NEWSLETTER PAYROLL FEBRUARY 2024

Budget Law 2024, latest news and regulations

The Ministry of Labour, through a communication dated December 19, 2023, announced the European Commission’s acceptance of the request to extend the authorization for the use of the “Sud Decontribution” measure for an additional 6 months, until June 30, 2024. This facilitation, introduced by the 2021 Budget Law, being classified as state aid, requires specific authorization to be applied and enjoyed, even though it was already provided for until 2029. It is noted that “Sud Decontribution” provides for a maximum contributory exemption of 30% for private employers based in one of the Southern Italian Regions, concerning dependent employment relationships.

INPS, through message no. 4695/2023, clarified that, under the aforementioned authorization, the benefits in question can be applied until the month of June 2024. Additionally, the maximum amount of aid under the so-called Temporary Crisis and Transition Framework has been increased to:

  • 335,000 euros for companies operating in the fisheries and aquaculture sectors;
  • 2.25 million euros for all other eligible companies under the existing aid scheme.

With specific reference to these ceilings, the Institute specifies that:

  • if an employer operates in multiple sectors subject to different ceilings, each such activity must comply with the respective reference ceiling, and the overall maximum amount of 2.25 million euros per employer must never be exceeded;
  • they also apply to aid granted under previous versions of the Temporary Crisis and Transition Framework.

Finally, it is confirmed that the discussed decontribution cannot be applied to the primary production sectors of agricultural products, domestic work, the financial sector, and to subjects expressly excluded by article 1, paragraph 162, of the 2021 Budget Law. Instructions regarding the contributory exemption for the period from July 1, 2024, to December 31, 2029, will be provided following the authorization process.

Regarding the methods of using the measure in question, the instructions already provided by the Institute apply (most recently, circular no. 90/2022).

The new “De Minimis” from 2024

Following the approval by the European Commission of Regulation 2023/2831 dated December 13, 2023, the overall amount of de minimis aid granted by a Member State to a single company within a period of 3 years (the triennium is rolling) has been increased from 200 to 300 thousand euros as of January 1, 2024.

The ceiling of 300,000 euros, gross of any tax or other charge, applies regardless of:

  • the form of de minimis aid;
  • the objective pursued;
  • whether the aid granted by the Member State is funded entirely or partially with EU resources.

If the ceiling is exceeded, the new aid does not benefit from the more favorable provisions provided for by the Regulation.

In case of mergers or acquisitions, for the purpose of the ceiling, all aid previously granted to each of the participating companies in the merger must be considered, and aid granted before the merger or acquisition remains legitimate.

In the event of a split of a company into two or more distinct entities, however, the amount of aid granted before the split is assigned to the entity that received it (generally the one that accounts for the activities for which the aid was used), or if this is not possible, it is allocated proportionally based on the book value of the share capital of the new companies as of the effective date of the split.

De minimis aid granted under the new regulation cannot be cumulated with State aid granted for the same eligible costs or with State aid relating to the same risk financing measure if such cumulation exceeds the highest aid intensities or amounts established, for the specific circumstances of each case, in a category exemption regulation or in a decision of the Commission.

De minimis aid that is not granted for specific eligible costs or cannot be attributed to them can instead be cumulated with other State aid granted under a category exemption regulation or a decision adopted by the Commission.

Legal Interests from January 1, 2024

We inform our esteemed Clients that INAIL, through circular no. 2 of January 8, 2024, and INPS, through circular no. 5 of January 10, 2024, have announced the change in the legal interest rate, set by the Ministry of Economy and Finance with Decree dated November 29, 2023, at 2.5% per annum, effective from January 1, 2024.

This rate constitutes the maximum reduction measure for civil penalties provided for by article 116, paragraphs 15, 15-bis, 16, and 17, Law no. 388/2000.

Furthermore, the interest rate of 2.5% applies to pension benefits and end-of-service benefits paid from January 1, 2024.

INPS: Contributory exemption for working mothers – instructions

INPS, through circular no. 27 of January 31, 2024, provides instructions for managing the pension-related obligations, envisaged for pay periods from January 1, 2024, to December 31, 2026, related to the 100% exemption of the invalidity, old age, and survivor contributions payable by mothers of three or more children, with indefinite-term employment relationships, until the month in which the youngest child reaches the age of eighteen (article 1, paragraph 180, of Law no. 213 of December 30, 2023).

I would like to remind you that, pursuant to paragraph 181, article 1, of Law no. 213/2023, the same exemption is granted, on an experimental basis, for pay periods from January 1 to December 31, 2024, also to mothers of two children, with indefinite-term employment relationships, until the month the youngest child reaches the age of ten.

In more detail, a total reduction in the contribution payable by the working mother is recognized, up to an annual maximum of 3,000 euros (equivalent to 250 euros per month), in favor of:

  • mothers of three or more children, until the month the youngest child reaches the age of 18 (i.e., up to 17 years and 364 days) for pay periods from January 1, 2024, to December 31, 2026 (article 1, paragraph 180);
  • mothers of two children, until the month the youngest child reaches the age of 10 (i.e., 9 years and 364 days), on an experimental basis and limited to pay periods from January 1, 2024, to December 31, 2024 (article 1, paragraph 181).

The facilitation also applies to working mothers who, within their family unit, have adopted or fostered children.

Since it does not constitute an incentive for hiring, it is not subject to the general principles regarding employment incentives established by article 31 of Legislative Decree no. 150/2015, and the right to benefit from it does not depend on possession of the DURC (article 1, paragraph 1175, Law no. 296 of December 27, 2006) as it does not confer benefits to the employer.

Finally, since it does not constitute state aid, it is not subject to the authorization of the European Commission and registration in the National Register of State Aid.

Access to the exemption is available to all working mothers, employees of both public and private employers, including non-entrepreneurs, including those in the agricultural sector, excluding only domestic employment relationships.

INPS explains that the requirement of being the mother of two or three children is deemed satisfied at the time of the birth of the second child and the third child (or subsequent), and the verification of the requirement is crystallized on the date of the birth of the second child and the third child (or subsequent).

The exemption therefore continues to apply to the worker even in the event of the premature death of one or more children, the possible departure of one of the children from the family unit, the non-cohabitation of one of the children, or the exclusive custody by the father.

The exemption is granted from the establishment of the status of mother with two or three children. However, if the indefinite-term employment relationship is established subsequently, the exemption applies from the date of commencement of the indefinite-term employment relationship.

With reference to mothers of three or more children and, for the sole year 2024, to mothers of two children, the contribution exemption applies, in general, to indefinite-term employment relationships, established and to be established during the period of operation of the exemption, in both the public and private sectors, including the agricultural sector and excluding domestic employment relationships.

The Institute clarifies that the contributory facilitation also applies to:

  • apprenticeship relationships;
  • conversions into indefinite-term employment contracts from the month of transformation into indefinite-term employment;
  • employment relationships entered into in implementation of a close associative bond with a labor cooperative;
  • indefinite-term employment relationships for temporary staffing purposes.

The exemption involves a total reduction (by 100%), with the contribution rate for pension benefits remaining unchanged, of the contribution payable by the working mother, up to a maximum of 3,000 euros per year, i.e., 250 euros per month and 8.06 euros per day.

It should be noted that the maximum thresholds indicated also apply in the case of part-time employment relationships, for which, INPS points out, there is no need to adjust the amount of the exemption due.

A part-time worker holding multiple employment relationships may avail themselves of the exemption for each relationship.

For mothers of three or more children, the exemption ceases to apply on December 31, 2026, or in the month the youngest child reaches the age of eighteen, if this event occurs before the scheduled expiration date of December 31, 2026.

For mothers of two children, the exemption ceases to apply on December 31, 2024, or in the month the youngest child reaches the age of ten, if this event occurs before the scheduled expiration date of December 31, 2024.

The 100% contributory exemption for the contribution payable by the working mother, up to a maximum of 3,000 euros per year, to be adjusted on a monthly basis, is cumulative with exemptions regarding the contribution due from the employer.

With regard to other reductions in the worker’s contribution, the exemption is an alternative to the exemption on the portion of pension contributions for disability, old age, and survivors (IVS) payable by the worker (article 1, paragraph 15, 2024 Budget Law).

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