The Italian Revenue Agency, in its answer to a request for ruling no. 428 of 12 September 2023, provided some clarification on the tax treatment applicable to remuneration paid to a worker posted abroad, in light of the provisions of Article 51, paragraph 8-bis of Italian Presidential Decree no. 917/1986 (Italian Income Tax Consolidation Act, Testo unico delle imposte sui redditi, ‘TUIR’).
Reference legislation
The reference legislation applicable to the case in question which identifies the criteria for determining income from employment produced abroad is Article 51, paragraph 8-bis of the TUIR which, derogating from the provisions of the previous paragraphs of the same Article 51, provides that “income from employment, performed abroad on a continuous basis and as the exclusive purpose of the relationship by employees who over a period of 12 months stay in the foreign state for a period exceeding 183 days, is calculated on the basis of the remuneration agreed by convention identified annually by the decree of the Ministry of Labour and Social Policy referred to in Article 4, paragraph 1, of [Italian] Decree-Law no. 317 of 31 July 1987, converted by [Italian] Law no. 398 of 3 October 1987”.
That remuneration is fixed annually by 31 January of each year and is determined with reference to, and in any case not less than, the minimum salary provided for by the national collective agreements grouped by comparable sectors.
Applicant’s request for ruling
In the case examined by the Italian Revenue Agency, the applicant is a commercial business that, from 1 January 2022 and until 31 December 2023, has posted one of its employees, in charge of carrying out CEO functions, to its German subsidiary to ensure better coordination between the various operational activities. The employee was considered to be tax resident in Italy for the 2022 tax period as he/she had maintained his/her family and, therefore, his or her centre of interest in Italy.
In light of the managerial nature of the tasks entrusted to the employee and the consequent responsibilities, he/she, as also specified in the international posting letter, is to carry out the work activities on a continuous basis and as the exclusive purpose of the relationship with the German subsidiary for the entire duration of the posting; although the main place of work is identified at the secondee company, in addition, the worker makes occasional trips to various countries other than Germany, including Italy.
The applicant, therefore, asked whether, as a result of the trips made to Italy, the requirements of exclusivity and continuity of the employment relationship carried out abroad were no longer met and therefore raised interpretative doubts about the application of the rules for calculating the taxable base of income from employment using remuneration agreed by convention(retribuzioni convenzionali).
Italian Revenue Agency’s Opinion
In response to the applicant’s request, the tax authority specified that the criterion for calculating income for those workers who, while working abroad, continue to be classified as tax residents in Italy under Article 2, paragraph 2, of the TUIR, means that the income deriving from employment performed abroad is subject to taxation taking as the taxable base the remuneration agreed by convention fixed by the aforementioned decree of the Ministry of Labour and Social Policy, without taking into account the remuneration actually received by the worker.
On the basis of the conditions set out in the aforementioned legislation, therefore, the tax regime referred to in Article 51, paragraph 8-bis of the TUIR applies provided that:
It should be noted that, in relation to the first condition, it is necessary that the person who works abroad is classified in one of the categories for which the decree of the Minister of Labour and Social Policy, in agreement with the Ministry of Economy and Finance, sets remuneration agreed by convention. If the financial sector in which the employee carries out the work activity does not fall within the decree, then the specific regime does not apply.
The second[ED3] condition provided by the legislator is that the work carried out abroad is the exclusive purpose of the employment relationship and, as clarified by the circular of the Ministry of Finance no. 207/2000, it is necessary that a specific contract is entered into that provides that the work must be carried out abroad. As clarified by the Italian Revenue Agency with resolution no. 245/E/2007, “the work must be carried out entirely abroad” in order to exclude cases in which continuity and exclusivity of the work abroad is lacking.
With regard to the calculation of the days of actual stay of the worker abroad, as clarified in circular no. 207/2000, the period to be considered does not necessarily have to be continuous: it is in fact sufficient that the worker works abroad for more than 183 days in a 12 month period. The Italian Revenue Agency has clarified that in using the latter expression, the legislator is not referring to the tax period, but to the worker’s stay abroad established in the employment contract, which may also provide for a period of two calendar years. Circular no. 7/E/2001 specified that if the contract provides for a stay abroad of more than 183 days, the withholding agent is required to apply the taxation provided for in Article 51, paragraph 8-bis of the TUIR starting from the first salary paid.
Response of the Italian Revenue Agency to the specific case
As referred to above, in the case presented by the applicant, the worker, within the framework of the employment contract governing his/her work on his/her posting to the subsidiary in Germany, makes occasional business trips to countries other than Germany, including Italy, for business needs and in the exclusive interest of the subsidiary: this fact, according to the tax authority, is not sufficient to remove the exclusivity and continuity of the employment relationship with the foreign subsidiary.
Therefore, subject to performing the work abroad for a period of more than 183 days per year and assuming that, as stated by the applicant, all the other conditions provided for in the provision under discussion are met, it is believed that, in the present case, the income can be calculated in accordance with Article 51, paragraph 8-bis of the TUIR, i.e., according to the so-called remuneration agreed by convention.
In Circular no. 82 of 22 September 2023, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided practice notes on the incentive to postpone retirement, introduced by Article 1, paragraph 286, of Italian Law no. 197 of 29 December 2022, (hereinafter, also the “2023 Budget Law”) for employees who meet the conditions to access “flexible early retirement” (so-called “Quota 103”). These conditions require that the employee is at least 62 and has a minimum contribution period of 41 years. The implementation procedures for the incentive were established by decree of the Ministry of Labour and Social Policy of 21 March 2023 (hereinafter, “Implementing Decree”), published in the Italian Official Gazette no. 110 of 12 May 2023.
In particular, in its circular, the Entity provides the operating instructions for the use of the incentive for the postponement of retirement by employees enrolled in the Compulsory General Insurance (Assicurazione Generale Obbligatoria, “AGO”), or other substitute and exclusive forms thereof, who, having accrued the right to flexible early retirement, choose to continue their employment, waiving the contribution credit of their portion of social security contributions for disability, old age and surviving partners (invalidità, vecchiaia e superstiti), ‘IVS’ share to be paid by them.
The waiver of the contribution credit, which is the prerequisite for the application of the incentive in question, on the one hand, relieves the employer of the obligation to pay contributions to be paid by the employee, without prejudice to the employer’s obligation to pay contributions of the IVS share; on the other hand, it increases the worker’s salary, given that the amounts corresponding to the share of contributions to be paid by the employer – which the employer should have paid to the social security institution – are paid directly to the employee as remuneration, taxable for tax purposes but not for contribution purposes.
Waiver of contribution credit and workers’ eligibility for the incentive
The waiver of the contribution credit can be exercised by the employee only once during working life and not after obtaining a direct pension, nor after reaching the age requirement for the old-age pension – 67 years – nor, if lower, for the old-age pension provided for by the pension scheme to which he or she belongs.
The waiver only applies to contributions due for periods of work carried out from the date of the first effective date of the flexible early retirement, in the case of an application submitted before that date, or from the month following the month in which the application for waiver is submitted, if the same is submitted at the same time as or after the first effective date of the flexible early retirement.
In addition, the waiver, which applies to all employment relationships held by the employee may also be revoked, under Article 1, paragraph 6, of the Implementing Decree, only once during the course of the worker’s working life. In the event of revocation, it takes effect on the first day of the pay month following the date on which it is exercised.
The incentive in question applies to all employment relationships and only to the portion of IVS contributions payable by workers who, despite having met the requirements for access to flexible early retirement, choose to postpone retirement and continue to work.
From the point of view of qualifying for the incentive, an employee must meet all the following personal requirements:
Duration of the incentive and conditions for right to the exemption
The incentive in question ceases to have effect if one of the following situations occurs:
The incentive in question consists of the total reduction of the contribution due by the worker and, therefore, because it is not a recruitment incentive the general principles on employment incentives do not apply (Article 31, Italian Legislative Decree no. 150/2015). Furthermore, as the incentive applies only to the IVS portion payable by the worker and does not give rise to benefits for the employer, it is not subject to the employer holding a Certificate of Contributions’ Compliance (Documento Unico di Regolarità Contributiva, ‘DURC’) (Article 1, paragraph 1175, Italian Law no. 296/2006).
Effects on pension benefits
The periods during which the worker profits from the benefit in question reduce the rate of financing and calculation referred to in Article 1, paragraph 8, of Italian Law no. 335 of 8 August 1995, and therefore do not affect pensionable remuneration.
In that regard, the INPS states that the use of the benefit in question does not alter the determination of the amount of the pension portions calculated through the remuneration system, which are determined on the basis of pensionable remuneration.
On the other hand, with reference to the contributory pension portion the exemption affects the individual contribution amount, which will be determined by applying the employer’s calculation rate percentage to the taxable base, for the periods covered by the incentive.
Compatibility with State aid rules and coordination with other incentives
With reference to the European Community rules on State aid, the incentive in question is classified as a general intervention that does not give rise an advantage for specific companies or industry sectors or geographical areas of the national territory. Moreover, since the incentive in question applies only to the worker’s portion of the contribution, the measure does not fall within the concept of State aid, since it is a relief enjoyed by natural persons who do not fall within the definition of an undertaking and, therefore, does not affect the principle of competition. Therefore, the application of the above-mentioned relief measure is not subject to the authorisation of the European Commission and registration in the National State Aid Register.
Application for incentive and accreditation procedure
Workers who intend to take advantage of the incentive to postpone retirement must notify INPS, submitting a specific application for accreditation, following which the Entity will check compliance with the eligibility conditions for the incentive and that the worker meets the minimum pension requirements for access to flexible early retirement.
Subsequently, INPS will notify the worker of the outcome of the checks and, through the “Two-way communication” service, also notify the employer of the acceptance of his/her application, if any, who will then be responsible for complying with the formalities, i.e. not paying the contribution portion to be paid by the worker. If the incentive takes effect during periods for which contributions have already been paid, the employer must proceed with the UniEmens flow to recover the sums previously paid.
With judgment no. 16811 of 13 June 2023, the Italian Court of Cassation affirmed that the taxable base for the payment of the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) social security contributions for artisans and traders excludes sums received as dividends by the shareholders of corporations. This judgment affirms the ruling of the Court of Reggio nell’Emilia, confirmed by the Bologna Court of Appeal with judgment no. 57/2017.
In these circumstances and as part of its reasoning, the Court of Appeal had reaffirmed that, in accordance with Article 3-bis of Italian Decree-Law no. 384/1992, converted with amendments into Italian Law no. 438/1992, starting from 1993, the amount of the annual social security contributions due from the parties indicated by Italian Law no. 233/1990, Article 1 (i.e. “persons registered for social security contributions and benefits for artisans and traders’ activities”), related to total business income. The concept of total business income is drawn from Article 55 of the Italian Income Tax Consolidation Act (Testo unico delle imposte sui redditi, ‘TUIR’), and is the total business income reported for personal income tax purposes for the year to which the contributions refer. Consequently, income derived from capital, as defined under Article 44 of the TUIR, deriving purely from shareholdings in capital of companies could not be considered to be included in taxable income.
The INPS appealed to the Italian Court of Cassation against the decision of the Court of Appeal on one ground only, relating to the misapplication of Italian Law no. 438/1992. According to the INPS’ lawyers, the Court of Appeal judges’ decision was based on an erroneous legislative interpretation. This interpretation implies that the law distinguishes between the sums included within the determination of the tax base for contribution and tax purposes, in order to include, in line with the solidarity management of the system, all of the sums received by a party in determining the contribution for pension purposes.
This regulatory interpretation, however, had already been dealt with by the Court of Cassation in previous decisions, thus constituting consolidated precedent which the judges decided to reaffirm (Italian Court of Cassation no. 21540 of 2019; Italian Court of Cassation no. 23790 of 2019; Italian Court of Cassation no. 24096 of 2019; Italian Court of Cassation no. 29779 of 2017; Italian Court of Cassation no. 26958 of 2019; Italian Court of Cassation no. 18822 of 2021).
The current legislation on the subject, namely the above-mentioned Italian Law no. 438/1992, establishes that the amount of the annual contribution due from parties registered for social security contributions and benefits for artisans and traders’ activities “relates to total business income reported for personal income tax purposes for the year to which the contributions themselves refer”. Consequently, to define what is meant by “business income” for contribution purposes, it is necessary to refer to tax regulations – therefore, first and foremost, to the TUIR.
In this regard, the Italian Court of Cassation has held, “since the social security legislation identifies, as the tax base on which to calculate contributions, total business income as defined by the tax regulations and considering that, according to Income Tax Consolidation Act, profits deriving purely from shareholdings in corporations, without the performance of work, are included among capital income, it follows that the latter do not contribute to constituting the tax base for contribution purposes”.
This solution is, according to judges of the Italian Court of Cassation, “completely consistent with the approach of the system as outlined by paragraph 2, Article 38 of the Italian Constitution, which provides that social security protection is due to workers, not to those who merely invest their capital for profit”.
Unlike corporations, the principle of tax transparency applies to partners in partnerships, which provides that – regardless of the source from which they derive and regardless of their corporate purpose – their income is considered business income and is determined on a single basis according to the rules on such income (Article 6, paragraph 3 of the TUIR).
This principle was affirmed by the Court itself in judgment no. 29779 of 2017, according to which, for the purpose of determining the contributions due by artisans and operators of commercial activities, the income received as a limited partner must also be counted, even though it is different from the income deriving from the employment relationship which is subject to social security contributions.
In conclusion, it was observed that the tendency to broaden the contribution base must “be kept within the limits delineated by the legislature, since it is not possible to extend the scope of the relevant provisions by analogy, among other things, as would be the case if the INPS’ argument were accepted, disregarding the intentional parallelism between tax and social security regulations”.
Consequently, in the light of the foregoing, the Italian Court of Cassation rejected the appeal filed by the INPS and declared the validity of the appeal decision, ordering payment of the costs of the proceedings, confirming that, in general, all sums deriving from work activities and constituting business income are subject to social security contributions; on the other hand, if they derive exclusively from financial activities and therefore fall within the definition of capital income, they will not be subject to social security contributions.
According to research by HR Capital, the lack of specific regulations and incentive policies are the main factors of uncertainty.
Despite the absence of a proper regulatory definition of corporate welfare from a labour law perspective, in Italy the instrument continues to stand out as one of the most relevant in the labour world, although some areas of uncertainty still remain that require the legislator to make a further effort and introduce specific regulatory provisions.
This was revealed by research by HR Capital – a subsidiary of De Luca & Partners and a leader in outsourced personnel management and administration services – on the dissemination and use of corporate welfare by Italian companies.
In a general context where corporate welfare is substantially regulated by tax literature and identified as a set of goods and services provided by companies to employees to improve their private and working life, the HR Capital study shows that – among the companies advised by the firm – 25% of the companies that have developed an optimal corporate welfare policy – with the introduction, for example, of direct support for families, work-life balance, training, professional updating and pension provision – are large structured companies.
The remaining 75% of the sample, on the other hand, includes small and medium-sized companies that yet have to establish adequate policies or that do not introduce support policies because they are held back by the possible additional costs to be borne and by the lack of knowledge of the welfare instruments available, thereby simply offering more flexible products or services with a more immediate impact, such as meal vouchers or petrol coupons.
“The picture given by HR Capital’s study shows that the issue of corporate welfare still has several problems to be resolved,” emphasises Leonardo Zaffiri, CEO of HR Capital.”First of all, a certain and well-established legal definition is still lacking: reference is often made solely to fiscal aspects to identify corporate welfare, yet its common meaning is – in actual fact – much broader and all-inclusive, encompassing non-monetary initiatives and services to support and meet the personal and social needs of workers, developing their well-being in the most diverse fields, from health care to child care, from access to credit to leisure time”.
While the labour-law definition of corporate welfare is crucial to the progressive development of this instrument, its dissemination – made even wider after the pandemic moment – also opens up scenarios that are currently being identified, according to Leonardo Zaffiri: “The legislator has intervened on several occasions, though mainly by incentivising the combination of corporate welfare and performance bonuses, introducing measures to facilitate employers with tax and contribution benefits. However, in structural terms, further steps must be taken to promote specific regulatory provisions both concerning the economic field – for example, by setting up a system of concessions to support employers’ choices – and to incentivise the development of more effective, flexible and sustainable corporate welfare programmes, such as the digitisation of welfare platform management systems”.
Rassegna release
AdnKronos/LabItalia
Italia Oggi Sette
The Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’), with Message no. 2923 of 10 August 2023, provided important clarification relating to the cumulation of the ‘NEET’ (persons ‘Not in Education, Employment or Training’) incentive, connected to permanent recruitment carried out from 1 June to 31 December 2023, with other measures that exempt or reduce the funding contribution rates provided for by current legislation, limited to the period of application of the same.
Reference legislation
With Article 27 of Italian Law no. 85/2023, converting into law Italian Decree-Law no. 48/2023 (the Employment Decree), a new financial incentive was introduced for the permanent recruitment, between 1 June to 31 December 2023, of young people under 30 who are not in education, employment or training.
The above-mentioned incentive was introduced to support youth employment. The rule, in fact, grants the employer the right to an incentive, for a duration of 12 months, in the amount of 60% of the gross monthly salary taxable for social security purposes paid to the worker for permanent recruitment within the above-mentioned period of time of persons falling within the category of so-called NEETs.
In particular, the incentive is granted for the recruitment of young people who, on the date of recruitment, meet the following requirements:
The incentive applies, on application to be submitted on the INPS website, for permanent recruitment, including through agencies and under professional apprenticeships.
Cumulation with other tax relief
With specific regard to the possibility of cumulation with another tax relief, the same article specifies that in this case the incentive is granted in the amount of 20% of the gross monthly salary taxable for social security purposes.
The Message under consideration has clarified, in particular, that the reduction of the incentive to 20% in the event of cumulation with other reliefs must be understood not in an objective sense, but in a subjective sense, i.e., it is limited only to cumulation with other measures that entail a benefit for the employer who intends to proceed or who has proceeded with the recruitment.
Consequently, therefore, the aforementioned reduction cannot be applied in cases where, for the same worker, there is an exemption from the share of social security contributions for disability, old age and surviving partners (invalidità, la vecchiaia e i superstiti, ‘IVS’)(under Article 1, paragraph 281, of the 2023 Budget Law, as supplemented by Article 39 of Italian Decree-Law no. 48/2023).
In light of this interpretation, therefore, where the parties interested in the recognition of the incentive have already forwarded to the Entity a specific on-line request for the reservation of resources, stating that they wish to take advantage of the incentive in combination with other reliefs, thus referring to the partial exemption of the employee’s share of IVS social security contributions, they may now cancel this request.
The technical procedures for using the incentive
The INPS has also provided indications regarding the procedure for cancelling the request sent, after which it is necessary to submit a new application in which the option of using the incentive in question “exclusively” must be indicated. This procedure will result in the grant, without prejudice to compliance with all legitimate requirements, of the incentive under discussion in an amount equal to 60% of the taxable salary.
Finally, as already provided for by Circular no. 68/2023, the INPS has confirmed that requests received in the 15 days following the release of the on-line incentive request form will be subject to a one-off delay in cumulative processing, which will be carried out in September 2023. Otherwise, requests relating to permanent recruitment carried out between 1 June 2023 and 30 July 2023 (i.e. the day before the on-line form was released) and received within 15 days following the release of the on-line forms (i.e. by 15 August 2023) will be processed according to the chronological order of the date of recruitment.
Requests concerning recruitment starting from the day the on-line form was released (31 July 2023) will be processed according to the general criterion, represented by the chronological order in which the application was submitted.
Until the date of processing, the requests can be cancelled by the same interested party; if a party wants to amend the content, it is necessary to cancel the request in question and then submit a new one.
With Circular no. 25/E of 18 August 2023, the Italian Revenue Agency provided interpretative clarification and operating instructions on the tax aspects of remote work.
In particular, with the Circular in question, the Revenue Agency focused on remote working and on the application of tax relief for individuals who transfer their tax residence to Italy to carry out a work activity mainly within Italy, governed by Article 16 of Italian Legislative Decree no. 147/2015 (so-called “special scheme for impatriate workers”), and by Article 44 of Italian Decree-Law no. 78/2010 converted into law, with amendments, by Italian Law no. 122/2010 (“special scheme for teachers and researchers”).
In its Circular, the Agency reviewed developments in recent years with respect to the constant increase in the use of forms of work characterised by services provided remotely, defined as ‘agile’. These services are provided without the need for physical presence on premises made available by the employer or, in any case, in a fixed location, and are better known as remote working or agile work: they have been favoured by technological progress and strongly accelerated by the Covid-19 pandemic emergency, which has forced most sectors to redefine working methods.
Therefore, in the face of significant organisational changes within companies, the Revenue Agency’s Circular has defined, based on internal legislation and the methods of performing work, the criteria and the application of tax rules and the determination of residence for tax purposes.
Residence in accordance with Article 2 of the TUIR
The concept of “tax residence” is regulated by Article 2, paragraph 2, of the Italian Income Tax Consolidation Act (Testo unico delle imposte sui redditi, ‘TUIR’) approved by Italian Presidential Decree no. 917/1986. Under this provision a person will be considered to be tax resident in Italy if, for most of the tax period (i.e. 183 days in a year, or 184 days in the case of a leap year) he/she:
These conditions are in the alternative, so that the existence of only one of them is sufficient to anchor a person’s residence in Italy.
The concepts mentioned above relating to Article 2 of the TUIR must be interpreted, by express regulatory provision, in accordance with the rules contained in the Italian Civil Code, which defines domicile as the place where a person has established the main location of his/her business and interests and defines his/her usual residence as his/her place of residence.
In particular, as already clarified in Ministerial Circular no. 304/1197, continuity or permanence of usual residence is not necessary to constitute residence, with the consequence that even prolonged periods of absence do not exclude the establishment of residence in Italy. As regards domicile, it is also necessary to take into account relationships of a non-pecuniary nature, such as personal and emotional ones, to establish whether the centre of business and interests are located in Italy.
In this regard, as already clarified by the Revenue Agency with Circular 9/E/2016, assessment of the conditions for establishing residence, other than the formal registry data, requires a factual verification to be carried out on a case-by-case basis, in order to actually weigh the information establishing the place of domicile or residence as defined under civil law.
Fictitious transfers of residence abroad
The need to provide interpretative clarification in relation to cases characterised by the performance of work activities remotely is closely connected to the need to combat cases of non-genuine residence abroad. In this regard, in fact, Article 2, paragraph 2-bis of the TUIR introduced a relative presumption of tax residence, according to which, unless evidence to the contrary is provided by the taxpayer, persons deleted from the registry of the population resident in Italy and transferred to states or territories with a privileged tax regime as identified in the decree of the Minister of Finance of 4 May 1999 are considered residents of Italy.
The above-mentioned paragraph 2-bis was introduced specifically to counter frequent fictitious migration to countries with privileged taxation. Therefore, even following the formal registration in the Registry of Italians residing abroad, with respect to citizens transferred to countries or territories with privileged taxation, there continues to be a (relative) presumption of tax residence in Italy as a result of the aforementioned paragraph 2-bis.
The residence of remote workers under the domestic legal system
Therefore, it is evident that the Agency, in its Circular, has confirmed that, even in the face of the significant organisational changes within companies, no changes have been made to internal legislation that have affected the rules for determining residence for tax purposes. Consequently, the criteria for establishing the tax residence of individuals remain those provided for in Article 2 of the TUIR (as set out in the previous paragraph) which remain unchanged for those who work remotely.
In other words, the methods of performing work do not affect the criteria for determining tax residence, which remain anchored to fulfilment of at least one of the above-mentioned conditions set out in Article 2 of the TUIR.
Special schemes applicable when working in Italy
Therefore, on the basis of the clarification provided by the Revenue Agency and referred to in the previous points, the Agency has confirmed that the criteria for establishing the tax residence of individuals remain those provided for in Article 2 of the TUIR and that this issue is also relevant for the purpose of applying tax relief for individuals who transfer their tax residence to Italy to carry out a work activity mainly within Italy, governed by the above-mentioned Article 16 of Italian Legislative Decree no. 147/2015 and Article 44 of Italian Decree-Law no. 78/2010 converted into law, with amendments, by Italian Law no. 122/2010.
Ultimately, a person who transfers his/her residence to Italy can access the “special regime for impatriate workers”, while continuing to work remotely for a foreign employer, starting from the tax period in which the transfer to Italy takes place.
In contrast, a person who, having moved to work in Italy, subsequently moves abroad while continuing to carry out his/her work remotely from the new location for the same Italian employer, will not be able to continue to benefit from the tax relief in question, since in this case the income is considered to be produced outside Italy.
The position on the application of the tax relief in question to the “special regime for teachers and researchers” differs. For the purpose of applying this tax relief, in fact, there must be a link between the transfer of the teacher’s or researcher’s residence to Italy and the performance of the activity producing the income subject to tax relief.
As already clarified by the Revenue Agency with Circular no. 17/E/2017, establishing the above-mentioned connection corresponds to the rationale of the rule to facilitate all residents abroad, both Italians and foreigners, who, due to their particular scientific knowledge, may favour the development of research and the dissemination of knowledge in Italy, through their acquisition of know-how from their work activities carried out abroad.
Therefore, in contrast to the provisions of the impatriate regime, a teacher or researcher who has moved to Italy who has an employment relationship with an institution or university located in a foreign country, for which he/she carries out his/her teaching or research activity remotely, will not be able to benefit from the tax relief for the related income because there is no connection between moving to Italy and carrying out a teaching and/or research activity in Italy.
With Circular No. 25/E of 2023, the Italian Revenue Agency provided clarifications with respect to the identification of the tax residence and the taxability of the income earned by remote workers (so-called ‘smart workers’), confirming the application of Articles 2 and 3 of the TUIR, i.e. the ordinary provisions relating to the ‘tax residence’, also with respect to this case.
According to the Revenue Agency’s reading, in fact, the place where the remote work is performed does not affect the criteria for determining tax residence. In determining the tax residence of remote workers, therefore, Article 2 of the TUIR, which sets out the ordinary criteria for establishing tax residence, will still be taken into account.
The Italian Revenue Agency, moreover, has clarified that the tax relief for ‘impatriate’ workers is not precluded for those who transfer their residence to Italy, even if to work remotely on behalf of a foreign employer.
The Ministry of Labour and Social Policy, in its communication of 4 July 2023, explained that Italian Law no. 85 of 3 July 2023, in converting with amendments Italian Decree-Law no. 48 of 4 May 2023, extended the rights of certain categories of workers to work remotely.
Reference legislation
Remote working (or smart working), as regulated by Italian Law no. 81 of 22 May 2017, is a different way performing the employment relationship characterised by the absence of place and time constraints.
Italian Decree-Law no. 48 of 4 May 2023, the so-called Employment Decree, later converted into Italian Law no. 85 of 3 July 2023, extended, until 30 September 2023, the rights of vulnerable workers in the public and private sectors to work remotely.
The right to remote working was also extended to 31 December 2023 to:
For the above-mentioned categories, remote working until the extended dates is permitted even in the absence of the formalisation of the individual agreement entered into with the employer, which remains mandatory for all other workers, as provided for by Article 19 of Italian Law no. 81/2017. The agreement must cover certain specific elements, such as:
Under Article 23 of Italian Law no. 81/2017, moreover, the employer must electronically notify the Ministry of Labour and Social Policy of the names of the workers and the date of commencement and termination of the remote working, in accordance with the procedures identified by the same Ministry in Italian Decree no. 149 of 22 August 2022.
The electronic communication must be made through the application available, via Public Digital Identity System (Sistema Pubblico di Identità Digitale, ‘SPID’) and Electronic Identity Card (Carta d’Identità Elettronica, ‘CIE’) authentication, on the Servizi Lavoro – Cliclavoro portal, and remains mandatory also for workers subject to the extensions detailed above.
The communication must be provided within five days after the start of remote working or, in the case of an extension, from the last day communicated before the extension of the period. In the event of failure or late notification, an administrative sanction ranging from EUR 100 to EUR 500 per individual worker is provided for, as regulated by Article 19, third paragraph, of Italian Legislative Decree no. 276 of 10 September 2003.
With Message no. 2564 of 7 July 2023, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided operating instructions for the exercise of the voluntary contribution option to the contribution-based system exercised at the same time as the application to buy-back periods which determine if the pre-conditions for exercising the option are fulfilled.
In its message, INPS reiterates what has already been clarified in practice, with particular reference to its instructions provided in Circular no. 54 of 6 April 2021. This confirms that if the option to make the voluntary contributions to the contribution-based system provided for in Article 1, paragraph 23 of Italian Law no. 335 of 8 August 1995, is exercised at the same time as the buy-back application, the buy-back periods are relevant for the purposes of determining if the contribution requirements for exercising the option are fulfilled.
INPS also notes that the option to make voluntary contributions to the contribution-based system provided for by Article 1, 23 of Italian Law no. 335/1995, can be exercised during the course of a person’s working life or at the same time as applying for a pension and is subject to the following contribution requirements:
a) less than 936 weeks (equal to 18 years) of contributions on 31 December 1995 (payment of pension benefits exclusively under the contributory regime rules is, however, granted to those who can claim a contribution period of at least 18 years on 31 December 1995, provided they have exercised their option right by 1 October 2001);
b) at least 780 weeks (equal to 15 years) of which at least 260 weeks (equal to five years) are after 1 January 1996;
c) at least one contribution before 1 January 1996.
The operating instructions set out in Message no. 2564 of 7 July 2023, apply in cases in which the person concerned fulfils the requirements for exercising the option to make voluntary contributions to the contribution system provided for in Article 1, paragraph 23 of Italian Law no. 335/1995 (less than 18 years as of 31 December 1995, at least 15 years of which at least five are after 1 January 1996, at least one contribution prior to 1 January 1996), only if the buy-back periods are considered already acquired (e.g. the person concerned reached 15 years of contribution or acquired seniority prior to 1 January 1996 only taking into account the periods subject to buy-back).
The administrative process and procedural instructions on the buy-back application
With Message no. 2564 of 7 July 2023, the INPS provides operating instructions addressed in particular to those involved in the processing of buy-back applications through exercise of the option to make voluntary contributions. The Message also contains instructions on the internal procedures to be followed for buy-back applications, aimed firstly at ascertaining the existence of the contribution requirements to exercise the voluntary contribution option in relation to the contribution-based pension calculation system and identifying the applicable calculation system.
Once the application to make voluntary contributions and buy-back further periods have been submitted at the same time, it is then necessary to check whether the conditions to exercise the voluntary contribution option are met, which determines the type of buy-back that applies.
Therefore, in the absence of contributions prior to 1996, the buy-back fee is determined:
If the requested buy-back period is also decisive for meeting the requirement to be able to exercise the voluntary contribution option (15 years of contribution, of which at least five years after 1 January 1996), the cost is calculated with the percentage calculation (‘deemed’, if required), except for the minimum contribution of one month necessary to acquire the status of person enrolled in the contribution-based regime on 31 December 1995, which is the only one to be calculated with the mathematical reserve criterion.
Fees for buy-back periods
The portion of the fee relating to the buy-back periods which lead to the fulfilment of the requirements for exercising the option (both for acquiring the status of contributor on 31 December 1995 and for reaching the requirement to exercise the option) must be paid in a single instalment, while the remaining cost is charged to the instalments of the payment plan.
In Message no. 2564/2023 INPS gives the example of a contributor who was not a contributor on 31 December 1995 and who, on the date of application, has only 14 years of contributions (obviously from 1996 onwards) and who applies for buy-back for his/her degree course of 4 years (48 months) before 1 January 1996.
Of these 48 months, the minimum contribution must be calculated using the mathematical reserve criterion, i.e. by determining the annual salary portion of the pension that would be due if all 48 months were subject to buy-back using this criterion.
The coefficient corresponding to the sex, age, and contribution seniority reached after buy-back is applied to this value (in the case 18 months – Table annexed to Italian Ministerial Decree of 31 August 2007 – for employees, and 22 April 2008 for the self-employed).
The result must be divided by the number of months (48) or the number of weeks (208 in the case of private employees) to obtain the minimum contribution, which must be paid within 90 days.
Of the 48 months, 12 months are required to enable the voluntary contribution option to be exercised: consequently, the equivalent of 12 months (including the minimum contribution counted with the mathematical reserve) will have to be paid within 90 days in a lump sum and the equivalent of 36 months remaining can be paid in instalments.
Finally, once the lump sum payment has been made, the exercise of the voluntary contribution option becomes irrevocable.
Failure by the person concerned to pay the fee in a lump sum within 90 days from the date of service of the order is considered to be a waiver of the buy-back request, which may, however, be resubmitted at another time.
The National Labor Inspectorate (INL), with note No. 5056 of July 13, 2023, focuses its attention on the protection of workers for the risks related to heat damage due to the particular climatic conditions.
in this regard, it is necessary to provide extra attention during the inspection supervision phase as well as during the information and prevention activities aimed at employers and workers in order to to provide useful information on the effects of temperatures The European Commission’s Green Paper on the Environment, Public Health and Consumer Protection sets out the main objectives of the Directive.
in particular, the Inspectorate reports that the excessive exposure to thermal stress increases the risk of accidents and, at the same time, work performance is exposed to vulnerable situations.
The tasks most affected by this phenomena are those involving outdoor activity, especially in the sectors most exposed to risk such as civil and road construction, agricultural sector, maritime and seaside sector.
It should be pointed out that the company has the opportunity, in the case of recorded or “perceived” high temperatures due to the particular type of work in progress, to request for the ordinary redundancy fund by evoking the causal “weather events.”
In Circular No 58/2023 the INPS provided operating instructions for the management of social security obligations connected to contributions’ exemption for the recruitment of female workers, under Article 1, paragraph 298, of Italian Law No 197 of 29 December 2022 for the period 1 January – 31 December 2023.
Article 1, paragraph 16 of the 2021 Budget Law (Italian Law No 178/2020), granted a 100% contribution exemption up to a maximum limit of EUR 6,000.00 for the recruitment of disadvantaged female workers between 1 July 2022 and 31 December 2022.
The 2023 Budget Law (Italian Law No 197/2022) confirmed the exemption also for new recruitment, on fixed-term or permanent contracts, and for conversions of fixed-term to permanent contracts, of disadvantaged female workers carried out between 1 January 2023 and 31 December 2023. The maximum amount limit has been raised to EUR 8,000.00 per year.
The aforementioned exemptions apply to the recruitment of ‘disadvantaged female workers’, i.e. they apply to the following categories:
From this it follows that, for the grant of the benefits under discussion, female workers of at least 50 years of age must be long-term unemployed (over 12 months) or, in combination with further provisions, ‘without regular paid employment’.
The incentive in question is also granted to agency supply contracts while, on the contrary, it is not granted to intermittent work contracts. Apprenticeships and domestic work contracts are also excluded from the benefit.
Finally, with reference to the duration of the exemption, it is clarified that the incentives have a duration of:
On this second point, it should be specified that in the event that a fixed-term contract which is subject to the exemption is converted into a permanent contract, then the exemption applies for a total of 18 months from the date of recruitment.
In the event of the conversion of a fixed-term contract which does not benefit from the exemption into a permanent contract, the exemption applies for a total of 18 months but starting from the conversion date.
The incentives are also due in the event of an extension of the relationship, up to the overall limit of 12 months.
In the case of part-time employment relationships, the maximum relief must be proportionally reduced.
It should also be noted that the ability to suspend the period of use of the incentives is granted only in cases of compulsory absence from work due to maternity leave, thus allowing the exemption period to be deferred.
The right to use the incentives in question is subject to the following general conditions:
The application of the general principles on employment incentives as governed by Article 31 of Italian Legislative Decree No 150 of 14 September 2015.
The contribution exemptions do not apply where one of the following circumstances intervene:
Finally, we should point out that if the mandatory electronic communications are provided late, this gives rise to the loss of the part of the incentive relating to the period between the start date of the relationship which benefits from the relief and the date of the late communication.
The text converting Italian Decree-Law No 48/2023 into law, also known as the ‘Employment Decree’, was published in the Italian Official Gazette on 3 July 2023. We set out below our comments on some of the main changes in the social security and welfare sphere.
As known, Italian Decree-Law No 48/2023, also known as the ‘Employment Decree’, in force since 5 May 2023, had introduced, among other things, measures aimed at reducing the tax wedge, combating poverty and social exclusion and promoting active employment policies, introducing certain incentives for employers who hire particular categories of workers, i.e. Inclusion Allowance recipients, so-called ‘NEETs’ and the disabled, and providing for an increase in the partial exemption on the old-age/survivor’s pension (indennità vecchiaia e superstiti, ‘IVS’) contribution paid by employees and the tax and social security exemption threshold of fringe benefits.
With the publication of Law No 85/2023 in the Italian Official Gazette of 3 July 2023, converting the ‘Employment Decree’, the legislator has not changed the initial structure of the Decree-law in question, fully confirming the measures indicated above, and has also introduced some significant initiatives regarding the reduction of employment costs for employers operating in the tourism/hotel sector.
The Inclusion Allowance (which comes into effect from 1 January 2024) is a financial support measure granted to households meeting specific income requirements and where at least one of the members of the household is, alternatively:
The Law converting the ‘Employment Decree’, confirmed the provisions of Article 10 of the Decree which introduce, from 1 January 2024, a contribution exemption which may be used up to a maximum of 12 months. This can be extended to 24 months if a fixed term contract is converted into a full-time contract, in the case of recruitment by an employer of future beneficiaries of the Inclusion Allowance.
The contribution relief is a 100% exemption from the social security contributions payable by the employer, with the exclusion of premiums and contributions due to National Institute for Insurance against Accidents at Work (Istituto Nazionale Assicurazione contro gli Infortuni sul Lavoro, ‘INAIL’), up to a maximum limit of EUR 8,000 per year for 12 months. The exemption applies to permanent employment contracts, whether full-time or part-time, and apprenticeship contracts.
The relief is also granted to private employers who recruit Inclusion Allowance recipients under a fixed-term or seasonal employment contract, for a maximum period of 12 months – unless a shorter contract is envisaged. In this case, the exemption is 50% of the total social security contributions payable by an employer, up to a maximum limit of EUR 4,000, excluding INAIL premiums. The provision is also confirmed whereby, in the event that a temporary employee is taken on full-time, the relief in question may be applied for a total of 24 months of which the first 12 refer to the fixed term contract (maximum EUR 4,000.00 per year) and, if the contract is converted to a full-time contract, for a further 12 months (maximum EUR 8,000.00 per year).
The ‘Employment Decree’ has introduced further relief for private companies who recruit ‘NEETs’ (persons ‘Not in Education, Employment or Training’) from 1 June 2023 to 31 December 2023, i.e. young people under 30 who are not engaged in instruction, work or training courses, subject to the obligation to register in the ‘Youth employment initiative’ national operational program.
The ‘Employment Decree’ conversion Law also confirms the provisions which grant the incentive to private employers, subject to an online application to be submitted to the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’), who recruit NEETs under permanent contracts – including under agency supply contracts – or under vocational or trade apprenticeship contracts. The duration of the incentive is 12 months, during which the employer is paid a contribution of 60% of the gross monthly salary taxable for social security purposes, for new recruitment of young people:
From an analysis of the text of the Law converting the ‘Employment Decree’, it is believed that the ‘NEET’ relief may be used with the other incentives and tax exemptions provided for by current legislation, in particular with the ‘Under 36’ incentive due to the ‘common’ scope of application. In the event of accumulation of several incentives, the ‘NEET’ incentive will be reduced from 60% to 20% of the gross monthly taxable salary for social security purposes for each ‘NEET’ employee recruited.
With the aim of boosting the professional skills and labour market inclusion of young people under 35 with disabilities, the provisions of Article 28 of the Employment Decree are confirmed by the Law converting said decree. These provisions established a fund for third-sector entities, voluntary associations, and non-profit organisations that are willing to enter into permanent employment contracts between 1 August 2022 and 31 December 2023 with persons with disabilities.
With a view to increasing employees’ net pay due to the cut in the social security contribution or ‘tax wedge’ (cuneo fiscale) the provisions of Article 39 of the Employment Decree are confirmed by its conversion Law. These provisions raised by 4% the partial exemption on the portion of social security contributions for IVS borne by employees for pay periods from 1 July 2023 to 31 December 2023, excluding the 13th month’s pay. In the light of this provision, the already provided exemption is then increased to 7% if the taxable salary does not exceed EUR 1,923.00 per month and to 6% up to EUR 2,692.00 a month.
With the aim of ensuring permanent employment and to make up for the exceptional lack of job offers in the tourism, accommodation and spa sector, the ‘Employment Decree’ conversion law introduced a new Article 39 bis. This article provides that, for the period from 1 June 2023 to 21 September 2023, private sector employees in the tourism sector, including spas, who earned employment income of less than EUR 40,000.00 in the 2022 tax period, will be paid a special supplement, which does not contribute to the calculation of income, of 15% of gross wages paid in relation to night work and overtime work, under Italian Legislative Decree No 66/2003, carried out on public holidays. The substitute tax regime must be requested in writing by the employee, with a declaration of the amount of the employee income earned in 2022, while the withholding agent offsets the credit accrued under the special supplement by offsetting through the F24 form.
With the Law converting the ‘Employment Decree’, for 2023 only and 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 provisions of Article 40 of the Decree are confirmed. Under this provision, for a single employee with dependent children for tax purposes under Article 23 of TUIR – including if recognised (riconosciuti) or adopted children – or whose income does not exceed the threshold for being considered tax dependent, equal to EUR 2,840.51 or EUR 4,000.00 if they are under 24 years old, the tax exemption limit for fringe benefits is to be raised from EUR 258.23 to EUR 3,000.00 per year per individual employee. The benefits can also be paid ad personam and can include sums reimbursed or paid by the employer for the payment of domestic utilities for the integrated water service, electricity and natural gas.
The decree provides for a reduction of administrative sanctions in the event of non-payment of social security withholding taxes. In the event of failure to pay social security withholding taxes of less than EUR 10,000.00, the new fine is set at one and a half times to four times the amount not paid (previously, the fine was EUR 10,000.00 to EUR 50,000.00).
Furthermore, for breaches arising from failure to pay from 1 January 2023, notice of details of the breach must be given by 31 December of the second year following that of the year of the breach.
As from 15 June, the employers who were forced to suspend their activities due to the floods that hit Emilia-Romagna, Marche and Tuscany can submit a simplified application to access the one-off social safety net introduced by the Floods Decree, i.e. Decree-Law no. 61 of 2023.
The social safety net is intended to protect the employers and workers damaged by the floods and to cope with the emergency.
In this regard, INPS [Italian Social Security Office] Circular No. 53 of 2023 provides the corresponding operating instructions . In particular, employers are exempt from the obligation to inform and hear the trade unions as well as from paying additional contributions (Legislative Decree no. 148/2015). In addition, the decree introduces a derogation in the timing of the submission of applications, for which an information flow, exclusively in CSV format, must be completed.
In its Circular No 49/2023, and on the basis of the regulatory changes that have taken place in recent years, the INPS implemented the extension of provisions to favour the provision of company welfare measures to employees. In the Circular the INPS analysed the regulatory framework and its impact on performance bonuses transformed into welfare measures for the purposes of social security contributions.
Reference legislation
The Legislator, with Italian Law No 208/2015 and Italian Law No 232/2016 (2016 Budget Law and 2017 Budget Law, respectively), essentially introduced the concept of ‘performance bonuses’ (hereinafter, also ‘PB’) – i.e. sums of a variable amount paid to employees linked to increases in productivity, profitability, quality, efficiency and innovation, as well as sums paid in the form of participation in the company’s profits.
The remuneration in question is subject to a 10% substitute tax as against Italian personal income tax (Imposta sul reddito delle persone fisiche, ‘IRPEF’) and the relevant regional and municipal surcharges, for a total gross amount of EUR 3,000.00. Workers in the private sector who hold an employment contract, whether fixed-term or permanent, and who, in the year preceding the year in which the bonus is received, have received employment income of no more than EUR 80,000.00 are eligible for the favourable tax treatment.
In addition to the direct cash payment of the performance bonus due to the employee, Italian Law No 208/2015 provided for the possibility, at the worker’s request, of converting the amount due under the PB and receiving it in the form of company welfare, if any. The aforementioned subsidised sums may therefore be replaced by one or more services exempt from social security contributions for both employer and employee.
In addition to the conditions to be met by the worker, to apply the favourable regime the legislation provides that the performance bonus must be:
Article 1, paragraph 63 of Italian Law No 197/2022 (2023 Budget Law) provided that, for the 2023 tax year only, the amounts paid as performance bonuses to workers will be subject to 5% substitute tax.
On the other hand, there is no single legislative framework for corporate welfare. Corporate welfare is considered to be the goods and services that an employer provides – on the basis of an agreement concluded with trade union representatives, or under a unilateral regulation – to its employees to satisfy certain needs of a non-work nature.
The area of corporate welfare developed through the combination of certain tax regulations laid down by Italian Presidential Decree No 917/1986, the Italian Income Tax Consolidation Act (Testo Unico delle Imposte sui Redditi, ‘TUIR’). These are mainly contained in Article 51, where a number of goods and services are excluded from taxable remuneration, and in Article 100, which provides for the deductibility of ‘expenses relating to work or services that can be used by all employees or categories of employees voluntarily incurred for specific purposes of education, training, recreation, social and health care or worship’.
Under Article 51, paragraph 1 of the TUIR, ‘all sums and amounts in general, for whatever reason, received during the tax period, including in the form of charitable donations, in connection with the employment relationship’ fall within income from employment and are therefore subject to ordinary taxation and social security contributions. Exceptions to this principle of remuneration which is taxable in full are the explicit exceptions provided for in Article 51, paragraph 2 of the TUIR.
Conversion of performance bonuses into corporate welfare
The 2017 Budget Law, making some amendments to the 2016 Budget Law, provided that the following types of income are not included in employee income, nor are they subject to substitute tax if, in lieu of performance bonuses, they are received or enjoyed by the worker, at his or her choice:
In relation to subparagraph a) above, therefore, the exemption is extended so that sums paid as performance bonuses and profit-sharing are not included in employee income, nor are they subject to substitute tax, even if they are contributed to complementary pension schemes. The legislation also provides that bonuses may be deducted from personal income even if they exceed the limits. The Italian Revenue Agency, in its Circular No 5/E/2018, clarified that ‘the tax-free substitution of the performance bonus with contributions to the complementary pension scheme […] was already possible under the ordinary rules for determining employee income, since such contributions withheld by the employer fall within Article 51, paragraph 2, letter h)’.
With regard to the applicable social security regime, on the instructions of the Ministry of Labour and Social Policy, under Article 12 of Italian Law No 153/1969, the contributions paid at the employee’s request to complementary pension schemes, in lieu of all or as part of the PB, is subject to a 10% solidarity contribution (contributo di solidarietà) (an additional pension contribution) payable by the employer.
The same considerations apply to subparagraph b) since, also in this case, the amounts of the PB that are converted into contributions to be paid to welfare funds are excluded from employment income. Moreover, for contribution purposes, paragraph 4 of the aforementioned Article 12 of Italian Law No 153/1969, provides that contributions to ‘professional funds, funds, schemes provided for by collective agreements or company agreements or regulations, for the purpose of providing supplementary social security or welfare benefits for employees and their family members during or after termination of the employment relationship’ are subject to the 10% solidarity contribution payable by the employer.
Finally, with reference to the case of the replacement of performance bonuses with shares offered to all employees referred to in subparagraph c), it is noted that the legislator has introduced an exception to Article 51, paragraph 2, subparagraph g) of the TUIR. The exception applies both to the value limit of the shares that are not included in employee income, and to the conditions that require the shares to be granted to all employees and the non-transferability of the shares by the employee before the three-year period, as well as – including after that period – to the employer or the issuing company.
By its Circular No 46 of 17 May 2023, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided some important clarification on the liquidator’s information and contribution obligations on the termination of permanent employment relationships in the cases governed by Italian Legislative Decree No 14/2019, amended by Italian Legislative Decree No 83/2022 (implementation of EU Directive 2019/1023), containing the ‘Business Crisis and Insolvency Code’ (Codice della crisi di impresa e dell’insolvenza, ‘CCII’), which entered into force on 15 July 2022.
In particular, in its circular the INPS highlights the regulatory changes introduced by the new Italian Business Crisis and Insolvency Code and provides operational guidelines for the management of the New Social Insurance for Employment (Nuova Assicurazione Sociale per l’Impiego, ‘NASpI‘) contribution due for interruptions of permanent employment relationships in the light of the provisions of the CCII.
Reference legislation
As a preliminary remark, it should be noted that the Business Crisis and Insolvency Code, as regulated by Italian Legislative Decree No 14/2019, includes specific provisions on the management of employment relationships, in particular in Articles 189 and 376.
In particular, Article 376 of the aforementioned Italian Legislative Decree No 14/2019, by amending Article 2119 of the Italian Civil Code, states that ‘The compulsory administrative liquidation of the undertaking does not constitute just cause for termination of the contract. The effects of a compulsory winding-up by the court on employment relations are governed by the crisis and insolvency code’.
In this respect, according to Article 189, the initiation of compulsory winding-up proceedings against the employer does not constitute grounds for dismissal.
However, the liquidator must give notice of dismissal when the conditions and reasons indicated in the same Article 189 are met, i.e. ‘if the continuation or transfer of the company or a branch thereof is not possible, or in any event there are clear economic reasons inherent in the organisation of the work’.
Therefore, employment relationships in place at the date of the declaratory judgment remain suspended until the employees are given notice of the liquidator’s takeover or withdrawal, which takes effect from the date of the start of the compulsory winding-up proceedings.
The suspension of employment relationships is intended to allow the liquidator to assess the possibility of continuation of the business activity (directly or indirectly) and continues until the liquidator takes over the employment relationship or orders the dismissal of the employee or in cases where the latter does not resign.
That said, the ‘suspended’ relationships are in any event considered to be terminated by law four months after the date of the start of the compulsory winding-up proceedings.
The suspension may be extended for a maximum of eight months if the conditions set out in Article 189, paragraph 4 of the CCII are met, i.e. by order of the bankruptcy Judge, following a petition that may be submitted by the liquidator, by the director of the Local Labour Inspectorate of the area where the compulsory winding-up proceedings have been started or, finally, following a petition submitted by individual workers. In the latter case, the extension takes effect only in respect of the applicant workers.
Finally, an employee’s resignation during the suspension period, which is understood to be resignation for just cause within the meaning of Article 2119 of the Italian Civil Code, takes effect from the date of the start of the compulsory winding-up proceedings, provided that the worker is not the beneficiary of wage guarantee payments (under Titles I and II of Italian Legislative Decree no. 148/2015), since, in that case, the resignation is not considered to be for just cause and will not have retroactive effect.
Carrying on the debtor’s business
With reference to employment relationships, Article 189, paragraph 9 of the Italian Business Crisis and Insolvency Code provides that while the liquidator carries on the debtor’s business in the compulsory winding-up, existing employment relationships continue, unless the liquidator suspends them or dismisses the employees under the applicable ordinary employment regulations.
Therefore, in the event of suspension, the above-mentioned provisions of Article 189 on withdrawal by the liquidator, termination of employment and resignation by the employee for just cause apply in so far as they are compatible.
Collective redundancies
In the case of collective redundancies, the employment relationships are terminated from the date on which the liquidator gives notice of the termination.
In this respect, the reference regulatory provisions do not change and remain those set out in Articles 4 and 24 of Italian Law No 223/1991. However, it is worth noting that the Italian Business Crisis and Insolvency Code sets out a specific simplified procedure for collective redundancies occurring during liquidation proceedings.
Moreover, in cases of collective redundancies, once the trade union agreement has been reached, or the procedure has been exhausted, the liquidator takes any consequent action under Article 4, paragraph 9 of Italian Law no 223/1991. Consequently, termination by operation of law (with effect from the date of the start of the compulsory winding-up proceedings) does not apply when the liquidator has commenced the collective redundancy procedure.
Finally, termination by operation of law at the end of the suspension period of four or eight months does not apply when collective redundancy procedures already started by the liquidator are pending.
The contribution obligation under the ‘redundancy ticket’ (ticket di licenziamento)
In the event of termination of employment described above, whether due to withdrawal by the liquidator, resignation of the employee during the period of suspension – if they fall within the cases considered for just cause – as well as termination by law at the expiry of the period of suspension of employment, the question arises as to whether or not it is necessary to pay the ‘redundancy ticket’ payment under Article 2, paragraphs 31 to 35 of Italian Law No 92/2012 as amended.
Article 2, paragraph 31 of Italian Law No 92/2012, which introduced the redundancy ticket, states that this contribution is always due on termination of a permanent employment relationship for reasons which, regardless of the contribution requirement, could, even potentially, give rise to the right to receive NASpI.
That said, given that Article 190 of Italian Legislative Decree No 14/2019, which governs the Italian Business Crisis and Insolvency Code, states that termination of employment under Article 189 of the same decree constitutes involuntary loss of employment and therefore gives rise to the right to NASpI, with its Circular No 46/2023 the INPS confirms that the obligation to pay the ticket exists for each type of termination referred to in the aforementioned Article 189 of Italian Legislative Decree No 14/2019.
However, in the cases of termination of employment provided for in Article 189 of Italian Legislative Decree No 14/2019, the amount of the NASpI ticket is admitted to the statement of liabilities as a claim prior to the start of the compulsory winding-up proceedings, and the liquidator cannot in fact proceed with the payment.
Therefore, the relevant UNIEMENS forms flows must in any case be sent within the month following the month in which the notice of termination of employment was given, while it will be the responsibility of the local competent INPS offices to manage recovery of the claim.
On the contrary, for employment terminations occurring during the carrying on of the debtor’s business in compulsory liquidation, the relevant claims are satisfied before distribution under Article 221, paragraph 1, letter a), and Article 6, letter d) of the Italian Business Crisis and Insolvency Code.
Italian Legislative Decree No 48/2023, also referred to as the ‘Employment Decree’, amended, among other things, the incentives provided for employers who hire particular categories of workers, namely Inclusion Allowance recipients, so-called ‘NEETs’ and people in receipt of invalidity benefit.
In general, the Inclusion Allowance constitutes economic support payable to households consisting of, at least one of the following (i) a disabled person, (ii) a minor, (iii) a person over sixty years of age, or (iv) a person in receipt of invalidity benefit.
For future beneficiaries of the Inclusion Allowance (to come into effect under Article 1 of the Employment from 1 January 2024), the law provides, in cases of hiring by employers of these individuals, a social security contributions exemption usable up to a maximum of 12 months extendable to 24 months in case of transformation of the contract in question [from a fixed-term contract to a permanent one].
In this regard, Article 10 of the Employment Decree with reference to economic incentives granted to private employers hiring individuals benefitting from the above allowance, provided an incentive of exemption from payment of 100% of the employer’s social security contributions, excluding premiums and contributions due to National Institute for Insurance against Accidents at Work (Istituto nazionale per l’assicurazione contro gli infortuni sul lavoro, ‘INAIL’), up to a maximum of EUR 8,000 per year for 12 months as financial incentives for private employers who hire those in receipt of above-mentioned allowance. This exemption will be granted for permanent employment hires, whether these are full-time or part-time, including through an apprenticeship contract.
The relief is also granted to private employers who recruit recipients of the Allowance under a fixed-term or seasonal employment contract, for a maximum period of 12 months, provided that the contract is of shorter duration. In this case, the exemption is 50% of the employers’ total social security contributions, excluding INAIL premiums, up to a maximum of EUR 4,000 per year.
Examination of the rule shows that the incentive may apply for a total of 24 months in the case of stabilisation of the fixed-term employee the conversion of fixed-term contracts into permanent ones, of which the first 12 refer to fixed-term (maximum of EUR 4,000.00 per year) and, in the case of transformation, for an additional 12 months (for EUR 8,000.00 per year).
Additional incentives are provided for private companies who recruit young people ‘under 30’ who are Not in Education, Employment or Training (‘NEETs’) provided they are registered with the Youth Employment Initiative’ national operational program.
Under Article 27 of the Employment Decree, the incentive is granted to private employers who hire NEETs on permanent contracts, including under agency supply contracts, or on vocational or trade apprenticeship contracts.
The incentive in question lasts for a period of 12 months. Under it the employer is awarded a contribution equal to 60% of the gross monthly salary taxable for social security purposes, for new recruitment from 1 June 2023 to 31 December 2023 of young people:
The ‘NEET’ incentive is cumulative with other incentives and contribution exemptions provided by current legislation, among which of particular interest due to the ‘common’ scope of application is the ‘Under 36’ incentive, extended by Article 1, paragraph 297 of the 2023 Budget Law. In the event of accumulation of several incentives, Paragraph 2 provides for the reduction of the ‘NEET’ incentive from 60% to 20% of the gross monthly wage taxable for social security purposes for each ‘NEET’ employee recruited.
With the aim of boosting the professional skills and labour market inclusion of young people under 35 with disabilities, Article 28 of the Employment Decree established a fund for third-sector entities, voluntary associations, and non-profit organisations that enter into permanent employment contracts between 1 August 2022 and 31 December 2023 with individuals with disabilities.
With a view to increasing employees’ net pay due to the cut in the social security contribution or ‘tax wedge’ (cuneo fiscale) Article 39 of the Employment Decree raised by 4% the partial exemption on the share of social security contributions for IVS (disability, old age and surviving partners) borne by employees for pay periods from 1 July 2023 to 31 December 2023, excluding the 13th month’s pay.
In the light of this provision, the already provided exemption is increased to 7% if the taxable salary does not exceed EUR 1,923.00 per month and to 6% up to EUR 2,692.00 a month.
For employees with dependent children for tax purposes only, and limited to the 2023 tax period, the tax exemption limit for fringe benefits is to be raised from EUR 258.23 to EUR 3,000.00 per year per individual employee. The increase in the limit only affects workers with children who are dependent for tax purposes under Article 23 of Italian Presidential Decree No 917/1986 (‘Italian Income Tax Consolidation Act’ or ‘Testo unico delle imposte sui redditi’, ‘TUIR’).
Derogating from the provisions of Article 51, paragraph 3, of the TUIR, and only for the employees involved, the value of goods sold, and services provided to employees with children for tax purposes, as well as the sums disbursed or reimbursed to those employees by employers for the payment of domestic utilities for integrated water service, electricity and natural gas, do not constitute employee income, within an overall limit of EUR 3,000.00.
By message No 1450 of 18 April 2023, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided some important clarification on eligibility for employment incentives under current legislation in the case of new recruitment under an ‘expansion contract’ (contratto di espansione).
In its message, the Entity summarises the regulations relating to the general principles for employers who are recruiting to take advantage of these incentives. The message focuses first on the eligibility of employers who requested the usual recruitment incentives under our system, to actually obtain them during the expansion contract, in light of certain provisions of Article 31, paragraph 1, letters a) and c) of Italian Legislative Decree No. 150/2015. These provisions respectively provide that:
The expansion contract was introduced on an experimental basis, limited to 2019 and 2020, by Article 26-quater of Italian Decree Law No 34/2019. This provision incorporated it into Article 41 of Italian Legislative Decree No. 148/2015, thus repealing job-creation agreements (contratto di solidarietà espansivo).
Originally, the expansion contract was aimed exclusively at large companies with workforces above 1,000 employees. It sought to incentivise reindustrialisation and corporate reorganisation through, (i) the introduction of new staff into the workforce, (ii) staff retraining to update individual and collective skills, and (iii) the recruitment on a permanent basis of new skilled employees.
With Italian Law No 178/2020 (2021 Budget Law), the legislator, on an experimental basis, extended the duration of expansion contracts to 2021. The range of employers was also expanded to those with not less than 500 working units. The provision extended incentives to those who take early retirement within five years of their theoretical retirement date to those employers with at least 250 employees. The number of employees is calculated as an average over the previous six months. For permanent groupings of undertakings with a single production or service purpose the overall number of employees is aggregated (INPS Circular No 48 of 24 May 2021).
Subsequently, by Italian Law No 234/2021 (2022 Budget Law), the expansion contract provision was extended for 2022 and 2023. For this period only it can also be accessed by employers with a workforce of not less than 50 working units calculated on the same basis as set out above, i.e. an average over the previous six months and in aggregate for permanent groupings of undertakings (INPS Circular No 88 of 25 July 2022).
As a result of the above amendments made by the Budget Law 2022, employers with a workforce of not less than 50 working units may also, for the years 2022 and 2023, initiate a consultation procedure to enter into an expansion contract with the Ministry of Labour and Social Policy and the comparatively most representative trade unions at national level (or with their company trade union representatives or with the joint trade union representative).
As is well known, Article 31, paragraph 1 of Italian Legislative Decree No 150/2015 dictates the general principles for the use of incentives by employers relating to recruitment.
On the basis of this legislation, in message No 1450/2023, INPS focuses first on Article 31, paragraph 1, letter a) of Italian Legislative Decree No 150/2015, which states that ‘incentives are not payable if the recruitment arises under a pre-existing obligation established by a legal provision or collective bargaining’.
Taking into account the opinion of the Italian Ministry of Labour and Social Policy, with the message under discussion INPS clarified, firstly, that an undertaking to recruit workers with an open-ended contract (or professional apprenticeship), to which the employer has subjected itself in negotiations and included in the expansion contract, does fall within a ‘pre-existing obligation’ as defined in the general principles in the above-mentioned regulatory provision. Rather the INPS’s view is that such an undertaking gives rise to an employer obligation under the bargaining agreement signed at a governmental level during the consultation procedure to conclude the expansion contract.
Following this logic, according to message No 1450/2023, the obligation to recruit thus constitutes a clause in the contractual procedure to which the employer voluntarily submits. Therefore, from this perspective, recruitment does not constitute the implementation of a legal obligation, but the mere fulfilment of the contractual provision.
That said, with the message under discussion, INPS confirmed that new recruitment by the employer as an essential element of the expansion contract is not to be considered as implementing a legal obligation. The employer can therefore benefit from the applicable incentives, where they are payable, regardless of whether the Extraordinary Wage Guarantee Fund (Cassa Integrazione Guadagni Straordinaria, ‘CIGS’) under Article 41, paragraph 7, of Italian Legislative Decree No 148/2015 is used.
The issue regarding the eligibility for the proposed recruitment incentives is also analysed by INPS in light of the above-mentioned principle expressed in Article 31, paragraph 1, letter c) of Italian Legislative Decree No 150/2015, according to which ‘the incentives do not apply if there are ongoing work suspensions related to a company crisis or reorganisation at the employer or the user through an agency contract, except in cases where the recruitment, transformation or agency contract is aimed at recruiting employees with a different level of qualification from that held by the suspended workers or who will be employed in different production units.’
According to the clarification provided by the Institute, the particular characteristic of the expansion contract also emerges in this case. This is because the use of this type of contract presupposes that the concerned employer carries out a structural process of reindustrialisation and reorganisation in the context of which new recruitment constitutes an essential element of the contract itself, both through (i) generational turnover in relation to the replacement of so-called ‘departing workers’, (Article 41, paragraph 5-bis, of Italian Legislative Decree No 148/2015), and (ii) as a result of upgrading the professional skills of existing staff, the pursuit of technological progress and development, and the acquisition of new professionals consistent with the business reorganisation and reindustrialisation process.
Hence the special nature of the expansion contract and, with it, by implication, the new recruitment provided for in the bargaining agreement.
That said, with the message under discussion, INPS confirmed that the employer can therefore access the incentives even where reductions in working hours are in place, with recourse to CIGS, under Article 41, paragraph 7, of Italian Legislative Decree No 148/2015. INPS does not, therefore, consider that there is an actual conflict with the rationale behind the provision of Article 31, paragraph 1, letter c) of the above-mentioned Italian Legislative Decree No 150/2015.
With Order No. 8913 of 29 March 2023, the Court of Cassation affirmed that the payment of the social security contribution to the National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) is also due on the sums not paid to the worker when, following a conciliatory agreement, the worker waives compensation in lieu of notice.
A company appealed against an assessment report issued by the INPS, relating to the payment of the unpaid contributions and due on compensation in lieu of notice which was not paid to dismissed workers. The Bologna Court of Appeal repealed the first instance ruling and accepted the company’s application.
The employment relationships of the above-mentioned workers had been terminated through the use of voluntary resignation incentives, agreed in trade union conciliation. At the conciliation, therefore, the workers involved had waived, among other things, the compensation in lieu of notice provided for by the collective bargaining agreement.
In these circumstances, the Bologna Court of Appeal considered that the parties, in being able to waive the contractual element of the compensation in lieu of notice, had exercised an alienable right. In relation to this, and since no amount was paid on that ground, a contribution obligation could not arise.
The INPS, in appealing against the decision of the Bologna Court of Appeal, argued that, in its opinion, the prerequisites had been met for breach or misapplication of Article 12 of Italian Law no. 153/69 and Article 1 of Italian Decree Law no. 338/1989, on the subject of ‘minimum contribution’. According to the appellant, in fact, the economic-contractual elements provided for by law such as ‘compensation in lieu of notice’ provided for by Article 2118 of the Italian Civil Code, although not paid under the agreement reached between the parties, would still be subject to the contribution obligation.
In particular, Article 1 of Italian Decree Law no. 338/1989 provides that the remuneration to be assumed as the basis for calculating social security contributions cannot be lower than the remuneration established by law. The rule, therefore, refers to the limits of legal remuneration and not that actually paid to the worker. In this regard, for example, defaults by the employer in relation to the employee in the payment of wages are irrelevant. From this, therefore, it is inferred that the social security obligation is independent of the remuneration obligation.
By way of example, the Court of Cassation judges retraced their way through some previous rulings concerning agreements for the reduction of working hours or relating to the temporary suspension of performance and the subsequent omission of pay. These agreements, ultimately, “are not enforceable against the INPS” (Court of Cassation no. 15120/2019, Court of Cassation no. 13650/2019), firstly, as they refer to the employment relationship and not to the separate social security relationship. Secondly, since the latter is autonomous with respect to the former, as well as subject to the minimum contribution rule, under which the remuneration due by law is relevant for contribution purposes.
In the light of the law considered, the court has reiterated that the social security rights that arise as a result of legislation are not available between contractual parties. Consequently, any waivers of the sums due are not relevant for the purpose of determining social security contributions.
The company, therefore, despite having consensually terminated the employment relationships under the conciliation agreement that followed the notice of dismissal, is required to pay the contributions relating to the compensation in lieu of notice that should have been paid in the absence of an agreement.
The Bologna Court of Appeal, according to the Court of Cassation judges, did not apply the principles of law mentioned above. In fact, the appeal judgment spoke of “consensual termination of the relationship” and of “waiver of the right to compensation in lieu of notice”, without considering that while this is relevant to the employment relationship, it is not relevant to the separate social security relationship, since the settlement, and therefore the waiver of the right, is unenforceable against the INPS.
The Court of Cassation also observed that the INPS did not request the payment of contributions on the sums paid in compliance with the settlement. Instead INPS demanded, based on the rule of the minimum contribution to which the remuneration due according to law is relevant, the payment of “sums that would have been due specifically under the law (Article 2118 of the Italian Civil Code) and arising from the employment relationship, regardless of what the parties later established in the settlement“.
In conclusion, and accepting the INPS’s appeal, the Court of Cassation ruled that the Bologna Court of Appeal should have established whether, given the company’s desire to withdraw, the compensation in lieu of notice had been due to the workers, regardless of the fact that this was not paid because the aforementioned workers accepted sums in a different capacity, that is, as a voluntary resignation incentive.
Il CCNL ha previsto, in favore dei lavoratori in servizio nel periodo compreso tra settembre 2021 e febbraio 2023, l’erogazione di arretrati. Il pagamento è erogato a decorrere dalla mensilità del mese di marzo e l’importo totale è compreso tra Euro 1.607,41 e Euro 803,70, suddiviso in 10 rate mensili.
Con decorrenza dalla data del 1° dicembre 2021, anche a integrale copertura del periodo trascorso a titolo di carenza contrattuale 2019-2021, in favore del personale in forza nelle aziende associate nel mese di dicembre 2021, la retribuzione tabellare lorda riferita al parametro B1 è incrementata dell’importo di Euro 65,00 lordi mensili, da riparametrare sulla base della scala applicata e a cui detrarre l’I.V.C. già corrisposta dalle aziende.
A decorrere dal 1° gennaio 2021, ai dipendenti di aziende che non abbiano stipulato accordi di secondo livello alla data del 31 dicembre 2020, e sempreché gli stessi lavoratori non percepiscano trattamenti economici, anche forfettari, individuali o collettivi, in aggiunta al trattamento economico già fissato dal C.C.N.L., erogato un importo annuo, in cifra fissa pari a euro 400 lordi, da corrispondere entro il 31 maggio 2021, e così per ogni anno successivo.
Il Contratto Collettivo Nazionale di Lavoro Intersettoriale 20 luglio 2020 per i dipendenti delle aziende del Commercio, Terziario, Servizi, Turismo e Pubblici Esercizi decorre dalla data del 1° giugno 2020 e scade il 31 maggio 2023. Le Parti si impegnano, durante tutto il periodo di vigenza del presente C.C.N.L., a rivedersi con cadenza annuale al fine di armonizzare, rispetto ai futuri andamenti, l’attuale disciplina economica e normativa.
Nel mese di maggio 2023 è prevista l’erogazione di importi a titolo di “una tantum” per i dipendenti i cui rapporti di lavoro sono disciplinati dai seguenti CCNL:
The Italian National Social Security Institute (Istituto nazionale della previdenza sociale, ‘INPS’), with Circular No 32/2023, provided administrative instructions for accessing the New Social Insurance for Employment (Nuova Assicurazione Sociale per l’Impiego, ‘NASpI’) unemployment benefit in cases of resignation of a working father who has taken compulsory paternity leave. This area is governed by the new Article 27 bis of Italian Legislative Decree No 151/2001 (Testo Unico in materia di tutela e sostegno della maternità e della paternità, Maternity and Paternity Protection and SupportConsolidation Act, the ‘Consolidation Act’), as already provided for in cases of resignation of a working father taking alternative paternity leave, under Article 28 of the Consolidation Act.
It should be recalled that Article 28 of the Consolidation Act regulates alternative paternity leave taken in lieu of the mother’s leave in the presence of particularly serious situations, such as the death or serious infirmity of the mother, the abandonment of the child by the mother or when the child is in the exclusive custody of the father.
With the introduction of Article 27 bis of the Consolidation Act, the right to access the NASpI allowance is therefore also extended to working fathers who have taken the period of compulsory leave and who voluntarily resign within the first year of the child’s life.
In its circular, INPS reviews the regulations on paternity leave. It focuses first of all on the amendments that Italian Legislative Decree No 105/2022, in force from 13 August 2022 and containing the provisions aimed at improving work-life balance for parents and caregivers, made to the Consolidation Act. In particular the circular makes reference to the introduction of Article 27-bis, relating to ‘Compulsory paternity leave’, and to the amendment of paragraph 7 of Article 54 on the prohibition of dismissal, by which the prohibition was also extended to a working father who has taken compulsory leave (Article 27-bis of the Consolidation Act).
The new Article 27-bis of Italian Legislative Decree 151/2001 introduced compulsory paternity leave. This requires working fathers to abstain from work for a period of 10 working days, to be taken from the two months preceding the presumed date of birth and within the following five months.In cases of multiple births, the duration of the leave is doubled, thus increasing to 20 working days.
The Institute also specified that the 10 working days are not divisible into hours but may be used on a non-continuous basis. In the same way, the leave is also available in the event of the perinatal death of the child.
This leave is also available during the working mother’s maternity leave and is also compatible with alternative paternity leave under Article 28 of the Consolidation Law.
Articles 54 and 55 of the Consolidation Act regulate the prohibition on dismissal and resignation of mothers and fathers during the maternity and paternity protection period.
In particular, Article 54 of the Consolidation Act provides that working mothers may not be dismissed from the beginning of the pregnancy period until the end of the period of compulsory leave from work, and in any case until the child is one year old.
With the additions made to these rules by Italian Legislative Decree No. 105/2022, and also in cases of taking compulsory paternity leave (Article 27-bis of the Consolidation Act), the prohibition on dismissal also applies to working fathers for the duration of the leave itself and is extended until the child is one year old.
Accordingly, the latter provision – which already in its original wording provided for the protection of the prohibition on dismissal of the working father in the event of taking alternative paternity leave under Article 28 of the Consolidation Act – extends the prohibition on dismissal also in the event of taking of compulsory paternity leave under Article 27-bis.
Article 55 of the Consolidation Act also provides that in the event of voluntary resignation submitted by the working mother during the period for which the prohibition on dismissal applies, the working mother is not required to observe the notice period and is entitled to the indemnities provided for by legal and contractual provisions in the event of dismissal. In this regard, it should be noted that these provisions also apply to a working father who has taken alternative paternity leave.
With regard to the above, following the concurring interpretation of the Ministry of Labour and Social Policy of the above mentioned legal provisions, INPS has clarified that by reason of the generic reference to ‘paternity leave’ and in the absence of a specific qualification thereof the protections provided for by Article 55 are to be understood as covering the working father both in the case of taking compulsory paternity leave and in the case of taking alternative paternity leave, governed respectively by the aforementioned Articles 27-bis and 28 of the Consolidation Act.
Before the aforementioned amendments to Articles 54 and 55 of the Consolidation Act, access to NASpI in the event of resignation during the period in which dismissal is prohibited and until the child is one year old was granted to the mother, and also to the father, but only in the case of alternative paternity leave, which can be taken ‘such as the death or serious infirmity of the mother, the abandonment of the child by the mother or the child is in the exclusive custody of the father’.
As a result of the abovementioned amendments, a father who has taken compulsory paternity leave and/or alternative paternity leave is entitled to NASpI unemployment benefit, subject to compliance with all other legislative requirements.
The position remains that, in the event of resignation submitted by a worker who takes (compulsory or alternative) paternity leave in the subsequent protected period until the child is one year old, the employer is required to pay the so-called redundancy payment to finance the NASpI unemployment benefit.
In implementing the indications contained in its circular, INPS also specified that applications for NASpI unemployment benefits submitted by working fathers following resignations occurring during the period in which the prohibition against dismissal applies, and rejected pending the publication of the circular itself, may be re-examined on application by the parties concerned to be forwarded to the competent INPS office.