On 28 June 2019, Decree Law n. 34 of 30 April 2019 concerning “urgent measures for economic growth” (the so-called “Growth Decree”), was converted into Law no. 58 of 28 June 2019, which entered into force – after the publication In the Official Journal – on 14 July 2019.
The so-called “Growth Decree” – mainly aimed at boosting economic growth through tax cuts – intervened with some significant innovations and incentives from an employment law perspective as well.
1. The so-called “Expansion Contract” (“Contratto di espansione”)
Purpose and Definition
On an experimental basis for years 2019 and 2020, the new institute applies to companies with more than 1.000 employees, interested in the implementation of re-industrialisation and reorganisation processes involving:
- a structural technological development of their activity;
- new hirings responding to a need of renewal of workforce professional skills;
- redundancies and/or working hours reductions.
Implementation Procedure and Contents
Companies willing to implement the mentioned “expansion contract” are required to:
- follow a special consultation procedure involving the Labour Ministry and the most representative trade unions;
- draft a specific company’s “requalification project” providing for measures concerning implementation methods, number of training hours, professional technical skills to be implemented, number of employees interested in the reorganisation.
The final agreed version of the “expansion contract” shall contain:
- a timetable of the envisaged new hirings;
- the number of employees to be hired under open-ended employment contracts, together with the indication of their professional capabilities;
- the number of employees involved in a working hours reduction or benefiting from the “pension slide” option (infra).
Working Hours Reduction and Extra-Ordinary Wage Integration Treatment (“CIGS”)
Employees whose working hours are going to be reduced within the abovementioned reorganisation or reindustrialisation plan can benefit from the extra-ordinary wage integration treatment (the so-called “CIGS“, “Cassa integrazione guadagni straordinaria“) provided by the National Social Security Authority (INPS), which supplements their wage for a period up to a maximum of 18 months, even non-continuous.
“Pension slide” Option
The employer is entitled to incentivise employees who are going to reach the pension requirements within the following 60 months (i.e. 5 years) to terminate their employment relationships, by stipulating settlement agreements with a 5-year “pension slide“. Throughout the mentioned period, employees are entitled to receive from the company, a monthly indemnity proportionate to the pension treatment they would earn if they were entitled to retire upon the date of termination of their employment relationship.
2. Hiring Incentives
High School Graduates Hiring Incentives
With the purpose of enhancing the integration of young people into the labour market, starting from year 2021, the “Growth Decree” recognises – for a maximum time of 12 months – the partial exemption from the payment of social security contributions in favour of companies that:
- donate to high schools at least € 000 (EUR) for the requalification and modernisation of professional laboratories;
- hire, with open-ended employment contracts, young graduates from the same educational institutions, in conclusion of their school cycle.
The decree also confirms economic covers for the implementation of the following incentives, as provided by Budget Law 2019 (Law no. 145 of 30 December 2018):
- “Young Excellence Bonuses”: according to which, for year 2019 only, private employers who hire, with an open-ended employment contract, a young graduate with a master’s degree achieved before the age of 30 with a mark of 110 cum laude within the legal duration of the course, will receive a partial dispensation – for a period of 12 months – from the payment of social security contributions up to the limit of € 8.000,00 on an annual basis, for each worker hired;
- “Hiring incentives in the Southern Regions”: according to which, for years 2019 and 2020, private employers who hire, in the southern regions of Italy and with an open-ended employment contract, individuals under 35 or over 35 who have been unemployed for more than 6 months, will receive a dispensation – for a period of 12 months – from the payment of social security contributions within the maximum limit of € 8,060,00 (EUR) on an annual basis, for each employee hired.