30 employment incentives:
Article 27 of the Employment Decree, as amended by Law 85/2023, provides an incentive for employers who hire with a permanent employment contract, also with temporary employment supply purposes, and with a professionalizing apprenticeship contract employees under 30 years old who meet the following conditions:
- not exceed the age of 30 on the date of hiring;
- not be employed and not enrolled in any study or training courses (so-called “NEET”);
- be registered with the National Operational Program so called “Iniziativa Occupazione Giovani“
This incentive is provided for a period of 12 months and is equal to 60% of the gross monthly salary subject to social security contributions for hires made from June 1st to December 31st, 2023.
In addition, the above incentive can be cumulated to other exemptions or social security rates reductions provided by current legislation (e.g., apprenticeship), limited to the period of their application. In case of cumulation with another measure, the incentive is recognized to the extent of 20% of the gross monthly salary subject to social security contributions, for each NEET employee hired.
Contribution exemption
Article 39 of the Labor Decree, as amended by Law 85/2023, provides for, within the period which range from July to December 2023, the increase of the social contribution exemption, compared to the previous rules, by an additional 4% points, without regard to the rate at which pension treatment are computed.
Therefore, for the above period, the reduction on social security contributions is provided at the rate of 6% percent (instead of the previous 2%) if the monthly salary, subject to social security contributions, does not exceed the amount of €2,692 and 7% percent (instead of the previous 3%) if the monthly salary, subject to social security contributions, does not exceed the amount of €1,923.
The increase in contribution reduction provided by the Employment Decree does not apply to the accrual of 13th monthly pay.
Provision on the elimination of contribution debts
Article 23-bis of the Labor Decree, as amended by Law 85/2023, allows certain categories of workers to re-determine their contribution position after the notice payment’ ripping of up to € 1,000 referred to in Article 1, paragraph 222, of Budget Law 2023.
Those who are enrolled in the artisans’ and traders’ INPS pension schemes, self-employed agricultural workers, employer contractor and employees and professionals enrolled in the dedicated INPS pension scheme, affected by the ripping-off, will thus have the opportunity to request from INPS, the re-calculation of the cancelled debts.
The amounts due can be paid in one lump sum or in monthly installments of equal each other value by December 31st, 2023. The terms and timing of the request will be determined by INPS.
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Contact Marzio Scaglioni – Partner, PwC TLS Avvocati e Commercialisti