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The measures introduced by the Italian government to support work

 December 30, 2020

The Italian government’s “August Decree”, "Relaunch Decree” and “Cure Italy Decree” have allocated a total of around € 35 billion to support work, preserving employment and guaranteeing adequate levels of income for workers and families. Measures such as the ‘cassa integrazione’ (fund to supplement earnings) for all types of company and allowances for self-employed workers have been introduced and extended, and new measures have also been introduced to further boost support for families and businesses, as well as to support and protect categories of workers who were previously excluded from the various protection schemes, such as domestic workers, carers and other particularly vulnerable individuals.

  • ‘Cassa integrazione in deroga’ (exceptional fund to supplement earnings): the Cure Italy Decree extended this exceptional fund to supplement earnings throughout Italy, for all employees, in all production sectors, setting aside a total of € 4 billion. For employers (including companies with fewer than five employees) that have had to suspend or reduce their activity due to the epidemiological emergency, it is possible to resort to the exceptional ‘Cassa Integrazione’ fund to supplement earnings, on the new grounds of "Covid-19", for a maximum duration of 9 weeks. This possibility has also been extended to companies that already benefit from the non-standard ‘Cassa Integrazione’. After the first 9-week extension granted by the Relaunch Decree, the August Decree then strengthened the schemes to supplement earnings as well as the ‘Solidarity Fund’ for an additional 18 weeks.
  • Exemption from paying contributions: any companies that have already used these earnings supplement schemes, and do not ask to extend them, shall be entitled to an exemption from paying their respective social security contributions, for a maximum of four months, up to 31 December 2020. Up until that date, companies that hire employees on a permanent basis will also be excluded from paying social security contributions, for a maximum of six months from when the employees are hired,
  • Concessions for companies in southern Italy: in order to stimulate business growth and employment in disadvantaged areas following the crisis, with a particular focus on southern Italy, the August Decree introduced a 30% relief on the pension contributions that companies must pay for all employees, for the period between October and December 2020.
  • Changes to exceptional earnings supplement payments: to avoid delays in payment of the ‘Cassa integrazione in deroga’ (exceptional fund to supplement earnings), the Relaunch Decree also allowed companies with under five employees to apply directly to INPS (Italian National Institute of Social Security). Employers who opt to receive a direct payment from INPS must submit their application together with the key figures required for the relative calculation, paying an advance on the benefit to workers. INPS then authorises the applications and pays the advance on the benefit within 15 days from receiving said applications. The size of the advance is calculated based on 40% of the authorised hours for the entire period. Once the employers send INPS the full set of their data, INPS pays the residual benefit amount or collects any excess advance payments from employers.
  • With regard to the ‘Wage Subsidy Fund’, which normally covers companies employing between 5 and 50 people, the Cure Italy Decree introduced the possibility for the standard allowance to be exceptionally used by companies with between 5 and 15 employees, with a derogation being introduced regarding the limits on the amount that can be drawn.
  • The ‘ABI’ (Italian Banking Association) signed an agreement with INPS (Italian National Institute of Social Security) and trade union organisations, allowing workers who have been suspended from work due to the Covid-19 emergency to receive an advance on the ordinary and exceptional “Cassa Integrazione”, equal to € 1,400. To receive these payments, the procedures no longer require paper forms to be sent with the IBAN certified by bank or post office workers, as the ID code used can be validated by the IT systems.
  • Indemnities: the Italian government's measures have introduced a number of indemnities, which cannot be combined with pensions or salaries. In particular:
    • The August Decree introduced new allowances for specific categories of workers: an indemnity of € 1,000 has been introduced for seasonal workers in the tourism, spa and entertainment industries, who have been badly affected by the epidemiological emergency, and to other categories of workers, including members of the ‘entertainment workers' pension fund’ who meet certain requirements, seasonal employees other than those working in tourist and spa establishments, intermittent workers and door-to-door sales people. In addition, a € 600 indemnity is available for seafarers and seasonal sports workers. The indemnity for self-employed workers and professionals registered with compulsory private pension providers will be paid also for the month of May 2020 and will be increased to € 1,000.
    • The Cure Italy Decree also introduced an indemnity of € 600 for almost 5 million people: professionals not enrolled with official registers, people working under a “co.co.co.” agreement (freelance work contracts coordinated by an employer) with a separate national insurance and pension scheme, artisans, traders, farmers and sharecroppers, seasonal workers in tourism and spa establishments, workers in the entertainment industry and agricultural workers. The Relaunch Decree went on to state that the indemnity in place for March would also be paid out in April. Anyone who applied at a later date may also receive the indemnity: seasonal workers other than in the tourism sector, occasional workers and intermittent workers.
    • € 1,000 for the month of May: the Relaunch Decree introduced this indemnity for freelancers with a VAT number, who are not retired and are not enrolled with other compulsory forms of social security; to receive this indemnity, the individuals in question must have recorded at least a 33% decrease in their income in March and April 2020 compared with the same period of 2019. This indemnity is also available for those with a “Co.Co.Co” (freelance work contract coordinated by an employer), whose work relationship ended when the decree came into force.
    • Artisans, traders and owner-farmers: the Relaunch Decree stated that, as of May, these categories were to be classed alongside partnerships or limited liability companies, falling within the scope of the activities of the Agenzia delle Entrate (Italian Revenue Agency), which provides non-refundable indemnities to businesses that have suffered a 33% drop in turnover. These indemnities are calculated based on the loss in turnover, with a minimum value of € 1,000.
    • ‘Last-resort income fund’ for anyone excluded from the € 600 indemnity: the Cure Italy Decree established a ‘last-resort income fund’, aimed at guaranteeing income support for employees and self-employed workers who have had to cease, reduce or suspend their employment relationship or business as a result of the COVID-19 emergency. € 300 million has been allocated to this fund for 2020, dedicated to professionals enrolled with official registers and other professionals who are excluded from the € 600 indemnity, helping a total of 500,000 people. Professionals enrolled with official registers: these professionals will continue to be managed by their professional funds for the months of April and May, using the resources made available by the ‘last-resort fund’, which has been refinanced up to € 1.15 billion.
  • ‘Emergency Income’: the Relaunch Decree introduced this form of extraordinary support for families in difficulty due to the Covid-19 emergency; the ‘emergency income’ is paid in two instalments, each with a value of between € 400 and € 800 (€ 840 for families with severely disabled members or members who are not self-sufficient). The August Decree introduced an additional 'emergency income’ payment of € 400, subject to families submitting a new application by 15 October 2020. This support measure is destined for a million families; in order to qualify, families must be resident in Italy, their income in April must be lower than the amount of the benefit and they must have movable assets worth less than € 10,000 as at 2019 (this threshold may be raised up to a € 25,000 depending on the family unit) and an ISEE value of less than € 15,000. This ‘emergency income’ cannot be claimed together with other forms of government support made available following the Covid-19 emergency and is not paid out to those with a pension, to those with an employment contract with a gross salary above the amount of the benefit itself or to those who already receive Italy's ‘citizenship income’.
  • NASPI and DISCOLL: the August Decree extended standard unemployment benefits (NASPI) and unemployment benefits for Co.Co.Co. (freelance work contracts coordinated by an employer) (DISCOLL), that would otherwise have expired between 1 May 2020 and 30 June 2020, for an additional two months, provided that recipients have not also received the € 600 indemnity introduced by the Cure Italy Decree and the Relaunch Decree. The amount paid for each additional month is the same as the last month of the original benefit.
  • Suspension of dismissal procedures: the August Decree extended the suspension of dismissals for the entire period in which companies are covered by the ‘Cassa Integrazione’ fund to supplement earnings (18 weeks) or, alternatively, by the exemption from making contributions to the fund (4 months). These suspensions do not apply in the event of dismissals caused by companies definitively ceasing to operate. The Cure Italy Decree had already suspended the initiation of dismissal appeal procedures for the two months from when it came into force and, during the same 60-day period, any pending procedures that began after 23 February 2020 were also suspended. The Relaunch Decree granted a five-month extension to the period of time set by the Cure Italy Decree, during which individual and collective dismissals are prohibited (even those for justified and objective reasons), and during which any ongoing proceedings are also suspended.
  • Wage subsidies to avoid redundancies: in accordance with the new European Temporary Framework, the Relaunch Decree introduced the possibility for local authorities to adopt aid measures to support the economy, contributing to companies’ and self-employed workers’ wage costs (including social security contributions) and avoiding lay-offs during the pandemic. This subsidy has a duration of 12 months, it is aimed at employees who would otherwise have lost their jobs and it must not exceed 80% of their gross monthly salary.
  • Renewal of fixed-term contracts: the August Decree stated that, up until 31 December 2020, without prejudice to the maximum overall duration of 24 months, it is possible to renew or extend fixed-term employment contracts, even without reason, for a maximum of 12 months and only once.
  • Simplified digital identities: the Cure Italy Decree stated that INPS (Italian National Institute of Social Security) would be able to issue digital identities (INPS pin numbers) through a simplified procedure, by receiving an electronic version of the elements necessary to identify those requesting one.
  • Domestic workers and carers: the Relaunch Decree introduced an indemnity of € 500 per month for April and May 2020 for domestic workers with one or more work contracts of over 10 hours a week, in place as at 23 February 2020. This law, for which just under € 500 million has been set aside, excludes domestic workers who live with their employer and those who receive emergency income or citizenship income.
  • Incentives for workers: workers with a gross annual income of up to € 40,000 who carried out their jobs at their workplace during the month of March (not via smart working) shall receive a € 100 incentive (in proportion to the number of days worked).
  • People working for municipal social and welfare services will also be able to benefit from this, thanks to the provision made in the Cure Italy Decree.
  • Parental leave: for parents who are private-sector employees, the Cure Italy Decree introduced the right to specific parental leave for children under the age of 12, granting an allowance equal to 50 per cent of their salary. Setting aside a total of € 660 million, the Relaunch Decree extended the duration of this leave from fifteen days to a total of thirty days, to be taken on a continuous basis or divided up, while the period to make use of this leave was also extended from 3 May until 31 July 2020.
  • Bonus for babysitting services: the Cure Italy Decree introduced a voucher to purchase babysitting services, for up to a maximum of € 600, to be used for services provided in 2020, starting from 5 March. The Relaunch Decree increased this voucher from € 600 to € 1,200 (as it can be used over 2 months), also making it available for enrolment in summer camps; this initiative was strengthened after the ‘Family policies fund’ was refinanced by € 150 million. For health sector employees, this bonus was increased from € 1,000 to € 2,000 (as it can be used over 2 months), with approximately € 680 million being set aside.
  • Paid leave pursuant to Italian law no. 104 strengthened: the Cure Italy Decree provided for an additional twelve days of the paid leave granted by current legislation to assist disabled family members and covered by social security contributions (so-called "paid leave pursuant to Italian law no. 104/92"). These additional twelve days of leave, available in March and April 2020, were added to the three days of monthly leave already provided for by law, for a total of eighteen days for the two months mentioned. For healthcare workers, this benefit was granted in line with the organisational needs of the national health service companies and organisations involved in the COVID-19 emergency and of the healthcare sector. The Relaunch Decree confirmed the same measure for the months of May and June 2020, setting aside a total of € 800 million.
  • Smart working: until the end of the COVID-19 emergency, parents employed in the private sector with at least one child under the age of 14 have the right to work from home, even without an individual agreement to do so, provided that there is no other parent in the household benefiting from income support schemes should their work have been suspended or terminated, and as long as the other parent is working. All public-sector employers can opt for smart working for all their employees until the end of the state of emergency and, in any case, up until 31 December 2020.
  • Smart working equipment and rules on sick leave: the Cure Italy Decree provided public administration employees with the IT equipment necessary for smart working (laptops and tablets). For both public and private sectors, periods of sickness or quarantine or trust-based stays at home shall be equivalent to sick leave.
  • Incentives and contributions for workplace sanitisation and safety: for companies, the Cure Italy Decree introduced incentives for sanitisation and increased safety at work by granting a tax credit, as well as making contributions through the establishment of an INAIL fund; a specific fund was also set up to provide local authorities with contributions. The Relaunch Decree further strengthened these commitments, setting aside € 2 billion for a 60% tax credit for any expenses incurred in 2020 to reopen businesses safely to the public, up to a limit of € 80,000 per beneficiary. The Relaunch Decree also introduced a tax credit for the sanitisation of work environments: those running a business or carrying out artistic activities or a profession, associations, foundations and other private entities, including tertiary sector organisations, are entitled to a 60% tax credit for any expenses incurred in 2020 for the sanitisation of the workplace and work tools, as well as for the purchase of personal protective equipment and other devices aimed at protecting the health of workers and users, up to a maximum of € 60,000 per beneficiary.
  • ‘Emergence’ of employment relationships: the Relaunch Decree made it possible for employers to apply for employment contracts to be signed with foreign citizens in Italy or to declare the existence of any previously undeclared work, in order to guarantee adequate levels of individual and collective health protection as a result of the health emergency, encouraging any illegal employment relationships to come to light. At the same time, foreign citizens whose residence permit expired in October 2019 may apply for a temporary, six-month residence permit, valid only in Italy. If, upon expiry of this temporary residence permit, the citizen has an employment contract or evidence of a salary and social security payments to prove that he/she is working, then said permit will be converted into a residence permit for employment purposes. These rules apply to the agricultural, farming and fishing industries, as well as to personal care services provided for the individuals themselves or for members of their family with disabilities and domestic work to support family needs.

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