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Legislative news in the Labor field in Italy introduced with the 2021 Budget Law

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published on 14 January 2021 | reading time approx. 5 minutes

   

Introduction of new furlough periods ("cassa integrazione"), further extension of the redundancy block and establishment of a fund for the exemption of contributions for self-employed workers and professionals: given the continuation of the state of emergency following the Covid-19 pandemic, these are the main issues that the Legislator addresses with Law no. 178/2020 concerning the State Budget for the financial year 2021 and the multi-year budget for the three-year period 2021-2023, which came into force on 1 January 2021.

 

  

  
   
Below is a summary of the main news introduced in the field of labor law:

 

     

Social safety nets

The Budget Law has introduced a further 12 weeks of furlough (both ordinary and in derogation) and Ordinary Check (FIS) related to the epidemiological emergency from Covid-19, with no additional contribution to be paid. These salary integration treatments are granted to workers hired after March 25th, 2020 and in any case in force on 1 January 2021.
    
The salary integration treatment periods introduced with the Budget Law are the following:

  • a maximum of 12 weeks between 1 January 2021 and 31 March 2021 with reference to the Ordinary Redundancy Fund (CIGO);
  • a maximum of 12 weeks between 1 January 2021 and 30 June 2021 with reference to the Redundancy Fund in Derogation (CID) and the Ordinary Check (FIS).

    
The law specifies that the salary integration periods, already requested and authorized by virtue of the provisions of the so-called “Ristori Decree” and placed temporally - even partially - in periods subsequent to 1 January 2021, shall be considered as part of the 12 weeks introduced by the Budget Law.
     

Exemption from payment of social security contributions for companies that do not require social safety nets

As already established by the so-called 'August Decree' as well as the 'Rilancio Decree', the 2021 Budget Law also provides for the possibility of a contribution relief as an alternative to using the additional weeks of wage integration.

 
In fact, private employers - with the exception of the agricultural sector - who do not request to benefit from the additional periods of wage integration, are granted an exemption from the payment of social security contributions (excluding bonuses and INAIL contributions) up to a maximum of 8 weeks. It has to be used by 31 March 2021 - and in any case within the limit of the hours of wage integration used in the months of May and June 2020.
      

Prohibition of dismissal

With the 2021 Budget Law, the block on layoffs has been further extended, thus moving the final deadline to 31 March 2021. This means that until 31 March 2021, the start of collective dismissal procedures remains precluded and pending procedures started after 23 February 2020 remain suspended. Furthermore, until that date, there is a ban on dismissals for justified objective reasons pursuant to art. 3 Law 604/1966 as well as pending procedures pursuant to art. 7 Law 604/66, regardless of the company workforce.

 
As already provided for under the 'August Decree' and by the 'Ristori Decree', the following are not subject to the ban in question:

  • dismissals motivated by the definitive cessation of the business activity, consequent to the liquidation of the company which does not provide for the continuation of the activity (even if only partial), unless the transfer of a set of assets / activities constitutes a company (or branch) transfer pursuant to art. 2112 of the Italian Civil Code;
  • the hypotheses of a company collective agreement, stipulated by the comparatively most representative trade unions at national level, which provide for the incentivized termination of the employment relationship (limited to workers who decide to join the aforementioned agreement);
  • dismissals in the event of bankruptcy, when the provisional operation of the company is not foreseen.

    

Extension or renewal of fixed-term employment contracts

The right to extend or renew – only once and for a maximum of 12 months – fixed-term contracts has been extended until 31 March 2021, even in the absence of the reasons referred to in art. 19 of the Legislative Decree n. 81 of 15 June 2015.
     

Protection for fragile workers

The equalization to hospitalization of the period of absence from service for employees (public and private) with a certified condition of risk of immunosuppression from outcomes of oncological pathologies, from carrying out life-saving or severe disability therapies, has been extended until 28 February 2021. In addition to this, the Budget Law establishes that these categories of employees can work in smart-working mode, even through the assignment to different tasks or the performance of specific training activities (including online).
     

Incentives to recruit employees of age under 36

In order to promote stable youth employment, a total contribution relief for the permanent hiring of young people under age 36, as well as for the transformation of their fixed-term contracts into permanent contracts, has been being introduced for the period between 1 January 2021 and 31 December 2022. The law sets out for a full exemption of the social security contributions paid by the employer (with the exclusion of INAIL premiums and contributions) within the maximum limit of 6,000 Euros per year. The incentive lasts for a period of 36 months. The maximum duration of the contribution relief is raised to 48 months for the recruitment in a head office or production unit located in the regions of Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia.

 
The exemption in question applies to employers who have not proceeded, in the 6 months prior to the recruitment, nor in the 9 months following it, to individual dismissals for justified objective reasons or to collective dismissals of workers classified with the same qualification in the same production unit.
     

Icentives to the employment of women

The Budget Law 2021 has extended for the years 2021 and 2022 the contribution relief pursuant to art. 4 of Law no. 92/2012 for the hiring of women with fixed-term employment contracts. This incentive entitles employers to a total exemption from the payment of social security contributions paid by the employer (excluding bonuses and INAIL contributions), for a maximum duration of 12 months. The duration can be increased to 18 months in the event of hiring on a permanent basis of the employee or a transformation of the fixed-term contract into a permanent one. The maximum amount of the incentive is of 6,000 euros per year.

 
It is specified that the hiring must lead to a net employment increase calculated on the basis of the difference between the number of workers employed recorded in the each month and the number of workers employed on average in the previous 12 months.
    

Incentives for the employments in South Italy

To ensure the protection of employment levels in areas characterized by a serious situation of socio-economic hardship also caused by the Covid-19 pandemic, the partial contribution exemption introduced by art. 27 of the August Decree has been extended for the period 2021-2029. It applies to private employers operating in the regions of Abruzzo, Basilicata, Calabria, Campania, Molise, Puglia, Sardinia and Sicily.

 
The contribution exemption is equal to:

  • 30 percent of the social security contributions to be paid up to 31 December 2025;
  • 20 percent of the social security contributions to be paid for the years 2026 and 2027;
  • 10 percent of the social security contributions to be paid for the years 2028 and 2029.

 
With reference to the so-called 'Remain in the South' measure, the 2021 Budget Law provided for its further extension, by raising the maximum age of beneficiaries from 45 to 55 years to access the subsidy measure.
   

Fund for exemtion of contributions for autonomous and professionals

With an initial financial endowment of 1 billion euros for the year 2021, the Fund was introduced for the exemption from the payment of social security contributions due by self-employed workers and professionals. The definition of the criteria and methods for the recognition of the relief will take place - within 60 days from the date of entry into force of the Law in question - with specific decrees of the Minister of Labor.
This Fund is intended to finance the partial exemption from the payment of social security contributions (excluding the I.N.A.I.L. premiums) paid by:

  • self-employed workers and professionals enrolled in the social security management of the I.N.P.S. as well as professionals enrolled in the management bodies of compulsory forms of social security and assistance who have received, in the tax year 2019, a total income not exceeding 50,000 euros and have suffered a decrease in turnover or fees in the year 2020 compared to year 2019 not less than 33 percent;
  • medical doctors, nurses and other professionals and operators already retired, who have been hired for the Covid-19 emergency.

   

Opzione Donna

The so-called 'Opzione Donna' is extended for a further year, with unchanged requirements.
 

Calculation of pension requirements for vertical part-time contracts

The 2021 Budget Law, resolving an aspect in the pension field that has been under debate for years, has established that in the vertical and cyclical part-time employment contract periods not involved in actual working activity are also to be included in the calculation of seniority useful for the determination of the right to pension treatment. With reference to contracts terminated before the date of entry into force of the Law in question, it is specified that the recognition of periods not fully worked is subject to the filing of a specific application with suitable documentation from the person concerned.
      

Mandatory paternity leave

For the year 2021, the mandatory paternity leave has been increased from 7 to 10 days (covered by a full wage) which fathers must take within 5 months of the birth, adoption or fostering of the child, with the option to add another optional day if the mother gives up one day of her maternity leave.

 
In addition, the Budget Law has extended the mandatory and optional paternity leave to cases of perinatal death.
  

Baby bonus and bonus for mothers with disabled children

The so-called Baby Bonus - paid exclusively until the child's first year of age, or within the first year of entry into the family unit following adoption - has been extended, with unchanged requirements, for the year 2021 for each child born or adopted from 1 January 2021 to 31 December 2021.

 
Furthermore, there is a new support tool in favor of unemployed or single-income mothers belonging to single-parent households with dependent children with a recognized disability of not less than 60 percent. The Bonus for Mothers with disabled children consists of a monthly contribution up to a maximum of 500 euros net, for each of the years 2021, 2022 and 2023.

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