BUDGET LAW 2021 – THE PROVISIONS FOR WORK
Law no. 178 of December 30, 2020, the Budget Law for 2021, in force as of January 1, 2021, was published in Official Gazette no. 322/2020 – Ordinary Supplement no. 46.
It should be noted that, since it was impossible to intervene directly on the text of the Law, which would have entailed a new parliamentary passage, Law Decree 182/2020, published in Official Gazette no. 323/2020, corrected the text of article 1, paragraph 8, Law 178/2020, regarding the tax deduction provided for by article 2, Law Decree 3/2020, converted by Law 21/2020.
The main provisions are summarized below:
Article 1, paragraph 8
Additional deduction for employed and assimilated work
Following the amendment made by Decree Law 182/2020, the provision now provides that, in view of a structural review of the system of tax deductions, the additional deduction is due, for services rendered from January 1, 2021, in the following amounts:
- 960 euros, increased by the product of 240 euros and the amount corresponding to the ratio of 35,000 euros, less total income, to 7,000 euros, if the amount of total income is greater than 28,000 euros, but not 35,000 euros;
- 960 euros, if the total income is greater than 35,000 euros, but not 40,000 euros; the deduction is for the part corresponding to the ratio between the amount 40,000 euros, less the total income, and the amount 5,000 euros.
Article 1, paragraph 10-15
Contributory exemption for youth employment
For new open-ended hires and for the conversions of fixed-term contracts into open-ended contracts carried out in this period, the contribution exemption is recognized to the extent of 100% (until December 31, 2020 it was equal to 50%), for a maximum period of 36 months, up to a maximum amount equal to 6. 000 euros per year (until December 31, 2020 it was equal to 3,000 euros per year) with reference to persons who, on the date of the first incentivized hiring, are under 36 years of age (until December 31, 2020 the age limit was under 35 years).
The access condition provided for by article 1, paragraph 104, Law 205/2017 is modified for the two-year period 2021-2022: the exemption from contributions is granted to employers who have not, in the 6 months prior to hiring, nor will they, in the 9 months following the same, proceed with individual dismissals for objective reasons or collective dismissals, pursuant to Law 223/1991, with respect to workers with the same qualifications in the same production unit. In fact, the new paragraph 104 also incorporates the provision of paragraph 105 (which provided for a 6-month ban on dismissal), which was not amended by the Budget Law 2021.
Finally, paragraph 13 of the Budget Law 2021 provides that the new total exemption does not apply to contract continuations and hirings referred to in Article 1, paragraphs 106 and 108, Law 205/2017 (continuation with confirmation of apprenticeship and hiring of former students already received in alternating school work or with apprenticeship of 1st and 3rd level).
The benefit is granted pursuant to section 3.1 of the European Commission’s communication C(2020) 1863 final, dated March 19, 2020, (Temporary Framework COVID-19) and within the limits and conditions set out in the same communication. The effectiveness of the provisions of article 1, paragraphs 10-13, is subject, pursuant to article 108, paragraph 3, TFEU, to the authorization of the European Commission.
The other conditions provided for by Law 205/2017 remain confirmed and, in particular, that the worker has not been employed on an open-ended basis with the same or another employer, with the exception of any periods of apprenticeship carried out with another employer and not continued in an open-ended relationship, and the portability of the residual in the event of new open-ended recruitment.
Article 1, paragraph 11
Contribution exemption for youth employment in the South
The exemption from social security contributions for open-ended recruitment, provided for by paragraph 10, is recognized for a maximum period of 48 months to private employers who make recruitments in a headquarters or production unit located in the following regions: Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia.
Article 1, paragraphs 16-19
Contribution exemption for hiring women
For the hiring of women workers made in the two-year period 2021-2022, on an experimental basis, the contribution exemption referred to in Article 4, paragraphs 9-11, Law 92/2012, is recognized to the extent of 100% (previously it was 50%) within the maximum amount of 6,000 euros per year.
It also specifies that these hires must result in a net increase in employment calculated on the basis of the difference between the number of workers employed detected in each month and the number of workers employed on average in the previous 12 months. For employees with part-time contracts, the calculation is weighted on the basis of the ratio between the number of hours agreed upon and the number of hours that constitute the normal working hours of full-time workers. The increase in the employment base is considered net of decreases in the number of employees in subsidiary or associated companies, pursuant to article 2359 of the Italian Civil Code, or companies belonging, including through third parties, to the same party.
Finally, the benefit provided for by paragraphs 16-19 is granted pursuant to section 3.1 of the European Commission’s communication C(2020) 1863 final of March 19, 2020, and within the limits and under the conditions set out in the same communication. The effectiveness of the provisions of paragraphs 16 and 17 is subject, pursuant to article 108, paragraph 3, Tfue, to the authorization of the European Commission.
Article 1, paragraphs 23-24
Return to work of working mothers
In order to support the return to work of working mothers and to facilitate the reconciliation of work and family care times, the Fund pursuant to article 19, paragraph 1, Decree Law 223/2006, converted, with amendments, by Law 248/2006 (Family Policies Fund), for the year 2021 is increased by 50 million euros, to be allocated to the support and enhancement of organizational measures adopted by companies to facilitate the return to work of working mothers after childbirth.
The methods for allocating the resources will be defined by a Decree of the Minister for Equal Opportunities and the Family, in agreement with the Minister of the Economy and Finance.
Article 1, paragraphs 29-32
Contribution exemption Inpgi
For hirings carried out as from January 1, 2021, in order to guarantee full and effective equality of treatment for insured workers (Inpgi) with respect to other employees, the provisions of state legislation containing incentives to safeguard or increase employment granted to employers for the generality of economic sectors in the form of reductions in or exemptions from contributions are applied, unless otherwise provided for by law, to employees enrolled in the Inpgi Substitute Account, with reference to the contributions due for them.
Article 1, paragraph 33
Contribution exemption for agricultural entrepreneurs
The contribution exemption provided by article 1, paragraph 503, Law 160/2019, for direct cultivators and professional agricultural entrepreneurs referred to in article 1, Legislative Decree 99/2004, with an age of less than 40 years, for a maximum period of 24 months, equal to 100% of the contribution credit with the General Compulsory Insurance for Invalidity, Old Age and Survivors, is extended until December 31, 2021.
Article 1, paragraph 50
Brain return
Paragraph 50 allows to take advantage of the temporal extension of the favourable tax regime for the so-called impatriate workers also to subjects who transferred their residence to Italy before the year 2020 and who, as of December 31, 2019, are beneficiaries of the ordinary favourable regime provided for the so-called impatriate workers.
New paragraphs 2-bis, 2-ter and 2-quater have been added to article 5, Decree-Law 34/2019, according to which subjects, other than those indicated in paragraph 2 (subjects who as of April 30, 2019 have transferred their residence to Italy) who have been enrolled in the register of Italians residing abroad or who are citizens of European Union member states, who have already transferred their residence before the year 2020 and who, as of December 31, 2019, result as beneficiaries of the regime provided for by article 16, Decree. Lgs. 147/2015, may opt for the application of the provisions of paragraph 1, letter c), of this article, subject to the payment of:
(a) an amount equal to 10% of the income from employment and self-employment produced in Italy that is the subject of the relief referred to in Article 16, Legislative Decree. 147/2015, relating to the tax period prior to that in which the option is exercised, if the person at the time of exercising the option has at least one minor child, including in pre-adoptive foster care, or has become the owner of at least one residential real estate unit in Italy, subsequent to the transfer to Italy or in the 12 months preceding the transfer, or becomes the owner within 18 months from the date of exercising the option, under penalty of the return of the additional benefit enjoyed without the application of penalties. The real estate unit can be purchased directly by the worker or by the spouse, cohabiting partner or children, even in co-ownership;
- b) an amount equal to 5% of the income from employment and self-employment produced in Italy subject to the relief referred to in Article 16, Legislative Decree. 147/2015, relating to the tax period prior to that in which the option is exercised, if the person at the time of exercising the option has at least 3 minor children, including in pre-adoptive foster care, and becomes or has become the owner of at least one residential real estate unit in Italy, subsequent to the transfer to Italy or in the 12 months preceding the transfer, or becomes the owner within 18 months from the date of exercising the option, under penalty of the return of the additional benefit used without the application of penalties. The real estate unit may be purchased directly by the worker or by the spouse, cohabiting partner or children, even in co-ownership.
The procedures for exercising the option pursuant to paragraph 2-bis are defined by a provision of the Revenue Office, to be issued within 60 days of the date on which the provision comes into force.
Professional sportsmen are excluded from these provisions (Law 91/1981).
Article 1, paragraphs 161-169
Contribution exemption South ex D.L. 104/2020
The exemption from social security contributions pursuant to art. 27, paragraph 1, Decree Law no. 104/2020 is extended until December 31, 2029, modulated as follows:
- in an amount equal to 30% of the total social security contributions to be paid until December 31, 2025;
- in an amount equal to 20% of the total social security contributions to be paid for the years 2026 and 2027;
- 10% of the total social security contributions to be paid for the years 2028 and 2029.
The relief does not apply
a) to economic public entities;
- to autonomous institutes for social housing transformed into economic public bodies pursuant to regional legislation;
- to entities transformed into joint-stock companies, even if with entirely public capital, as a result of privatization procedures;
- the former public institutions of assistance and charity transformed into associations or foundations of private law, as lacking the requirements for the transformation into personal service companies (ASP), and entered in the Register of legal persons;
- special companies also constituted in consortia pursuant to articles 31 and 114, T.U. of the laws on the order of local authorities, as per Legislative Decree 267/2000;
- reclamation consortia;
- industrial consortia;
- moral entities;
- ecclesiastical bodies.
The facility is granted
– from January 1, 2021 to June 30, 2021 in compliance with the conditions set out in European Commission Communication C(2020) 1863 final of March 19, 2020, on a “Temporary framework for State aid measures to support the economy in the current COVID-19 emergency”;
– from July 1, 2021 to December 31, 2029 subject to the adoption of the authorization decision by the European Commission pursuant to Article 108(3) Tfue and in compliance with the conditions set out in the applicable State aid legislation.
Article 1, paragraph 278
Extraordinary wage integration treatment for companies in crisis
The income support treatment referred to in article 44, Decree Law 109/2018 is extended for the years 2021 and 2022, for a maximum overall period of authorization of the extraordinary salary integration treatment of 12 months and within the spending limit of 200 million euros for the year 2021 and 50 million euros for the year 2022.
Access to the shock absorber, subject to the prior agreement entered into at the governmental level at the Ministry of Labour and Social Policies, is recognized if the company has ceased or terminated its production activity and there are concrete prospects of transferring the activity with consequent reabsorption of employment, or where it is possible to implement interventions for the reindustrialization of the production site, as well as, alternatively, through specific active labour policy paths put in place by the Region concerned.
Article 1, paragraph 279
Renewals and extensions of fixed-term contracts without the obligation of a reason
Until March 31, 2021, fixed-term contracts (including temporary contracts) may be extended or renewed for a maximum period of 12 months (and within the overall limit of 24 months) and for a single time even in the absence of the conditions provided for in Article 19, paragraph 1, Legislative Decree 81/2015.
Article 1, paragraph 285
Extension of Cigs for company reorganization or crisis for companies with strategic economic importance also at regional level
The extraordinary wage integration intervention as per article 22-bis, Legislative Decree 148/2015, is extended for the years 2021 and 2022, within the limit of 130 million euros for the year 2021 and 100 million euros for the year 2022.
The shock absorber is provided for companies with strategic economic importance also at a regional level, which have significant employment issues with significant redundancies in the territorial context, subject to an agreement entered into in government at the Ministry of Labour and Social Policy with the presence of the Region concerned, or the Regions concerned in the case of companies with production units involved located in 2 or more Regions, up to a maximum limit of 12 months.
Article 1, paragraph 290
Cigs and mobility in derogation in areas of complex industrial crisis
In order to ensure the continuation of Cigs and mobility interventions on derogation in the areas of complex industrial crisis identified by the Regions for the year 2020 and not authorized for lack of financial coverage, a Fund for income support to workers in the areas of complex industrial crisis is established in the estimate of the Ministry of Labour and Social Policies with an endowment of 10 million euros for the year 2021. A decree by the Minister of Labour and Social Policies, in agreement with the Minister of the Economy and Finance, to be adopted within 30 days of the Budget Law coming into force, establishes the criteria and methods for distributing the resources of the aforementioned Fund among the Regions.
Article 1, paragraphs 299-302
COVID-19 wage supplements
Provision is made to extend COVID-19 wage subsidies for an additional 12 weeks from January 1, 2021.
Specifically, employers who suspend or reduce work activity due to events attributable to the COVID-19 epidemic emergency may apply for ordinary wage supplementation treatment, ordinary allowance and wage supplementation treatment in derogation, as provided for in articles 19 to 22-quinquies, Decree Law 18/2020, for a maximum duration of 12 weeks. The 12 weeks must be placed in the period between January 1, 2021 and March 31, 2021 for Cigo treatments, and in the period between January 1, 2021 and June 30, 2021 for ordinary and Cigd treatments. With reference to these periods, the aforementioned 12 weeks constitute the maximum duration that can be requested with COVID-19 reason. The periods of salary integration previously requested and authorized pursuant to Article 12, Law Decree 137/2020, converted, with amendments, by Law 176/2020, placed, even partially, in periods subsequent to January 1, 2021, are charged, where authorized, to the 12 weeks.
Applications for access must be forwarded to the Inps, under penalty of forfeiture, by the end of the month following that in which the period of suspension or reduction of work activity began. In the first phase of application, the expiry date is set by the end of February 2021.
In the event of direct payment of the benefits by the Inps, the employer is required to send the Institute all the data necessary for the payment or balance of the wage integration by the end of the month following the month in which the period of wage integration is placed, or, if later, within the term of 30 days from the adoption of the measure of concession. On first-time application, the terms indicated are postponed to the thirtieth day following the date on which the law comes into force, if later. Once the above terms have expired, payment of the service and the related charges remain the responsibility of the defaulting employer.
Article 1, paragraph 303
Alternative bilateral solidarity funds
Alternative bilateral solidarity funds, pursuant to article 27, Legislative Decree 148/2015 (e.g., Fsba), guarantee the disbursement of the ordinary allowance in the same manner as COVID-19 supplements, i.e., for a maximum duration of 12 weeks placed in the period between January 1, 2021 and June 30, 2021.
Article 1, paragraph 304
Cisoa COVID-19
The Cisoa treatment, as per article 19, paragraph 3-bis, Law Decree 18/2020, required for events related to the epidemiological emergency from COVID-19, is granted, as an exception to the limits of fruition referred to the individual worker and the number of working days to be carried out at the same company as per article 8, Law 457/1972, for a maximum duration of 90 days, in the period between January 1, 2021 and June 30, 2021. The application for Cisoa must be submitted, under penalty of forfeiture, by the end of the month following that in which the period of suspension of work began. The periods of integration previously requested and authorized pursuant to article 1, paragraph 8, Decree Law no. 104/2020, placed, even partially, in periods after December 31, 2020, are counted against the 90 days of the new provision. In the first phase of application, the expiry date is set by the end of February 2021. The periods of integration authorized pursuant to the aforementioned Decree Law no. 104/2020, and pursuant to article 1, paragraphs 299-314, Law no. 178/2020, are counted for the purposes of achieving the requirement of 181 days of actual work provided for by article 8, Law no. 457/1972.
Article 1, paragraph 305
Workers who benefit from COVID-19 wage subsidies
The COVID-19 wage subsidies referred to in the preceding paragraphs are also recognized in favor of workers hired after March 25, 2020 and, in any case, in force as of January 1, 2021.
Article 1, paragraphs 306-308
Exemption from the payment of social security contributions for companies that do not request redundancy payments
In order to reduce the use of social shock absorbers COVID-19, exceptionally, private employers (excluding the agricultural sector) that do not require the 12 weeks of salary integration treatments referred to in paragraph 300, without prejudice to the rate of computation of pension benefits, is recognized exemption from the payment of social security contributions borne by them under Article 3, D. L. 104/2020, for a further maximum period of 8 weeks, usable by March 31, 2021, within the limits of the hours of salary integration. L. 104/2020, for a further period of up to 8 weeks, usable by March 31, 2021, within the limits of the hours of wage supplementation already used in May and June 2020, apportioned and applied on a monthly basis. The exemption does not apply to premiums and contributions due to Inail.
Private employers who have requested exemption from the payment of social security contributions pursuant to article 12, Law Decree 137/2020, may waive the fraction of exemption requested and not used and, at the same time, apply for access to the wage integration treatments provided by the Budget Law 2021. This option may also be exercised for a fraction of the number of workers affected by the benefit.
In order for the benefit to become fully operational it is necessary to wait for authorization from the European Commission.
Article 1, paragraphs 309-311
Ban on dismissal
The ban on collective redundancies (articles 4, 5 and 24, Law 223/1991) is extended until March 31, 2021, except in cases where the staff concerned by the redundancy, who were already employed on the contract, are rehired following the takeover of a new contractor, or individual redundancies for objective reasons (article 3, Law 604/1966). The suspension of procedures pursuant to article 7, Law 604/1966, is also confirmed.
The exceptions provided for, in fact, coincide with what was previously provided for by Law Decree no. 104/2020: the prohibition does not apply in the case of dismissals motivated by the definitive cessation of the company’s activity, following the liquidation of the company, without the continuation, even partial, of the activity, in cases where during the liquidation there is no transfer of a group of assets or activities that may constitute a transfer of the company or a branch of it, pursuant to article 2112, Civil Code, or in the hypotheses of a company collective agreement, stipulated by the trade union organizations that are comparatively more representative at the national level, of an incentive to terminate the employment relationship, limited to workers who adhere to the aforementioned agreement; said workers are in any case granted the treatment referred to in Article 1, Decree Law 22/2015 (NASpI). Dismissals announced in the event of bankruptcy are also excluded from the prohibition, when the provisional exercise of the enterprise is not envisaged, or its termination is ordered. In the event that the provisional exercise is ordered for a specific branch of the company, dismissals concerning sectors not included in the same are excluded from the prohibition.
Article 1, paragraph 362
Birth allowance – bonus bebè
The allowance referred to in Article 1, paragraph 125, Law 190/2014, according to the discipline provided by Article 1, paragraph 340, Law 160/2019, is also recognized for each child born or adopted from January 1, 2021 to December 31, 2021.
Article 1, paragraphs 363-364
Paternity leave
For 2021 the compulsory paternity leave is extended to 10 days (in 2020 it was 7), which may also be taken on a non-continuous basis.
Moreover, it is provided that also for 2021 the father may abstain for an additional day (in agreement with the mother and in her place in relation to the period of compulsory abstention due to the latter).
It should be remembered that paragraph 25 also extends paternity leave to cases of perinatal death.
Article 1, paragraphs 481-483
Measures for the protection of the period of active surveillance of workers
The provisions of Article 26, paragraphs 2 and 2-bis, Decree Law 18/2020, apply during the period from January 1, 2021 to February 28, 2021.
These provisions provide as follows:
– “2. Until February 28, 2021 (before October 15, 2020) for public and private employees in possession of certification issued by the competent medical-legal bodies, attesting to a condition of risk resulting from immunodepression or the outcome of oncological diseases or the performance of related life-saving therapies, including workers in possession of the recognition of disability with connotation of seriousness pursuant to Article 3, paragraph 3, L. 104/1992, the period of absence from work is equated with hospitalisation and is prescribed by the competent health authorities, as well as by the primary care physician in charge of the patient, on the basis of the documented recognition of disability or the certifications of the competent medical-legal bodies referred to above, whose references are given, for verification of competence, in the same certificate. No responsibility, not even for accounting purposes, except in cases of malice, can be attributed to the primary care physician in the event that the recognition of the disabling condition depends on the wrongful act of a third party. It is forbidden to monetize unused leave due to absences from the service referred to in this paragraph”;
– “2-bis. Starting from October 16, 2020 and until February 28, 2021 (previously December 31, 2020), the frail workers referred to in paragraph 2 normally perform their work in agile mode, including through the assignment to a different task included in the same category or area of classification, as defined by the collective agreements in force, or the performance of specific professional training activities, including remotely”.
By way of derogation from current provisions, the charges borne by the employer, who submits the request to the social security body, and by INPS, connected with the above protections, are charged to the State within the maximum expenditure limit of 282.1 million euros for the year 2021. The Inps monitors the spending limit and, should this monitoring reveal that the spending limit has been reached, including prospectively, no further applications will be considered.
Article 1, paragraph 484
Certification of periods spent by private employees in quarantine or in conditions of mandatory home stay
From January 1, 2021, as a result of the amendments to article 26, paragraph 3, Decree Law 18/2020, the attending physician will draw up the certificate of illness without the details of the measure that gave rise to quarantine with active supervision or fiduciary home stay with active supervision, which previously had to be included instead.
Article 1, paragraph 1094
Suspension notification of payment folders
By amending Article 35, Decree-Law 109/2018, in the territories of the municipalities of Casamicciola Terme, Forio, Lacco Ameno of the island of Ischia affected by the seismic events that occurred on August 21, 2017, the terms for the notification of the payment files and for the collection of the amounts resulting from the acts referred to in Articles 29 and 30, D. L. 78/2010, as well as the executive activities by the collection agents and the terms of prescription and forfeiture relating to the activities of creditors, including those of local authorities, are suspended until December 31, 2021 and resume from January 1, 2022.
Article 1, paragraph 1127
Tax incentive for the return of brains
Article 2, paragraph 1, letter b), Law no. 238/2010, is interpreted in the sense that the physiological interruptions of the academic year do not preclude access to tax incentives for students who decide to return to Italy after having continuously carried out a study activity abroad.
LDP Payroll stay at your disposal for any further information.
Milan, 07/01/2021
Best regards,
LDP PAYROLL SRL-STP
Arianna De Carlo
Head of Payroll Department