Budget Law For 2022 - employment and social security related measures

On 31 December 2021, Law no. 234 (Budget Law for 2022) introduced new regulations relating to employment and social security.

Below we have laid out a quick insight of the main changes:

Incentives for new hirings

The Budget Law introduced several financial incentives for employers in order to encourage new hirings. This includes:

• an exemption from paying social contributions of up to EUR 6,000 per year for employers that hire workers on a permanent contract from companies currently in crisis; and
• a tax relief equal to 100% of contributions due in 2022 when hiring under apprenticeship contracts;

In addition, a 50% exemption from social security contribution has been introduced for employee mothers returning to work in 2022. The maximum exemption period is one year from the return to work.

Furlough schemes and unemployment allowance

The Budget Law also introduced some changes relating to furlough schemes.

• Furlough schemes are now also available for employers with less than 15 employees, and are extended to all employees (with the exception of executive employees), including domestic employees and apprentices (as they were previously only available to those in professional apprenticeships).
• The minimum length of service required to access salary support schemes has been reduced from 90 to 30 days.
• For employers entering into “solidarity contracts” with the Trade Unions the possibility to reduce the employees’ working hours has been increased from 60% to 80%, meaning they can now reduce working hours by 80 %.
• Lastly, a new way to access the extraordinary furlough scheme (“CIGS”) has been introduced.
  • CIGS for “transitional employment agreement” grants the employer with up to 12 additional months of CIGS intervention which is aimed at supporting employees made redundant. Accordingly, employers with more than 15 employees may be granted – after the termination of the authorized CIGS ­period – with a further extraordinary salary integration for 12 months, provided that a transitional employment agreement (providing actions aimed at reemployment or self-employment) is reached with the Trade Unions.  
  • Employers that will hire, under a permanent contract, an employee involved in the transitional employment agreement will benefit from a financial incentive equal to 50% of the residual CIGS authorized and not used by that employee.

Regarding the unemployment allowance (so called “NASpI”), the minimum service period to access the indemnity has been reduced to 13 weeks of work in the last 4 years.

Additionally, the 3% reduction in the monthly amount of the indemnity has been postponed to the sixth month of unemployment (rather than the fourth). For the unemployed aged 55+, the reduction starts on the eighth month of unemployment.

Additional consultation process for redundancies

Employers with more than 250 employees who are shutting down a plant, branch or local office, which will make at least 50 employees redundant, are required to follow a special Trade Union information and consultation procedure (in addition to the regular redundancy procedure).

The enforced procedure provides that:

• 90 days before the regular redundancy procedure starts, employers are required to notify the Trade Unions and the Labour Authorities (the Ministries of Labour and of Economic development, ANPAL and the relevant regional authorities) the reasons for the redundancies and the expected closure date of the site.
• Within the following 60 days, the employer must draw up a plan to limit the employment and economic impact of the envisaged closure. The plan must be completed within 12 months and must demonstrate – amongst other things – an appropriate use of social safety nets (including the new measures in the 2022 Budget Law), measures to encourage voluntary redundancies and the possible relocation of employees to third parties.
• Within the following 30 days the plan must be discussed with the Trade Unions.

Should the consultation end without an agreement with the Unions, the employer is subject to increased costs for the regular redundancy procedure.

Any dismissal for economic reasons served before the procedure is completed are deemed as being null and void.

Employers with economic-financial imbalance are exempted from the enforced procedure.

Extra-curricular internships

The Italian Government and regions have committed to publish guidelines, by 30 June 2022, to face the misuse of extra-curricular internships by employers. The guidelines will include the need to pay the trainee a ‘participation allowance’ and an obligation on the employer to meet a minimum hiring quota of trainees after the internship is completed.