Hiring incentives for the under 36s, the European Union gives the green light

Who can get the 2021 hiring incentives? Analysis and in-depth analysis in light of the latest news on tax relief for under 36s

An interesting new measure has arrived that concerns the world of work, and favours the employment of young people under the age of 36. This is a total exemption from social security contributions for all companies that hire a young person on an open-ended contract, according to precise parameters.


Hiring incentives: what are they?


The hiring bonus is an initiative aimed at encouraging the employment of young people, in a period when the young population is among those most affected by the economic crisis. In fact, it is a total contribution exemption for companies, as explained by INPS in its Message 3389 of 07/10/2021: “For recruitment on open-ended contracts and for the conversion of fixed-term contracts into open-ended contracts carried out in the two-year period 2021-2022, the exemption referred to in Article 1, paragraphs 100 to 105 and 107, of Law No. 205 of 27 December 2017 (hereinafter, also Law No. 205 of 27 December 2017) is granted. 205 (hereinafter, also Budget Law 2018), is recognised to the extent of 100%. “It is therefore a total contribution exemption, provided that the premises for the measure are met, in favour of young people under 36 years of age. The measure is aimed at fostering youth employment, and has already been decided by the Budget Law of 2021, and will include hirings that follow the guidelines of the hiring bonus in relation to both 2021 and 2022. The maximum duration of the bonus is 36 months, except for the regions of southern Italy, for which it is extended to 48 months: Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia, regions that are economically considered more disadvantaged.




Who can apply for the hiring incentives


The hiring bonus is guaranteed, in the form of a total exemption from social security contributions for employees under 36, to all private employers, including those in the agricultural sector, who hire an employee with an open-ended contract.

In detail, this concerns the conversion of existing fixed-term contracts into open-ended contracts, or direct employment on open-ended contracts. Many people wonder whether this particular bonus can also be requested for employees who change from an apprenticeship contract, which is often offered to young people, to an open-ended contract. On this point, the official INPS communication is very clear: the hiring bonus cannot be applied, because other forms of facilitation are already provided. In addition, in order to apply for the hiring bonus, companies must be in order with their social security obligations and must not have violated any rules protecting workers; they must also have respected the collective agreements in force in agreement with the unions.


How the hiring bonus works


Employers can apply for access to the measure in both 2021 and 2022, and to do so they must fill in the Uniemens flow, the obligation that every month involves employers as tax withholding agents vis-à-vis INPS.

In any case, there is a limit to the contribution exemption: i.e. the employer can request, for each employee, a contribution exemption up to a maximum of €6,000 per year. Although official indications are awaited, it can be deduced from the proposals contained in the Budget Law 2021 that companies that do not comply with the criteria for accessing the hiring bonus may face various consequences: it is possible to lose the possibility of accessing the contribution relief altogether, and it is assumed in the worst case that sanctions will also be applied to those companies that receive the contribution relief despite not being entitled to it.



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