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In brief

On 14 August 2020 Italian Government enacted a new Decree (document in Italian here), introducing new measures aimed at supporting employees and businesses affected by the COVID-19 crisis.

This new Decree provides for the following:


1. Salary support  schemes (“CIGO”, “FIS” and “CIGD”)

Employers who suspended or reduced their business activity can apply for 9 weeks of salary support, which can be extended for an additional 9 weeks (for a maximum total of 18 weeks), once the first 9 weeks period has been fully used. The maximum 18 weeks have to be used between 13 July and 31 December 2020. Periods of salary support already requested and authorized under decree “Cura Italia” (see more on this decree here) which will be used, even in part, after 12 July 2020, will be charged to the first period of 9 weeks mentioned above.

The payment of an additional contribution, calculated at 9% or 18%, is required by employers who will benefit from the second period of 9 weeks of salary support. The contribution rate depends on the reduction in turnover the employer suffered as a result of the suspension or reduction of the business activity. No additional contribution payment has to be paid by employers who suffered a reduction in turnover equal or superior to 20% or started their business activity after 1 January 2019.

Applications must be filed within the end of the month following the one in which the suspension or reduction of the business activity occurred.

2. Social contribution exemption for employers a salary support scheme going forward

An exemption from payment of social security contributions is granted to employers who used salary support schemes in the months of May and June 2020 and decide not to apply for the further 18 weeks period of salary support mentioned above in point 1.

The exemption is granted for a maximum of 4 months, to be used by 31 December 2020, calculated at twice the amount of hours of salary support the employer have already benefited from during the months of May and June 2020.

3. Social contribution exemption in case of hiring of employees on an open-ended employment contract

An exemption from social security charges is granted to employers who hire employees on an open-ended contract (including the transformation of a fixed-term employment contract into an open-ended one), until 31 December 2020. The exemption is granted for a maximum of 6 months starting from the hiring date and up to the maximum amount of EUR 8.060,00 per year.

4. Fixed-term employment contracts

Save for the 24 months maximum duration limit provided by the law, it is possible to renew or extend fixed-term employment contracts without mentioning business related reasons, once and for a maximum period of 12 months, until 31 December 2020.

5. Ban on terminations

Individual and collective terminations for business related reasons are prohibited when an employer has not entirely used the salary support scheme (now extended for an additional 18 weeks – see point 1 above)  or the exemption from social security contributions mentioned in point 2 above.

Instead, terminations are not prohibited in the following cases:

  • total closure of the business activity;
  • entering into a shop collective agreement with the unions aimed at incentivizing termination of employees who voluntary decide to join it;
  • bankruptcy without temporary continuation of the business.

We are expecting additional clarifications by the Ministry of Labor on whether the ban on terminations applies to employers who never benefitted from salary support schemes or will not use them in the future, as the provisions are not totally clear on this point. We recommend carrying out a thorough assessment before implementing individual or collective terminations at this time.

6. Salary support schemes for employers settled in the regions mostly affected by COVID-19

Employers having production units in the regions of Lombardy, Veneto and Emilia Romagna, who suspended or reduced their business activity as a result of the enforcement of restrictive measures related to COVID-19, can apply for social shock absorbers, for a maximum of 4 weeks, to cover periods of suspension / reduction of work that occurred between 23 February, and 30 April  2020. Applications must be filed by 15 October 2020.

7. Reduction of social security contributions for employers in southern Italy

Subject to authorization by the European Commission, employers having production units in regions considered economically depressed and with high unemployment rates, will have the possibility to benefit from a 30% reduction of social security charges, calculated on the overall amount due between 1 October and 31 December 2020.


Massimiliano (Max) Biolchini joined Baker McKenzie in January 1999. He became a local partner in the Milan office in 2004 and was elected partner in 2011. He is the Head of the Italian Employment Law Practice and is member of the Steering Committee of the EMEA Employment Practice Group. He advises clients on all aspects of labor and employment law. He regularly contributes to the employment section of the prestigious Italian business newspaper Il Sole 24 Ore.


Uberto Percivalle is a partner in the Firm’s Milan office, where he has practiced since 1990. He focuses on employment law.


Antonio Luigi Vicoli is counsel in the Employment & Compensation Practice Group of Baker McKenzie Italian offices. He is a multilingual lawyer with English proficiency. Antonio is professionally qualified under the laws of Italy and admitted to practice in Italy, enrolled with the Lawyers’ Bar of Milan.