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In brief

On January 1, 2021, the Budget Law for the year 2021 and the period 2021-2023 came into force, providing for a number of new employment related provisions, some of which related also to the COVID-19 emergency.


Contents

  1. COVID-19 RELATED SALARY SUPPORT SCHEMES (“CIGO”, “FIS” and “CIGD”)
  2. EXEMPTION FROM SOCIAL SECURITY CONTRIBUTIONS FOR EMPLOYERS WHO DO NOT USE A COVID-19 RELATED SALARY SUPPORT SCHEME
  3. BAN ON TERMINATIONS DUE TO COVID-19
  4. EXTENSION/RENEWAL OF FIXED-TERM EMPLOYMENT CONTRACTS DURING COVID-19 EMERGENCY
  5. REDUCED SOCIAL SECURITY CONTRIBUTIONS FOR HIRING OF YOUNG INDIVIDUALS AND WOMEN
  6. PATERNITY LEAVE
  7. PROVISIONS APPLICABLE TO “FRAGILE WORKERS” WITH HEALTH CONDITIONS
  8. OPTIONS FOR EARLY RETIREMENT

COVID-19 RELATED SALARY SUPPORT SCHEMES (“CIGO”, “FIS” and “CIGD”)

Employers who suspend or reduce their business activity, due to COVID, can apply for 12 additional weeks of salary support. These can be used as follows: (i) for CIGO, between January 1, 2021 and March 31, 2021; (ii) for FIS and CIGD, between January 1, 2021 and June 30, 2021. Periods of salary support already requested and authorized under the decree “Ristori” which will be used, even in part, after January 1, 2021, will be charged to the 12 weeks period mentioned above.

EXEMPTION FROM SOCIAL SECURITY CONTRIBUTIONS FOR EMPLOYERS WHO DO NOT USE A COVID-19 RELATED SALARY SUPPORT SCHEME

The exemption from payment of social security contributions granted to employers who do not use salary support schemes is extended for an additional maximum period of 8 weeks, to be used by March 31, 2021.

BAN ON TERMINATIONS DUE TO COVID-19

Individual and collective terminations for business related reasons are prohibited until March 31, 2021. The ban applies to all employers.

Terminations can still be implemented in the following cases:

  • wind up of business activity;
  • after entering into a shop collective agreement with the unions aimed at incentivizing terminations for employees who voluntarily agree to leave their employment;
  • bankruptcy without temporary continuation of business.

EXTENSION/RENEWAL OF FIXED-TERM EMPLOYMENT CONTRACTS DURING COVID-19 EMERGENCY

Until March 31, 2021, 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. In any case the maximum duration of 24 months for fixed-term employment must always be complied with.

REDUCED SOCIAL SECURITY CONTRIBUTIONS FOR HIRING OF YOUNG INDIVIDUALS AND WOMEN

In the period 2021 – 2023, employers hiring people under the age of 36 and meeting certain requirements are entitled to a 100% reduction of social security contributions, within the limit of € 6,000/year. Contributions to INAIL (i.e. for public insurance against accidents at work) are still due. This exemption applies: (i) for 3 years all over Italy; (ii) for 4 years, in the event of hiring in certain, economically depressed regions (i.e., Abruzzo, Molise, Campania, Basilicata, Sicilia, Puglia, Calabria and Sardegna).

For 2021 and 2022, employers hiring women and meeting certain requirements are entitled to a 100% reduction of social security within the limit of € 6,000/year. Contributions to INAIL (i.e. for public insurance against accidents at work) are still due.

PATERNITY LEAVE

In the event of birth or adoption of a child, mandatory paternity leave has been raised to ten days (previously it was seven days).

PROVISIONS APPLICABLE TO “FRAGILE WORKERS” WITH HEALTH CONDITIONS

Until February 28, 2021, for employees who qualify as “fragile” due to health conditions: (i) period of absence are treated as hospitalization, in certain instances (i.e. when an employee has certification attesting to the existence of a risk condition deriving from immunodeficiency, cancer, serious disability or from the need of lifesaving therapies); (ii) employees normally carry out their duties from remote, also via assignment to different tasks belonging to the same employment level.

OPTIONS FOR EARLY RETIREMENT

A number of existing options allowing certain categories of employees (e.g., women, employees performing “burdensome” tasks, etc.) to access early retirement have been extended. Provisions are complex and we remain available to provide additional guidance on this topic: feel free to reach out to our attorneys.

Author

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.

Author

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

Author

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.