Edited by Marzio Scaglioni, Leila Rguibi and Antonio Giardina
On May 7th, the Decree-Law No. 60/2024 (hereinafter “the Decree” or “Cohesion Decree“) called “Additional urgent provisions on cohesion policies” was published in the Official Gazette. This Decree has multiple purposes, including, on the one hand, to carry out a reform of cohesion policy that has been included as part of the revision of the National Recovery and Resilience Plan in order to accelerate and strengthen the implementation of interventions financed by the Cohesion Policy Fund 2021-2027 and aimed at reducing territorial gaps. On the other hand, to give a further impulse to the employment market through the deployment of about €2.8 billion for subsidized hiring of certain categories of workers, incentives for self-employment, help for major companies in crisis, and to further stimulate the labor market in the southern regions.
The main changes regarding subsidized hiring of employees as well as further interventions pertaining to the labor market are outlined below.
Youth Bonus (Art. 22 of the Decree)
This incentive allows private employers who, from September 1st, 2024 and until December 31st, 2025, hire non-executive personnel under 35 y.o. (never employed on a permanent basis) with a permanent employment contract, for a maximum period of 24 months, exemption from the payment of 100% of total social security contributions (excluding “INAIL” work insurance premiums and contributions), up to a maximum amount of €500 on a monthly basis for each worker.
In the case of hires at an office or business unit located in the regions of Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia, the exemption is recognized for a maximum amount equal to €650 on a monthly basis for each worker. The exemption does not apply to domestic work relationships and apprenticeships (while it does apply in the case of previous employment with apprenticeships not continued in ordinary permanent employment relationships).
It should be noted that this type of exemption also applies to individuals who, on the date of the incentivized hiring, were employed on an open-ended basis under a different employer that partially benefited from the exemption in question (so-called portability of the exemption).
In addition, it has to be highlight that the effectiveness of this incentive is subject, pursuant to Article 108(3) of the Treaty on the Functioning of the European Union, to the authorization of the European Commission.
Finally, it should be noted that the enjoyment of this incentive is also subject to compliance with the “General Principles for the Use of Incentives” governed by Article 31 of Legislative Decree 150/2015, in addition to the specific requirements set forth in the Decree itself.
Women’s Bonus (Art. 23 of the Decree)
The Decree recognizes the exemption, for a maximum period of 24 months, of 100% from the payment of social security contributions due from the private employer up to a maximum limit of €650 on a monthly basis (excluding “INAIL” work insurance premiums and contributions), for each female employee, hired on a permanent basis from September 1st, 2024 until December 31st, 2025.
This exemption is intended for women who alternately fall into one of the following categories:
- women of any age, without regular paid employment for at least 6 months, residing in the regions of the Single Special Economic Zone (hereinafter “ZES“) for the South of Italy;
- women who fall within those sectors identified by special ministerial decree in light of Article 2, point 4(f) of European Regulation No. 651/2014 i.e., women employed in professions or sectors characterized by a male-female disparity rate that is at least 25% higher than the average male-female disparity in all economic sectors of the Italian labour market;
- women of any age who have been without regular paid employment for at least 24 months, wherever they reside.
The measure also specifies in order to qualify for this exemption, it will be necessary to register a net employment increase calculated on the basis of the difference between (i) the number of workers employed recorded in each month and (ii) the number of workers averaged over the previous 12 months.
Hiring bonus in Single Special Economic Zone (Art. 24 of the Decree).
This measure provides for the exemption, for a maximum period of 24 months, of 100% from the payment of social security contributions due by the private employer up to a maximum limit of €650 on a monthly basis (excluding “INAIL” work insurance premiums and contributions), for each employee hired on a open-ended basis (as long as not classified as executive) from September 1st 2024 until December 31st, 2025. The exemption is granted only to private employers who employ up to 10 employees in the month of hiring the employee for whom the exemption is requested.
Other requirements imposed by the Decree are:
- the employee must be 35 years of age or older;
- the employee must have been unemployed for at least 24 months;
- the employee must be employed at an office or production unit located in the ZES.
Furthermore, the effectiveness of this incentive is subject, pursuant to Article 108(3) of the Treaty on the Functioning of the European Union, to the authorization of the European Commission.
It should be noted, that also in this case, the benefitting of this incentive is subject to compliance with the “General Principles for the Use of Incentives” governed by Article 31 of Legislative Decree no. 150/2015.
With regard to the above-mentioned subsidized hiring, the Government – as part of the Decree under analysis – has specified that these incentives will be subject to annual expenditure limits. Indeed, if the monitoring activity reveals, even prospectively, the achievement of the expenditure limit, even taking into account the territorial constraints of the financial coverage, the Italian Social Security Institute (“INPS”) will not proceed to accept further communications for access to the benefits.
It is also specified that the beneficiaries of these exemptions are only the employers and not also the workers; however, there is no pension detriment about the ordinarily provided mount.
Finally, the burden will be on the worker to report as well as self-certify the existence of the subjective conditions entitling the exemptions in place.
Incentives for self-entrepreneurship and self-employment
The government also intervened with two additional measures designed to promote self-entrepreneurship and freelancing.
Articles 17 and 18 of the Decree named “Autoimpiego Centro Nord ” and “Resto al SUD 2.0,” respectively, support, with vouchers and non-repayable grants, the start-up of entrepreneurial and freelance activities, either individually or collectively, by (i) young people under 35 y.o., (ii) those unemployed for at least 12 months, (iii) unemployed, inactive and unemployed women, and (iv) unemployed beneficiaries of social safety nets who are recipients of the “GOL” program measures.
The Ministry of Labor, within 60 days of the publication of the Decree, will be expected to issue in accordance with the Minister of European Affairs, the South Cohesion Policies and the National resilience recovery plan, a decree specifying the arrangements for the two above mentioned measures.
Establishment of Steering Committee for workers beneficiaries of social shock absorber and employed by major companies in crisis
As of July 1st, 2024, as part of the active policy plan under the National resilience recovery plan, as well as in order to facilitate more efficient and timely use of the European Globalization Adjustment Fund for Workers Expelled from Work (EGF), is established a Steering Committee coordinated by the Ministry of Labor which is the managing authority of such fund.
Within 30 days of the Decree’s entry into force, the Ministry of Labor will issue a decree in which the composition and way of operation will be defined, as well as the criteria for participation and activation of the Steering Committee.
Employers in the private sector operating in the Italian territory with a total workforce of 250 workers or more, and who have been undergoing social safety net for at least two years without interruption, may apply to the Ministry of Labor for the activation of the aforementioned Steering Committee in accordance with the modalities which will be described within the decree of the Minister of Labor.
Incentives for self-employment in strategic sectors for the development of new technologies and the digital and ecological transition
This measure provides social security reliefs for unemployed individuals who have not reached the age of 35 y.o. and who start an entrepreneurial activity in the Italian territory, as of July 1st, 2024 and until December 31st, 2025, which operates within the strategic sectors for the development of new technologies and the digital and ecological transition.
The above category of individuals may apply for, an exemption from the payment of 100% of total social security contributions, excluding premiums and contributions due to the National Institute for Insurance against Accidents at Work (“INAIL”), up to a maximum amount of €800 on a monthly basis for each worker hired from July 1st, 2024, to December 31st, 2025, and who on the date of hiring is under 35 years of age.
This incentive will also be subject to the expenditure limits authorized by the Decree itself.
The exemption is guaranteed for the maximum period of 3 years and, in any case, no later than December 31, 2028, and does not apply to domestic work relationships or apprenticeships. Moreover, the same cannot be combined with other contribution exemptions.
Finally, businesses started by the above-mentioned individuals can apply to INPS for an activity contribution, which does not contribute to taxable income, for the amount of €500 monthly for the maximum duration of 3 years and, in any case, not beyond December 31st, 2028.
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