Employment Briefing 18/2021 - HRIT
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Employment Briefing 18/2021
NEWSLETTER
Employment Briefing 18/2021
Our clients
Their offices
INDEX
The re-employment contract .................................................................................................2
Initial indications from INPS on the re-employment contract ........................................... 4
Regulatory forecasts ........................................................................................................................ 4
The re-employment contract.......................................................................................................... 4
Employers who may benefit from the measure ........................................................................ 5
Framework, extent and duration of the benefit ....................................................................... 5
Conditions for qualifying for the benefit .................................................................................... 6
Compatibility with state aid legislation........................................................................................ 8
Coordination with other benefits ................................................................................................. 9
1NEWSLETTER
THE RE-EMPLOYMENT CONTRACT
Article 41, Legislative Decree 73/2021 (otherwise known as the Sostegni-bis decree) converted by
Law 106/2021, introduced a new type of permanent subordinate employment contract that is not
structural in its nature (being stipulated between 1st July and 31st October 2021), aimed at
encouraging, with total exemption from social security contributions, the employment of those
unemployed who have demonstrated their willingness to be inserted into the labour market in the
phase following the Covid pandemic.
The table below illustrates the aforementioned regulatory provision, highlighting its most
significant features.
Re-employment contract
Permanent employment contract aimed at encouraging insertion into the
labour market of the unemployed, pursuant to Article 19, Legislative Decree
Definition
150/2015, in the phase of the resumption of activities following the Covid
pandemic that may be stipulated between 1st July and 31st October 2021.
Form Written as evidence.
The definition, with the consent of the employee, of an individual placement
Placement project with a duration of 6 months aimed at ensuring the adaptation of the
project professional skills of the employee to the new working context is a condition
of hiring through the re-employment contract.
The penalties governing unlawful dismissal provided for by current legislation
are applied during the placement period.
At the end of the placement period, both parties may withdraw from the
Withdrawal at
contract, pursuant to Article 2118 of the Civil Code, with notice beginning from
the end of the
the same period, during which the regulations governing the re-employment
placement
contract continues to be applied.
Should neither of the parties withdraw, the relationship continues as a
standard permanent employment relationship.
Applicable Although not expressly provided for, the standard regulations governing
regulations permanent employment relationships apply.
Private employers, with the exception of the agricultural sector and domestic
work, who hire employees through the re-employment contract are granted,
Contribution
for a maximum period of 6 months, an exemption of 100% from the payment
benefits
of total social security contributions to be paid by the employer, with the
exclusion of any premiums and contributions due to INAIL, up to a maximum
2NEWSLETTER
amount of €6,000 on an annual basis, re-calculated and applied on a monthly
basis, without affecting the rate of calculation of pension benefits.
Without affecting the general principles of use of the incentives referred to in
Article 31, Legislative Decree 150/2015, exemption from contributions is
granted to private employers who, during the 6 months prior to hiring, have
not proceeded with individual dismissals for objective justified reasons (Article
3, Law 604/1966) or collective redundancies (Law 223/1991) in the same
productive unit.
A dismissal ordered during, or at the end of, the placement period, or a
collective or individual dismissal for objective justified reasons of an employee
based in the same productive unit and classified with the same level and legal
category as the employee hired with the exemption, carried out in the 6
months following hiring, leads to the revocation of the exemption and the
recovery of any benefits previously granted.
For the purposes of calculating the applicable residual period for the use of
the exemption, the aforementioned revocation has no effect on other private
employers who hire the employee through a re-employment contract.
In case of resignation by the employee, the benefit is recognized for the period
of the effective duration of the relationship.
For the duration of the employment relationship beyond 6 months, the
contribution exemption benefit is cumulative with contribution exemptions
Accumulation provided for by current legislation and, in cases of withdrawal from the
contract with notice at the end of the placement period, is subject to recovery
by the social security Agency.
The contribution exemption benefit is granted pursuant to Section 3.1 of the
communication of the European Commission C (2020) 1863 final, of 19th March
2020, containing a “Temporary framework for state aid measures to support
EU
the economy in the current Covid-19 emergency”, and within the limits and
authorization
under the conditions set out in the same communication. The effectiveness
of the provisions is therefore subject to, pursuant to Article 108, Paragraph 3,
of the TFEU, authorization by the European Commission.
The contribution exemption benefit is recognized within the limits of lower
contributory revenues of €585.6 million for the year 2021 and €292.8 million
Spending for the year 2022.
limits INPS monitors compliance with spending limits and, should any deviation
occur, including prospectively, with respect to the aforementioned spending
limit, no other exemption measures are to be adopted.
3NEWSLETTER
INITIAL INDICATIONS FROM INPS ON THE RE-EMPLOYMENT CONTRACT
With Circular No. 115/2021, INPS provided initial indications for the management of social security
obligations for the exemption from contributions related to the so-called Re-employment
Contract established by Article 41, of the Sostegni-bis Legislative Decree 73/2021.
In particular, the Institute clarifies the scope of application of the exemption, postponing
instructions for the use of the measure to a specific subsequent message, with particular regard
to the procedures for applying for the exemption, which will be made available at the beginning
of September 2021, and how employers are to fill in tax returns.
REGULATORY FORECASTS
Exceptionally, from 1st July to 31st October 2021, the re-employment contract is established as a
permanent employment contract aimed at encouraging the unemployed to re-enter the labour
market pursuant to Article 19, Legislative Decree 150/2015, in the phase of resumption of activities
following the Covid emergency, subject to the definition, with the consent of the employee, of an
individual project placement of 6 months.
At the same time, an exemption has been introduced for those private employers who hire
employees using the aforementioned re-employment contract, recognized for a maximum period
of 6 months (with the exception of the agricultural sector and domestic work), equal to 100% of
total social security contributions due by employers, with the exclusion of those premiums and
contributions due to INAIL, up to a maximum amount of €6,000 on an annual basis, re-calculated
and applied on a monthly basis, without affecting to the rate of calculation of pension benefits.
The effectiveness of the provisions is subject to the authorization by the European Commission,
as outlined through decision C (2021) 5352 final of 14th July 2021.
THE RE-EMPLOYMENT CONTRACT
Private employers hiring through the re-employment contract may access exemption on condition
that, should recruitment be carried out through the use of other types of contracts, including
temporary, the incentive in question can no longer be applied. Specifically, the use of the
exemption does not legitimize:
• The establishment of an employment relationship in the form of an apprenticeship contract;
• The transformation of an ongoing temporary relationship into a permanent contract.
Unemployed individuals are considered as unemployed by electronically declaring, through the
online labour policy portal, their immediate availability to carry out work and participate in active
labour policy measures, as agreed with an employment centre.
The re-employment contract provides, with the consent of the employee, an individual placement
project aimed at guaranteeing the development of the worker's professional skills in the new
working context. The placement is to have a duration of 6 months, during which the sanctions
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provided for by current legislation are applied, governing unlawful dismissal with the consequence
that early withdrawal from the relationship involves the possible reintegration of the employee or
the payment of compensation.
At the end of the placement period, both parties may withdraw from the contract with notice
starting from that moment and during which the regulations governing the re-employment
contract continue to apply. Should, at the end of the placement period, neither of the parties
withdraw from the contract, the relationship is to continue as a standard permanent employment
relationship.
Although not expressly provided for in Article 41 of the Sostegni-bis Decree, the normal regulations
governing a permanent employment relationship apply to the contract in question.
EMPLOYERS WHO MAY BENEFIT FROM THE MEASURE
The benefit may be accessed by private, including non-profit making, employers, with the
exception of the agricultural and domestic work sectors, who have recruited through the re-
employment contract during the period between 1st July and 31st October 2021.
The measure in question does not apply to:
• The public sector (concept and status pursuant to Article 1, Paragraph 2, Legislative Decree
165/2001);
• Companies in the financial sector (those with 6-digit ATECO codes within the fields 64, 65 and
66).
FRAMEWORK, EXTENT AND DURATION OF THE BENEFIT
The benefit is available up to the limits of the resources specifically allocated, with INPS
authorizing the use of the measure only subsequent to having verified the resources available.
The amount of the exemption is equal, without affecting the rate of calculation of pension
benefits, to 100% of the total social security contributions due by employers, up to an annual
maximum amount of €6,000, to be re-calculated and applied monthly. The maximum threshold
for exemption from employer contributions with reference to the monthly pay period is therefore
equal to €500 (€6,000/12), to be re-proportioned for employment relationships established and
terminated during a given month, considering a reference measurement of €16.12 (€500/31) per
day. In the case of part-time employment, the benefit ceiling must be reduced proportionally.
In terms of determining those contributions subject to the benefit, which operates in terms of
contributions actually due, it is necessary to refer to those employer contributions which may be
effectively exempt. Specifically, in addition to any premiums and contributions due to INAIL, the
following INPS contributions are not subject to relief:
• Contributions, where due, to the “Fund for the provision to private sector employees of
severance pay as per Article 2120 of the Civil Code”;
• Contributions, where due, to the Funds referred to in Articles 26, 27, 28 and 29 of Legislative
Decree 148/2015, to the Inter-sectoral Territorial Solidarity Funds of the Autonomous Province
5NEWSLETTER
of Trento and to the Bilateral Solidarity Funds of the Autonomous Province of Bolzano-Alto
Adige, as well as the contribution to the Solidarity Funds for the air transport and the airport
system sectors;
• Contributions of 0.30% of taxable salaries for the financing of interprofessional funds for
continuous training;
• Contributions that are not of a social security nature and those conceived for the purpose of
providing elements of solidarity to the relevant social security management schemes (solidarity
contributions for payments intended for supplementary pensions and/or healthcare funds;
solidarity contributions for employees in the entertainment of sports sectors).
The additional IVS (Invalidity, Old Age and War Survivors) contributions, intended to finance the
increase in contribution rates of the FPLD pension fund in an amount equal to 0.50% of taxable
salaries, is subject to the application of contribution exemptions, with the simultaneous reduction
of the annual portion of severance pay by the amount equal to predicted contribution increases.
Therefore, once the exemption from the payment of additional IVS contributions has been applied,
the employer will not have to reduce the annual portion of severance pay or, rather, will have to
carry out this reduction to an extent equal to the share of the aforementioned excluded
contributions, due to the application of the annual ceiling of €6,000 for the use of contribution
exemption.
In case of application of measures for the allocation of severance pay to pension funds and the
fund for the disbursement to employees in the private sector of the severance pay referred to in
Article 2120 of the Civil Code, the exemption is calculated on the social security contributions due,
net of any reductions resulting from the application of the aforementioned compensatory
measures.
In addition, in cases of employment with a permanent contract within 6 months of the termination
of a previous temporary contract, the provision regarding additional contributions of 1.40%
provided for fixed-term contracts is to apply.
The measure is valid for a maximum period of 6 months, starting from the date of the incentive
and the period of use of the incentive may only be suspended in cases of compulsory absence
from work due to maternity leave, including early maternity leave, with a temporal deferment of
the period of application of the benefit.
CONDITIONS FOR QUALIFYING FOR THE BENEFIT
The right to legitimate use of the exemption is subject to compliance, on the one hand, with the
general principles on recruitment incentives and, on the other hand, with the regulations governing
the protection of working conditions and compulsory insurance for employees and, finally, by
certain conditions specifically provided for by the Sostegni-bis Decree.
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Contribution exemption does not apply in the case of one of the following
conditions:
• Recruitment violates the right of precedence;
• Suspensions from work associated with a non-Covid crisis or corporate
reorganization are taking place or those using leasing contracts (a company
affected by suspensions for reasons connected to the Covid emergency can in
any case proceed with new recruits by means of a re-employment contract and
therefore access the benefit), except in cases where recruitment or temporary
hiring is aimed at employees at a level other than that possessed by the
suspended employees or those to be employed in productive units other than
those affected by the suspension.
With reference to temporary agency contracts, the economic benefits related to
recruitment are transferred to the user.
The late submission of the mandatory online communication relating to the
establishment and modification of employment or temporary agency relationships
is to result in the loss of the part of the benefit relating to the period between
the effective date of the relationship and the date of the late communication.
The scope of the benefit is particular in its nature and, as such, prevails over the
General
conditions provisions of Article 31, Paragraph 1, letter a), Legislative Decree 150/2015 and,
therefore:
• Recruitment with the re-employment contract allows for benefits in terms of
the exemption from contributions, even if constituting the implementation of
an obligation as established by law or collective bargaining agreements;
• The benefit provision does not apply in cases in which the recruitment concerns
employees dismissed in the previous 6 months by an employer who, on the
date of dismissal, had a working relationship with the hiring employer from a
perspective of either a significant coincidence of asset ownership or the
existence of control or managerial relations, considering however that the
benefit is, in terms of the subsequent relationship, recognizable for the duration
of any residual periods;
• The principle of the accumulation of benefits must also be considered
absorbed, according to which, for the purposes of determining the right to
benefits and their duration, the periods in which the employee has performed
their working activity in favour of the same entity are accumulated, by way of
subordinate or temporary work.
The application of contribution exemption is also subject to compliance with the
following conditions:
• Compliance with social security contribution obligations (DURC);
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• The absence of the violation of the fundamental regulations for the protection
of working conditions and compliance with other legal obligations;
• Compliance with national collective agreements and contracts, as well as
regional, territorial or company agreements, signed by the most widely
represented trade union organizations at a national level.
The right to the legitimate use of the measure is subject to the existence, at the
date of recruitment, of the following conditions:
• The employee must be considered as unemployed, pursuant to Article 19,
Legislative Decree 150/2015;
• Employers must not have proceeded, in the 6 months prior to hiring, with
individual dismissals for objective justified reasons (Article 3, Law 604/1966,
except for those dismissals resulting from an absolute unsuitability for work or
for exceeding the official time of respite) or collective redundancies (Law
223/1991), in the same productive unit;
Employers who proceed with the following are excluded from benefit exemption
and are liable for the repayment of any benefits received:
• The dismissal of an employee for whom the benefit is granted during or at the
Specific end of the placement period;
conditions • Collective or individual dismissals for objective justified reasons of an employee
in the same productive unit and classified with the same level and legal
category as an employee hired with the exemption in question, in the 6 months
following the facilitated hiring.
Furthermore, if the employee for whom the benefit has already been partially
applied is hired again by the same or another employer with a re-employment
contract in the period from 1st July to 31st October 2021, the new relationship may
benefit from exemption for the remaining months due and the previous period of
use, even if revoked, must in any case be considered for the calculation of the
remaining period due.
In case of resignation of the employee, the contributory benefit is applied for the
effective duration of the employment relationship.
COMPATIBILITY WITH STATE AID LEGISLATION
The benefit is granted pursuant to Section 3.1 of the communication from the European
Commission C (2020) 1863 final, of 19th March 2020 (otherwise known as the Temporary
Framework), and within the limits and under the conditions set out in the same communication,
on the basis of which the Commission considers State aid compatible with the internal market
when meeting, among others, the following conditions:
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• Amounts do not exceed €1,800,000 (per company and gross of any taxes or other charges) or
do not exceed €270,000 per company operating in the fishing and aquaculture sector;
• Benefits are granted to companies that were not already in difficulty as of 31st December 2019;
• By way of derogation from the previous point, benefits are granted to micro or small enterprises
that were already in difficulty as of 31st December 2019, provided that they are not subject to
insolvency proceedings according to national law and have not received rescue or restructuring
aid;
• Benefits are granted by 31st December 2021.
Furthermore, considering that any such benefits fall under the remit of the Deggendorf clause,
beneficiaries of subsidies whose recovery is mandatory in execution of a decision from the
European Commission can in any case access aid, net of the amount due and not reimbursed,
including interest accrued up to the date of disbursement.
INPS will register the measure in the National State Aid Register. For the purposes of temporary
agency recruitment, the burden of not exceeding the ceiling is to be borne by the user.
COORDINATION WITH OTHER BENEFITS
The exemption is cumulative, for the duration of the relationship beyond 6 months, with
contribution exemptions as provided for by current legislation; therefore, the fruition of the benefit
does not prevent the recognition of further contribution exemptions. However, for the entire
duration of application of the benefit in question, equal to 100% of employer contributions due,
only the aforementioned exemption will apply. From the month following the one in which the
period of application of the benefit ends, with a maximum duration of 6 months, any further
exemptions or concessions may be applied, but net of the period of application of the contribution
exemption provided for by the Sostegni-bis Decree.
Therefore, if the employer concerned intends to make prior use of the exemption for the
establishment of the re-employment contract, subsequently:
• the exemption for the recruitment of disadvantaged women will provide the right to the benefit
in question for 6 months and, starting from the following month, the possibility of applying for
exemption for the hiring of disadvantaged women provided for by the Budget Law 2021 for a
further 12 months;
• the incentives for hiring the disabled will provide, for the first 6 months of the relationship,
access to the re-employment exemption and, at its conclusion, in the case of specific
authorization in this regard, the additional benefit for the remaining relevant period;
• the incentives for hiring young employees provided for by the 2018 and 2021 Budget Laws will
provide access to the exemption in question, first for a maximum period of 6 months and,
starting from the following month, access for the remaining period (30 months or, in the case
of young employees in southern regions, only for the exemption referred to in the Budget Law
2021, 42 months) to exemption for the young.
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This also applies in cases in which employers intended to make use of benefits that do not fall
within the scope of hiring incentives and, in particular, with reference to the so-called Southern
tax relief, which may be applied, for the same employee, only from the month following the end
of the application of the re-employment exemption and for the duration of the aforementioned
Southern tax relief.
HRIT remains available for any further clarifications.
With best regards,
HRIT
09/09/2021
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