On 10 and 11 April 2024 we will participate, as exhibitors, in the Global Summit Human Resources, the b2b event that brings together the human resources business community and HR digital transformation.
On 11 April, Andrea Di Nino will speak at the conference entitled: “Corporate welfare: opportunities to be seized by companies and workers”. During the speech, our Employment Consultant will delve into the sector regulations, essential to exploit the full potential of this area and avoid its risks.
Set out below is the full interview given by Davide Di Paola, Sales Manager at HR Capital, highlighting and examining the future challenges for the Payroll world and beyond.
What do you expect from this event?
We are excited to participate in GHRSummit24, a very important and national event dedicated to the HR world. It will be an opportunity to broaden knowledge related to human resources and exchange views and grow with leading market players. We will also be making our contribution, sharing our experience and know-how with all participants; HR Capital has been supporting companies in HR consulting and high-end HRO services for almost 40 years. Thanks to a multidisciplinary team, we offer comprehensive payroll and HR compliance management.
Why is it useful to outsource payroll, and what are the potential future challenges?
In the current economic context, increasingly oriented towards the optimisation of resources and process efficiency, with an eye also on risk management, the outsourced payroll services sector is experiencing exponential growth. According to recent research carried out by Research and Markets, within the next 7 years there will be a major expansion of the sector globally, from $25.3 billion in 2022 to $37.3 billion in 2030 (+47%). This boom is motivated by companies’ need to save time and costs, allowing them to focus on strategic areas. We present ourselves to the market not as a service provider, but as a strategic partner, capable of accompanying the company in this transformation process.
How do you plan to support companies in an increasingly technological and evolving context?
The payroll industry is constantly evolving and requires constant updating. To optimise personnel management, both from an administrative and organisational point of view, companies can adopt three key approaches: automation, reducing resources dedicated to repetitive and time-consuming activities, digitisation, through the transformation of paper processes into electronic workflows, and simplification, choosing more user-friendly platforms. Technology has always been part of our DNA: this is why we have created KenDL, a digital system for the so-called Knowledge Management, the hub that collects all our company’s know-how. For client support, we provide a web platform that allows the entire data management process to be carried out through the use of a single innovative, simple and straightforward tool.
Why should a #GHRSummit24 participant visit your stand?
Our approach is always proactive and aimed at anticipating the needs of the market with a wide and customisable range of services: this is why we guarantee a contact person and a dedicated team that supports the company in all human resources management activities.
At HR Capital we assist companies in the management and administration of personnel, including through collaborating with professionals registered in the Register of Employment Consultants. This is a strategic choice that we have always pursued, believing that the integrated approach and specialisation are an added value for our clients. With this in mind, we are pleased to have a well-established partnership with Studio De Luca & Partners, a leading law firm that deals exclusively with Employment Law, privacy compliance (GDPR) and corporate administrative liability (Italian Legislative Decree no. 231/01). There is a long-standing tradition of integrated collaboration with the Firm, which constitutes a real ‘one stop shop’ for all employment law and human resources management matters.
You can find all the information about the event at this link.
On 21 March 2024, HR capital participated in the ninth edition of the HR INNOVATION FORUM, the first exhibition in Italy of the main Product and Process Innovations for Talent Management.
A full day of in-depth analysis of the most important trends in the sector entirely dedicated to managers and HR professionals.
FOCUS
Many topics were addressed, including welfare, a theme explored by Andrea Di Nino in the article written for the forum, entitled: “Remote working and welfare: useful tools for well-being at work – handle with care”.
THE EDITORIAL
The historical events of recent years, starting with the pandemic, have greatly influenced the employment market. During the ‘great resignation’, the difficulties for companies in finding and retaining talent has gradually led HR operators to rethink the concept of work and remuneration, focusing in particular on the impact of work on private life, the work-life balance. Among the tools most widely used to improve the corporate climate and well-being at work, remote working and corporate welfare plans stand out.
Remote working, regulated under the Italian legal system by Italian Law no. 81/2017, has been widely used since the pandemic. It allows the organisation, planning and localisation of work in a ‘hybrid’ mode, i.e. alternating the presence in the office with remote performance by the worker.
The potential to work remotely is also increasingly a subject of negotiation in the recruitment of talent: in addition to the financial and contractual conditions of employment, in fact, more and more companies are offering remote working as an attractive benefit.
In any event, to permit remote working it is necessary to consider multiple obligations, provided for by the aforementioned legislation and relating to the regulation of the remote employment relationship itself, health and safety at work and the obligations to provide employment details to the authorities. The regime under which some derogations deriving from the COVID emergency legislation have been continually extended has not helped to give certainty to employers.
Correctly navigating these obligations is a challenge for many companies, which do not always possess the necessary tools, just as the approach to the topic of remote working is not always easy from a cultural point of view. Mistakenly, for example, remote working is often used interchangeably with ‘working from home’ or ‘teleworking’, whereas it differs from teleworking through the flexible alternation between working from the company’s premises and working remotely – not necessarily understood as the employee’s ‘home’.
An important and additional tool used by companies to improve the corporate climate, as well as attract and retain talent is the planning of a corporate welfare system.
Implementing a corporate welfare plan consists of ensuring the disbursement of a certain amount of remuneration in kind, in the form of goods and services, to its employees and, where permitted, their family members. The tax rules in force provide that – under certain conditions – the goods and services covered by corporate welfare can be exempt from taxes and contributions (both for the beneficiary workers and for the employer), even up to total exemption.
However, the attractiveness of this tool is partially undermined by factors such as the ‘hidden’ costs related to it (e.g. expert advice, the fees charged by platforms, etc.), the lack of interest on the part of staff or managers, trade union opposition and, above all, the objective complexity of the regulatory framework. Consequently, this tool is difficult to access, in particular, for micro and small enterprises, which make up the majority of the Italian entrepreneurial sector.
With regard to regulation, it should be noted that welfare can give rise to undesirable and unforeseen tax effects: for example, if fringe benefits exceed the tax exemption limit by even a single Euro, the entire value of the fringe benefits received by the employee in the year become taxable. The continuous changes and differentiations that the legislator has made in recent years to the exemption limit have not helped to clarify it, discouraging its use. For 2024, the limits have been set at EUR 1,000 for all workers, raised to EUR 2,000 for those with children who are dependent for tax purposes, but the measure lacks permanence as it is valid only for the current year.
Remote working and welfare plans, ultimately, are valid means to implement concrete policies based on well-being in the company; much could still be done, however, with respect to the cultural and regulatory approach to these tools.
Here is the link with all the information about the event.
Reverse brain drain: from 2024 the new “restricting” legislation on requirements, as explained to Adnkronos/Labitalia by Andrea Di Nino, employment consultant at HR Capital.
“Italian Legislative Decree no. 209/2023 made important changes to the regulations concerning the tax relief regime for “impatriated” workers as well as imposing restrictions on the operation of the regime. In particular, the new Decree’s provisions entirely replace the original regulations, introduced by Article 16, paragraph 1 of Italian Legislative Decree no. 147/2015”, he explains. The expert continues, “Among the various new provisions is that only 50% of income from employed and assimilated work and income from self-employment produced in Italy by workers who transfer their tax residence there contribute to total income, up to a maximum annual limit of EUR 600,000.
This tax relief may be applied for a maximum of five tax periods”.
Mr Di Nino further underlines that “Particular conditions have been introduced for the application of the favourable tax regime, namely that the tax payer must have had his/her tax residence abroad in the three tax periods preceding the transfer to Italy, he/she must undertake to maintain his/her tax residence in Italy for at least four tax periods following the transfer itself and to carry out his/her work activity mainly within Italy. A further important condition is that, in addition, the tax payer must meet the ‘high qualification or specialisation’ requirements, for which the law refers to Italian Legislative Decree no. 108/2012 and Italian Legislative Decree no. 206/2007”, he adds.
“The regime applies even if, following the transfer to Italy, the worker continues the employment relationship with the same foreign employer or within the same group of companies. In these circumstances, the minimum period of previous foreign tax residence is raised to six or seven tax periods”. “In detail, the minimum foreign tax residence must be: six tax periods, if the worker, before moving abroad, has not previously been employed in Italy for the same company or for a company belonging to the same group; seven tax periods, if the worker, before moving abroad, was employed in Italy for the same company or for a company belonging to the same group”, he concludes.
On 28 February 2024, Italian Law no.18 of 23 February 2024 was published in the Official Gazette no. 18, converting into law, with amendments, Italian Legislative Decree no. 215 of 30 December 2023 (so-called “Milleproroghe Decree”), containing urgent provisions regarding regulatory deadlines.
A significant innovation contained in the conversion law concerns fixed-term contracts: in particular Article 18, paragraph 4-bis of the Law in question extends from 30 April 2024 to 31 December 2024 the employer’s and worker’s ability to identify the technical, organisational or production needs necessary to exceed the overall 12 months of duration of the employment relationship.
In addition, the right of so-called “vulnerable” workers to work remotely is extended from 31 March 2024 to 30 June 2024, including through assignment to a different task included in the same category or classification area. This extension also applies to parents employed in the private sector who have at least one child under the age of 14, provided that in the family unit there is no other parent benefiting from income support tools in the event of suspension or termination of the work activity or that there is no non-working parent, and on the further condition that remote working is compatible with the work to be provided.
Il 27 febbraio Vittorio De Luca e Andrea Di Nino hanno partecipato al workshop organizzato da ELITE “Le risorse che fanno l’impresa: il legame tra qualità organizzativa e il raggiungimento degli obiettivi strategici”.
09:00 Registrazione dei partecipanti e welcome coffee
09:30 Apertura dei lavori
09:45 Employee Value Proposition come chiave per motivare e coinvolgere i talenti
10:30 Corporate Wellbeing Strategy: le dimensioni chiave per creare cultura del benessere in azienda, assicurandosi allineamento con gli obiettivi strategici A cura di De Luca & Partners
11:15 Pausa caffè
11:30 Il valore dei programmi benefit per la talent retention
12:00 Biase consapevolezza: verso la leadership inclusiva
12:45 Pausa pranzo
14:00 Incorporare le misure DE&I nelle strategie aziendali, creando obiettivi misurabili
14:45 Inclusion (e non diversity) management: la valorizzazione di tutte le diversità. Vivere la DE&I dentro e fuori l’azienda – un’intervista
15:45 Chiusura dei lavori
The international mobility of workers within Europe is regulated by EU regulations no. 883/2004 and 987/2009. Outside the scope of application of these regulations, bilateral social security agreements entered into by Italy with other States, if any, apply.
These agreements regulate important aspects of the international mobility of workers from the point of view of social security legislation, such as the payment of social security contributions and the social security and welfare benefits to which workers themselves are entitled.
In the absence of a bilateral agreement of this type, the worker abroad remains exposed to the double payment of contributions – with the related impact also on his/her Italian employer, if any – as well as to uncertainty about the social security and welfare benefits obtainable in the foreign country and to the impossibility of claiming periods of work abroad for pension purposes in Italy.
In terms of bilateral agreements on social security, 2024 has already brought substantial changes with respect to countries that have significant economic relations with Italy, namely Albania and Japan.
The Social Security Agreement between Italy and Albania
On 6 February 2024, the Social Security Agreement between Italy and Albania was signed, which will regulate pension benefits and unemployment, sickness and maternity benefits for those who have been employed or self-employed in the two countries.
Following the signing of this agreement, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) together with the Ministry of Labour and Social Policy will start negotiations to conclude a bilateral administrative agreement, to implement the agreement that has been reached.
The agreement does not cover health, occupational disease and accident benefits nor non-contributory benefits.
In a press release the governments of the two countries also expressed their willingness to strengthen cooperation in the economic field and to protect social security for their citizens.
The Social Security Agreement between Italy and Japan
In a statement published on 16 January 2024, the Italian Ministry of Labour and Social Policy shared the news that from 1 April 2024 the Social Security Agreement between Italy and Japan, signed on 6 February 2009 and ratified by Italian Law no. 97/2015, will come into force.
The main change that will be brought about by the entry into force of this agreement is that it will allow the workers of the two posting States to avoid the burden of double contributions for a maximum period of five years. In particular, Article 7 of Annex 1 of Italian Law no. 97/2015, which regulates international postings, establishes that “if a person subject to the legislation of a contracting State, who works in the contracting State for an employer established in that State, is sent by that employer from that State to work in another contracting State, then such person is subject only to the legislation of the first contracting State as if he or she were employed in the first contracting State, provided that the period of posting does not exceed five years”.
The agreement also regulates the right to the portability of pension benefits for nationals of the two States and their family members, the principle of equal treatment and the principle of lex loci laboris (i.e. a person employed in a contracting State is subject to the legislation of that State), by providing for the relevant derogations.
At the time of the signing of the agreement, Japan was the only G8 and G20 country with which Italy had not yet finalised the position on social legislation and applicable legislation.
With circular no. 2/E/2024, the Italian Revenue Agency clarified the implementation of Italian Legislative Decree of 30 December 2023, no. 216, i.e. the decree implementing the first phase of Italian personal income tax (imposte sul reddito delle persone fisiche, ‘IRPEF’) reform and other measures on income taxes.
Reform of the tax brackets
The Legislative Decree in question implements certain principles and directive criteria of Italian Law of 9 August 2023, no. 111, entitled “Delegation to the Government for tax reform”.
Article 1, paragraph 1 of the decree introduces significant changes in the field of personal income tax and, for the 2024 tax period only, applies new rates and income brackets for determining gross tax.
With respect to the framework contained in Article 11, paragraph 1, of Italian Presidential Decree no. 917/1986 (the Italian Income Tax Consolidation Act – Testo unico delle imposte sui redditi, ‘TUIR’), there is therefore a reduction from four to three income brackets and the corresponding rates; in particular, for 2024, the gross tax is calculated by applying the following rates:
Tax deductions and allowance
Moreover, for the year 2024, the deduction provided for by Article 13, paragraph 1, letter a) of TUIR has been raised from EUR 1,880 to EUR 1,955 for the recipients of employment income with the exclusion of pensions and/or similar allowances – referred to in Article 49, paragraph 1, of the TUIR – and certain assimilated income if its total value does not exceed EUR 15,000.
This provision, set out in paragraph 2 of the same Article 1, therefore increases the amount of income excluded from taxation (the “no tax area”) to EUR 8,500 for recipients of employment and assimilated income, bringing it into line with the provisions already in force for pensioners.
In this regard, the Italian Revenue Agency clarified that the amendment concerns only the first sentence of Article 13, paragraph 1, letter a) of the TUIR, and therefore the other provisions governed by the same article remains unaffected.
Article 1, paragraph 3, of the Decree amends, for the 2024 tax year, the prerequisite for the granting of allowance under Article 1, paragraph 1, of Italian Decree-Law no. 3/2020. It is provided that, for taxpayers with a total income of no more than EUR 15,000, the relief is granted on the condition that the gross tax is higher than any deduction due minus EUR 75 in relation to the period of work in the year.
Important changes have also been introduced for taxpayers with a total income of more than EUR 50,000, with respect to which Article 2 of the Decree provides for the reduction of EUR 260 in the amount of the deduction from the gross tax due for the year 2024.
On 1 January 2024 important changes were introduced to the relationship between Italy and Switzerland relating to the tax legislation applicable to cross-border workers, and to the guidelines relating to remote working.
Historically, cross-border work between Italy and Switzerland has been regulated by the Agreement signed in Rome in 1974 (‘1974 Rome Agreement’)and, also, by the Convention against double taxation of 1976 (the ‘1976 Convention’), still in force between the two countries.
These agreements establish that the wages, salaries and other elements forming part of the remuneration that a cross-border worker receives as consideration for an employed activity are taxable only in the State in which such activity is carried out. For these purposes cross-border worker is generally understood as an employed or self-employed worker who carries out his or her activity in a State other than the one in which he or she resides, and who returns to the State of residence, in principle, daily or at least once a week.
However, technological development and, above all, the Covid emergency have changed the traditional scenarios, requiring both Italy and Switzerland to deal with widespread remote work which, unlike in the past, it is no longer necessarily carried out at the company premises and, in as far as is relevant for these purposes, no longer involves daily cross-border travel.
On 1 January 2024, following the entry into force of Italian Law no. 83/2023 implementing the agreement of 23 December 2020, important changes were introduced to the relationship between Italy and Switzerland relating to the tax legislation applicable to cross-border workers, and to the guidelines relating to remote working as well.
The new tax measures applicable to cross-border workers
With the entry into force of Italian Law no. 83/2023, the process of reviewing the agreements between Italy and Switzerland concerning the cross-border work regime, started by the aforementioned protocol of 23 December 2020, was concluded. The new agreement, formalised by the aforementioned law, amends the 1974 Rome Agreement and the 1976 Convention to reflect the new terms reached between the two countries.
The new provisions agreed between Italy and Switzerland – which entered into force on 17 July 2023, but took effect from 1 January 2024 – concern the definition of cross-border work and the tax regime applicable to the work income earned by the persons concerned. The two countries have agreed that the agreement provisions are subject to review on a five-yearly basis.
In detail, the definition of cross-border worker has been revised by the new agreement and covers any worker resident in a contracting state who is domiciled for tax purposes in a municipality which is totally or partially in the 20 km area from the border with the other contracting State. The border areas covered by the agreement are, for Switzerland, the cantons of Grisons, Ticino and Valais, and, for Italy, the Lombardy, Piedmont and Valle d’Aosta regions and the autonomous province of Bolzano.
To be considered a cross-border worker, the worker must work in the above-mentioned border areas of the other State and return, in principle, to his or her main domicile in the State of residence on a daily basis. The worker retains this statusif he or she does not return to his or her home, for professional reasons, for a maximum of 45 days in a calendar year, excluding holidays and sick days.
For tax purposes, the new agreement provides a distinction between “old” and “new” cross-border workers. A worker is an “old” cross border worker if he or she was a cross-border worker on 17 July 2023 or carried out work in the border area in the period between 31 December 2018 and 17 July 2023. The rules of the previous version of the agreement, which provide for exclusive taxation in the country in which the work is carried out if the worker resides within 20 km of the border between the two States, continue to apply to “old” cross-border workers.
With respect to “new” cross-border workers (i.e. workers who are classified as cross-border workers starting from 17 July 2023), the shared taxation criterion applies.
Therefore, the State where the work is carried out will deduct withholding tax on the income earned by the individual, up to a maximum of 80% of the amount due based on the provisions on personal income taxes, including local taxes.
The worker’s State of residence will also subject the same income to taxation, guaranteeing the elimination of double taxation according to the rules established by the tax convention in force between the two countries (specifically, recognising a credit equal to the taxes paid in the State where the work is carried out or guaranteeing an exemption with respect to the income subject thereto).
Changes relating to remote working
As a result of the provisions which came into force on 1 January 2024, cross-border workers between Italy and Switzerland may carry out their work remotely at their home and up to the threshold of 25% of the working hours, without this having any impact on the relevant tax regime.
Read the full version in Norme e Tributi Plus Diritto of Il Sole 24 Ore.
On 31 January 2024, with circular no. 27/2024, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided guidelines and instructions relating to the use of the exemption of 100% of the share of social security contributions payable by working mothers for the pay periods from 1 January 2024 to 31 December 2026, up to a maximum limit of EUR 3,000 per year, to be allocated pro rata on a monthly basis, introduced by the 2024 Italian Budget Law.
The exemption is granted to working mothers of three or more children – employed on a permanent contract – up to the month of the youngest child’s eighteenth birthday.
To access the exemption in question, the circular specifies that female workers must send their employer a declaration containing the number of children and their tax codes. Alternatively, INPS provides a special application form that the worker can fill in and send directly to it.
The contribution exemption also applies to working mothers of two children, up to the month of the youngest child’s tenth birthday, limited to pay periods from 1 January 2024 to 31 December 2024.
Finally, the circular specifies that the mother is eligible for the exemption at the time of the birth of the third child (or, only for 2024, of the second). Moreover, if one of the children leaves the family unit or does not live with the mother or is in the sole custody of the father, there is no forfeiture of the right to benefit from the contribution reduction in question.
At our last Team Meeting, among other topics, we explored the complex issue of tax and social security treatment applicable to shares granted to employees and the quantification of their value for the purposes of calculating employment income.
If you want to learn more about this topic, request our slides here.
HR Capital has always worked with the aim of offering a workplace where people can develop their talent: we believe in the sharing of skills and constant training, fundamental drivers for the employees’ growth.
For this reason, we decided to participate in the 2023 survey by Great Place to Work® Institute Italia to assess our Company business environment and obtain the Great Place to Work® certification.
We are proud of this certification which provides further confirmation of the path taken in promoting the well-being of our workplace and in the constant development of our people.
Here are some of the reasons why HR Capital is a Great Place To Work®, in the words of our employees:
“Great attention is paid to both the needs and growth of individuals and the continuous improvement of processes. In addition, every idea or initiative can be discussed, shared and implemented”.
“We work as a team, for real, not just on paper. This value is always defended by our manager, regardless of the situation. It’s something that comes first here and means that there is always a great atmosphere among colleagues”.
Click here to visit our firm’s profile on the Great Place to Work website.
On 30 December 2023, Italian Law no. 213/2023, entitled “State budget for the financial year 2024 and multi-year budget for the three-year period 2024-2026” (so-called “2024 Budget Law”), approved by the Council of Ministers on 16 October 2023 and by Parliament on 29 December 2023 was published in the Italian Official Gazette.
Cutting the “tax wedge”
Among the main innovations in the employment field is the extension for 2024 of the cut in the “tax wedge” (“cuneo fiscale”) already introduced by Italian Decree-Law no. 48/2023 (the so-called “Employment Decree”). Therefore, the reduction of the partial contribution exemption of the old-age/survivor’s pension (indennità vecchiaia e superstiti, ‘IVS’) rate for employees in the public and private sectors, with the exception of domestic workers, is confirmed. Specifically, this reduction is 6% if a worker’s monthly social security taxable amount is less than EUR 2,692, or 7% for a social security taxable amount less than EUR 1,923.
For 2024, however, this measure will not apply to the thirteenth month’s salary, consequently the additional monthly payment relating to 2023 will have an exemption rate of 2% while that relating to 2024 will be subject to the ordinary contribution rate.
Fringe benefits exemption
The 2024 Budget Law also provided for the raising of the exemption limit for fringe benefits, derogating from the provisions of Article 51, paragraph 3, of the Italian Income Tax Consolidation Act (Italian Presidential Decree No 917/1986, Testo unico delle imposte sui redditi, ‘TUIR’). The provision sets out that, under the conditions set out therein, fringe benefits are excluded from the calculation of employment income and, moreover, remain excluded from the payment of employer contributions. The tax and social security exemption applies to fringe benefits as long as they have an overall value of less than EUR 258.23 in the tax period in which they were received. If this threshold is exceeded, then the entire value of the sums received must be considered fully taxable.
The aforementioned Employment Decree had provided, for 2023 only and only for workers with dependent children for tax purposes, for an increase in this exemption limit to EUR 3,000, which remained unchanged for all other workers.
In this regard, Article 1, paragraph 16, of the 2024 Budget Law established that, limited to the 2024 tax period, and within the overall limit of EUR 1,000, the value of the goods sold and services provided, as well as the sums paid or reimbursed to the same workers by employers for the payment of domestic water utilities, electricity and natural gas, the costs of renting the first home or interest on the mortgage relating to the first home, do not contribute to the calculation of income.
This limit is raised to EUR 2,000 for workers with dependent children, including recognised children born out of wedlock, adopted or foster children. In this regard, in line with what is already required in 2023, in order to benefit from the increase in the exemption limit, it will be necessary for the worker to provide the employer with a specific self-certification relating to the dependent children for tax purposes.
Parental leave allowance
The 2024 Budget Law changes the allowance due during the period of parental leave (so-called “optional”). In particular, in addition to the increase of up to 80% of the allowance for the first month used, introduced by the 2023 Budget Law, there is also an increase to 60% of the allowance for the second month of parental leave.
The legislation also specifies that, for 2024 only, this allowance is raised to 80% also for the second month, it being understood that the allowance for the following months remains 30% of salary.
To benefit from the increase described above, the original conditions remain valid, i.e. (i) the parental leave must be used during the first six year of the child’s life (or entry into the family) and (ii) the mandatory leave must end after 31 December 2023.
Reduction of contributions for working mothers
Finally, the Budget Law introduces, limited to 2024-2026, for female permanent employees with three or more children, a 100% reduction in IVS contributions up to when the youngest child is 18 (within the annual limit of EUR 3,000 apportioned on a monthly basis).
For 2024, that provision is extended, on an experimental basis, to working mothers of two children, until the youngest child is 10. The exemptions do not apply to domestic work relationships.
The Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’), with note no. 2401/2023, provided clarification on the retention of documents relating to transnational postings to simplify the administrative burdens on service providers who intend to post their staff to EU countries other than their country of origin.
Reference legislation
Transnational posting is governed by Italian Legislative Decree no. 136/2016, implementing Directive 2014/67/EU, and refers to cases where a company based in an EU Member State or in a non-EU State posts one or more workers to another Member State to another company.
A posted worker is therefore a person who, although he or she appears to be habitually employed in one Member State, carries out his or her work in another State for a limited period.
The legislation provides that, for the entire duration of the posting, the existing employment relationship between the posted worker and the posting company continues to exist. The work carried out in the other State is of limited duration and is carried out in the interest and on behalf of the posting company, which continues to be subject to the standard employer obligations (e.g. responsibilities in terms of recruitment, relationship management, salary and social security obligations, as well as disciplinary and dismissal powers).
Article 10 of Italian Legislative Decree no. 136/2016 provides for the obligation, on the part of posting employers, to communicate the posting in advance by means of the appropriate “UNI_Distacco_UE” form.
Paragraph 3 of the same article also contains two additional administrative burdens: first of all, the posting company must designate a contact person with address for service in Italy in charge of sending and receiving deeds and documents on its behalf. Otherwise, the registered office of the posting company will be considered as the place where the recipient of the provision of services has its registered office or resides.
The second burden requires that during the period of posting and up to two years from its termination, the employer must keep and prepare a copy in Italian of the employment contract or other document containing information on the employment relationship, pay slips, slips indicating the start, the end and duration of the daily working time, documentation proving the payment of wages or equivalent documents, the public notice of the establishment of the employment relationship or equivalent documentation and the certificate relating to the applicable social security legislation (“PD A1”).
With regard to this last aspect, the Labour Inspectorate clarified, with the note under discussion, that the foreign company that posts workers to Italy fulfils the obligation to keep the work documentation by simply showing it to the supervisory bodies if requested: without the need, therefore, to keep such documentation for the entire period of posting (as appears to be required by the legislative provision).
However, it should be clarified that it remains necessary to allow the inspection staff immediate access to check the correct establishment of the employment relationship which, as indicated in National Labour Inspectorate circular no. 1/2023, can be demonstrated through a certificate of the request for the posting document to the Social Security Authority of the Member State of origin made by the posting company.
In addition, the note clarified that the contact person designated by the posting company, in order to interact with the competent authorities, does not necessarily have to be physically present in Italy: an address for service in Italy will be sufficient together with reference contact details for service of documents or specific communications if necessary.
Among the most important changes governed by Italian Legislative Decree no. 216/2023, which came into force on 1 January 2024, is a revision of the main income tax, IRPEF (imposta sul reddito delle persone fisiche). For 2024, in fact, three tax brackets are expected to be applied, replacing the four in force until 2023. In this regard, Article 1 of the decree, entitled “Revision of the personal income tax regulation”, provides for the application of a rate of 23% for income up to EUR 28,000, 35% for income between EUR 28,000 and EUR 50,000 and 43% for income of EUR 50,000 and over. In essence, the second IRPEF bracket of 25%, which applied to incomes between EUR 15,000 and EUR 28,000, has been abolished.Article 1, paragraph 2, also provides that, for 2024 only, the tax-free amount for employed taxpayers whose income is less than EUR 15,000 is raised to EUR 1,955, compared to the previous EUR 1,880. With regard to corporate taxation, relief has been introduced for new recruitment: specifically, the cost of newly hired personnel with a permanent employment contract is increased, for the purposes of determining business income, by an amount equal to 20% of the cost attributable to the increase in employment. This relief is only available to entities that have carried out their activities for at least 365 days in the tax period in progress as of 31 December 2023. Companies and entities in ordinary liquidation, subject to judicial liquidation or other liquidation procedures related to the business crisis are not eligible for this relief. Finally, the decree specifies that employment increases are relevant provided that the number of permanent employees at the end of the tax period following the one in progress as of 31 December 2023 is higher than the number of permanent employees employed on average in the previous tax period.
On 16 October 2023, the Italian Council of Ministers approved Italian Legislative Decree no. 152/2023, which implements EU Directive 2021/1883 on the conditions of entry and residence of third-country nationals (or stateless persons) for the purpose of highly qualified employment. The Decree, published in the Italian Official Gazette on 2 November 2023, amends Article 27 quater of Italian Legislative Decree no. 286/1998 (the so-called “Consolidated Immigration Law”), introducing important changes on the entry and residence of highly qualified foreign citizens.
In particular, the Decree:
In message no. 4178 of 24 November 2023, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided some clarification on when the contribution benefit for the recruitment of young people “Under 30”, introduced by Italian Law no. 205/2017 (2018 Budget Law), and “Under 36”, introduced on an experimental basis for 2021-2022 by Italian Law no. 178/2020 (2021 Budget Law), extended also for 2023 by Italian Law no. 197/2022 (2023 Budget Law) does not apply.
INPS recalled that the exemption applies to the recruitment and conversion of fixed-term contracts to permanent contracts for individuals who, on the date of the first subsidised employment, are under 30 or under 36, and have not been employed on a permanent contract with the same or with another employer.
In this message INPS has reiterated the clarification it has provided in its previous circulars on this contribution incentive (most recently circular no. 57/ 2023, relating to the exemption for youth employment referred to in the 2023 Budget Law). INPS has also recalled the provisions for the three-year exemption, set out by Italian Law no. 190/2014, included in the Italian Ministry of Labour and Social Policies’ Ruling no. 2/2016, which clarified that the above-mentioned contribution exemptions provided for the hiring of young people “Under 30” and “Under 36”, do not apply “if, following an inspection, a self-employment relationship, with or without a VAT number, or a para-subordinate relationship is reclassified as a permanent subordinate employment relationship”.
In fact, as set out in the above-mentioned Ministry of Labour and Social Policies Ruling no. 2/2016, it is not possible to benefit from contribution relief if the permanent employment relationship has been established not voluntarily by the employer but following an inspection.
The ministerial ruling is specifically intended to incentivise the voluntary recruitment of personnel by rewarding those employers that contribute to increased and stable employment with the exemption, consequently excluding employers that, conversely, break the law.
Therefore, with the message in question, the INPS has again clarified that the contribution in question must be returned if the employer who has benefited from it has been subject to an inspection following which the “subsidised” employment relationship has resulted from a previous reclassified employment relationship.
The position is not the same for an employer that benefits from contributions relief provided for the recruitment of young persons and that is different from the employer under the reclassified employment relationship. In this case, the employer is lawfully entitled to the contributions exemption since it can be presumed that the subsidised recruitment was in good faith, taking into account that at the time of the establishment of the employment relationship the employer was not aware of the previous reclassification of the relationship.
The right of employees who are parents with children under 14 and of “vulnerable” employees to work remotely is soon to be extended. The Senate Budget Committee has approved an amendment to the bill to convert Italian Decree-Law No. 145/2023, which extends this right to 31 March 2024.
As is well known, remote working was introduced by Italian Law No. 81/2017 and is defined by Article 18 as “a different way of performing the employment relationship characterised by the absence of specific time or place constraints”. The work is performed partly inside the company premises and partly outside without a fixed location, within the limits of the maximum daily and weekly working hours.
The ordinary legislative framework for remote working requires that the worker can work remotely provided that both parties agree by means of a written agreement.
This legislation, however, does not establish any obligation on the employer to guarantee the employee the opportunity to carry out their work remotely. In this regard, Italian Law no. 197/2022 (also known as the “2023 Budget Law”) as subsequently amended, provided that for so-called “vulnerable workers” the employer must ensure, until 31 December 2023, the possibility of performing work remotely without the need to sign the related agreement and provided, however, that remote working is compatible with the work performed.
A worker is defined as “vulnerable” on the basis of an assessment by an occupational doctor. They are considered to be “vulnerable” as they are more exposed to the risk of infection by the SARS-CoV-2 virus, due to their age or risks deriving from immunodepression, from oncological diseases or from undergoing lifesaving treatment or in any case from comorbidities that may give rise to greater risk, as ascertained by the occupational doctor.
The same right was then also extended to so-called “super vulnerable” workers, as defined by Italian Ministerial Decree of 4 February 2022, and also to workers with children under 14 years of age.
It should be clarified that employers are required to ensure that “super vulnerable” workers work remotely, even if this means assigning them to tasks other than those of the same category or area of classification without any change to pay.
In conclusion, the right to work remotely, although arising under different legal provisions, concerns the following categories:
In relation to the most recent extension, although the amendment only refers to workers with children under 14, the effect of the extension of the deadline, as formulated, should also apply to vulnerable workers as certified by the occupational doctor. In fact, the provision that has been extended (namely Article 90, paragraph 1, of Italian Decree-Law no. 34/2020) refers to both categories.
The conditions to which this right is subject remain unchanged:
Finally, it should be noted that, at the date of writing “super vulnerable” workers remain excluded from the extension. For this category of people, in fact, the amendment that provided for the extension of the right to work remotely until 30 June 2024 was not approved.
However, it is still possible that the provision will also be extended for this category of workers. Moreover, these workers already have reinforced protection (compared to working parents and the “vulnerable”): they can ask for and obtain the right to work remotely, including through the assignment to other tasks included in the same category or area of classification, without any reduction in pay. In contrast, for other categories, the right is conditional on the work being provided being compatible with remote working. In any event, the mandatory communication of agile work on the ClicLavoro ministerial portal is due within ordinary deadlines, i.e., within five days from the start of working remotely.
The Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’), with circular no. 88/2023, provided guidance for the management of social security obligations related to the new regulations concerning amateur and professional workers in the sports sector, which came into effect on 1 July 2023.
Italian Legislative Decree of 28 February 2021, no. 36, as amended by Italian Legislative Decree of 5 October 2022, no. 163, and by the Italian Decree-Law of 29 December 2022, no. 198 (the so-called “Milleproroghe Decree”), and most recently amended by Italian Legislative Decree of 29 August 2023, no. 120, (also called “Corrective bis”), implemented Italian Law of 8 August 2019, no. 86, containing “Delegations to the Government and other provisions on sports law, sports professions and simplification”.
The main guiding criteria listed in the enacting law include:
The INPS, therefore, in its circular summarised the main contents of the enabling law for the reform of sport, paying particular attention to the definition of sports workers and the contribution regime applied to each category of them.
With this reform of work in the sports sector, the social security and contribution regimes to be applied to the sports employment relationship have been set out, which depend mainly on the type of contract with which the same employment relationship is regulated, whether they are professional and amateur employees, self-employed, professional coordinated and continuous collaborations, or self-employed, amateur coordinated and continuous collaborations and administrative-management coordinated and continuous collaborations.
One of the key objectives of the reform of employment law in the sports sector, therefore, concerned the elimination of the existing gap between the protections provided for “professional” sports workers compared to those provided for workers belonging to the amateur sector. For this purpose, in fact, specific protections have been granted to the latter in terms of social security, welfare and insurance.
The circular specified that, in addition, under Article 35, paragraph 1, of Italian Legislative Decree no. 36/2021, the following categories of workers must be enrolled in the Sports Workers’ Pension Fund (Fondo Pensione dei Lavoratori Sportivi or “FPSP”) (i.e. the “old” Professional Sports Pension Fund):
Therefore, because of this provision, from 1 July 2023 the regulations on social security matters referred to in Italian Legislative Decree of 30 April 1997, no. 166, which already apply to the professional sector, are extended to workers in the amateur sector and enrolled in the FPSP. In this case, the contributions will be due based on the actual salary received and in compliance with the minimum contribution and the INPS ceiling if applicable.
It is also provided that the same protections in the field of (i) financial sickness insurance and (ii) financial maternity insurance apply to employees in the sports sector enrolled in the Pension Fund, regardless of their professional qualification.
As for the remaining group of sports workers, i.e., coordinated and self-employed collaborators in the amateur sector, as of 1 July 2023, it is envisaged that the principals will be obliged to contribute to the separate INPS national insurance and pension scheme and will therefore also have to provide the consequent individual Uniemens reports, according to codes and methods established by the same circular.
Lastly, it should be noted that regarding coordinated and continuous collaborators, the ordinary allocation of the contribution burden applies, i.e., 2/3 borne by the principal and 1/3 borne by the collaborator.
In contrast, for self-employed workers, it is possible to charge 4% to the same principal.
The Italian Council of Ministers has published in the Italian Official Gazette no. 256 of 2 November 2023, Italian Legislative Decree no. 152 of 18 October 2023, which implements Directive (EU) 2021/1883 of the European Parliament and of the Council of 20 October 2021, relating to the new conditions of entry and residence of citizens of third-country nationals for the purpose of highly qualified employment and obtain the issue of the EU Blue Card.
With Italian Legislative Decree no. 152/2023, the Italian Council of Ministers has made changes to Article 27-quater of Italian Legislative Decree no. 286/1998, “Consolidated law regulating immigration and rules on the status of foreign nationals”, the so-called Consolidated Immigration Law.
Italian Legislative Decree no. 152/2023 redefines the requirements which the worker must meet to be considered highly qualified and obtain the release of the EU Blue Card: he or she must, alternatively:
The changes introduced regarding the documentation that the employer must produce when submitting the application for authorisation, under penalty of its rejection, are of particular interest. It is no longer necessary for the offer of an employment contract, or the binding job offer for the performance of a work activity that requires the possession of a higher professional qualification to last at least one year, but it is sufficient that it be biannual.
On the other hand, the documents that must be produced by the employer when submitting the authorisation request are reiterated, namely the educational qualification, the higher professional qualification or the requirements under Italian Legislative Decree No. 206/2007 related to regulated professions, the amount of annual salary that cannot be less than that provided for in the applicable national collective bargaining agreement (contratto collettivo nazionale di lavoro – CCNL) based on the level of classification envisaged for the recruitment of the highly qualified worker.
The procedure for an application for an EU Blue Card by a third country national, who already holds another residence permit issued to carry out a highly qualified job is further simplified: in these cases, it will no longer be necessary for the employer to produce the above documentation, since it has already been checked when issuing the previously issued residence permit.
In addition, again with the aim of simplifying and facilitating the recruitment of highly qualified foreign nationals, it has been provided that the employer is no longer required to check with the Job Centre the availability of a worker already in Italy and, while waiting for the residence permit to be issued by the Police Headquarters (Questura) (normally within 30 days of the request), the foreign national will still be able to work.
Finally, the period during which the EU Blue Card worker must perform only the highly skilled activity for which his or her entry into Italy was requested is reduced from two years to 12 months.
The reasons that justify the refusal to issue a residence permit for the performance of highly qualified work – the EU Blue Card – or, if it has been granted, its revocation, include, in the alternative, when the foreign national no longer:
or
or
The new provisions introduced by Italian Legislative Decree no. 152/2023 provide, if the requirements are met, for the conversion of the EU Blue Card into a residence permit for:
Moreover, if the conditions for family reunification are met and the complete application is submitted at the same time as the EU Blue Card application, the residence permit of the family member and that of the highly qualified worker will be issued at the same time.
Another change concerns a foreign national who holds a valid EU Blue Card issued by another Member State: in this regard, it is possible to enter and reside in Italy to carry out a professional activity for a maximum period of 90 days within a period of 180 days. If the residence period to carry out the highly qualified activity is longer than 90 days, it is necessary to apply for an authorisation, but not for an entry visa.
Finally, a foreign national who loses his or her job will be able to make a declaration of immediate availability without the need to register with the employment lists.
Not everyone knows that international companies can hire employees in Italy even if they do not have a legal entity or presence there.
Once the limited number of required documents and information are gathered, the procedure takes only a couple of weeks.
We have created a guide that develops these issues: