EU Blue Card holders will be able to start work immediately even in the absence of a “work permit employment contract” – There are also changes to the “digital nomads” guidelines.

Workers who are citizens of countries outside the European Union and who come to Italy to work are regulated by specific provisions, under which the Ministry of the Interior sets and limits the annual entry quotas. The provisions also ensure that highly qualified personnel can benefit from ad hoc exemptions from these quotas, allowing them to work in Italy regardless of the annual limits.

For highly qualified “non-EU” personnel, the procedures for the entry into Italy require the Italian employer and the worker to complete a set of procedural requirements certifying that the worker is highly qualified and specialised. In most cases, this will involve several relevant authorities and processing times of months.

In light of the growing international mobility of workers over recent years – also as a result of the spread of remote working that occurred during the Covid-19 pandemic – the above-mentioned entry requirements have proved to be particularly cumbersome with respect to the specific needs of employers, given the increasing number of highly specialised workers – whether employees or self-employed – who decide to work abroad and remotely for a certain period of time,with respect to their country of origin or employment.

In this regard, there have been some recent changes, deriving, first of all, from the transposition in Italy of Directive (EU) 2021/1883 and the subsequent measures introduced by the ministries concerned, which have addressed the specific features of the new procedures with a circular and a Ministerial Decree.

Looking at the recent changes, it should be remembered that in the Italian legal system, Italian Legislative Decree no. 286/1998 (“Consolidated Immigration Act”) regulates the entry into Italy of foreign persons, including with reference to employment relationships. As mentioned above, and with particular relevance to the latter, it is generally provided that, with respect to the so-called “annual quotas” of entry from time to time established by the Ministry of the Interior, it is possible to guarantee the entry of so-called “extra-quota” workers, i.e. in derogation of the ministerial limits established annually, for foreigners who meet certain specialisation requirements. These exceptions are regulated by Article 27 of the Consolidated Immigration Act.

Following the entry into force of Italian Legislative Decree no. 152/2023, which incorporated into Italian law the aforementioned Directive (EU) 2021/1883 aimed at expanding and simplifying the entry and stay of highly qualified citizens from countries outside the European Union and the Schengen area, the Ministry of Labour and Social Policies, together with the Ministry of the Interior, issued circular no. 2829 of 28 March 2024, containing some clarification on the new Consolidated Immigration Act.

Among the various changes, the introduction of additional subjective requirements aimed at identifying the “highly qualified” foreign workers, specifically referred to in the circular is of considerable importance. Currently, this definition includes not only the holders of a university degree, but also the holders of the professional qualifications provided for in the new Article 27-quater of the Consolidated Immigration Act, such as: (i) persons who have held a post-secondary level professional qualification for at least three years, (ii) persons who meet the requirements for the exercise of regulated professions, (iii) holders of higher professional qualifications attested by at least five years’ experience at a level comparable to tertiary level higher education qualifications, and (iv) managers and specialists in the field of information and communication technologies with higher professional qualifications attested by at least three years’ professional experience.

The Ministerial circular clarifies that satisfaction of the above requirements must be demonstrated at the time of submission of the application for authorisation for the EU Blue Card, by forwarding the diploma certificates issued by universities or non-university institutes at the end of the training course. In the case of professional qualifications, satisfaction of the requirements must be met through the presentation of contracts and/or payslips and the optional addition of a letter of experience drawn up by the previous employer, certifying that the worker has been employed for the time period provided for by the legislation, in the specific sector in which the worker will be employed in Italy.

In order to obtain the EU Blue Card, and in addition to the documentation referred to above, it will be necessary to submit a draft employment contract or binding offer for the highly qualified work activity for a period of at least six months and with an annual salary, shown in the draft or offer, that is not less than the remuneration provided for by the national collective bargaining agreement (contratto collettivo nazionale di lavoro, ‘CCNL’).

In addition, in point 4, the circular reiterates the worker’s rights and limitations on him/her, after he/she has obtained the EU Blue Card, namely:

• for the first 12 months of residence, he/she must carry out the highly qualified activity for which he/she has obtained the authorisation exclusively for the employer who made the request. It is possible to change employer within the 12 months’ period subject to authorisation from the Territorial Labour Inspectorate;
• during a period of unemployment, the worker has the right to seek and take up employment in accordance with Article 27-quater;
• he/she may, in parallel with the highly qualified activity for which he/she is employed, engage in self-employment, in accordance with the provisions of Article 27-quater, paragraph 13-ter.

When the highly qualified worker has obtained the authorisation and the entry visa from the Italian diplomatic corps in the country of origin, he/she has the right to work immediately upon arrival in Italy, even before being summoned to the Immigration Desk to sign the work permit employment contract (contratto di soggiorno). The employer must still send the mandatory prior notice of the establishment of the employment relationship (so-called “Unilav”).

In relation to the simplified procedure, the circular refers to the provisions of Article 27-quater, paragraph 8 of the Consolidated Immigration Act and provides that if the employer has signed with the Ministry of the Interior, after consulting the Ministry of Labour and Social Policies, a specific memorandum of understanding in which it guarantees the existence of the requirements for the application of the procedure, in that case the employer does not need to file a request for authorisation, but can instead file a draft employment contract or binding offer for the non-EU worker. In this case, the highly qualified worker will be issued a residence permit within 30 days of the notification, during which he/she will be able to stay in Italy and work.

A further change favouring international mobility within the EU concerns workers already holding a valid EU Blue Card issued by other Member States. These workers are allowed to enter and stay in Italy without a visa for work purposes for a maximum of 90 days within a total of six months, provided that they declare their presence in Italy to the Police Headquarters (Questura) within eight working days of entry.

If the holder of an EU Blue Card issued by a Member State has been legally resident in the same State for at least 12 months, he/she may enter Italy, without the need for a visa, to perform highly qualified work for more than 90 days, subject, in this case, to the filing of the request for authorisation. The period of legal residence in the other State required for entry into Italy is reduced to six months if the worker comes from a second Member State where he or she had already arrived in possession of an EU Blue Card issued by a first Member State.

Finally, the joint circular explains that holders of the EU Blue Card may apply for a family reunification authorisation, with the issuance, at the same time as the EU Blue Card, of a residence permit for family reasons, which can be converted into a residence permit for work (employed or self-employed) or for study purposes, if the requirements are met.

As set out at the outset, further changes have been made through Italian Decree no. 79 of 4 April 2024, issued jointly by the Ministry of the Interior, the Ministry of Tourism and the Ministry of Labour and Social Policies. With this decree, the ministries regulate the methods and requirements for entry and stay in Italy also of highly qualified workers identifiable as “digital nomads” and remote workers.

According to the aforementioned decree, “digital nomads” and remote workers are defined as workers –  self-employed in the first case, employees or collaborators in the second – who carry out highly qualified work through the use of technological tools that allow them to work remotely, independently or on behalf of companies, regardless of whether they are resident in Italy or not.

Continue reading the full version published on Norme e Tributi Plus Diritto del Il Sole 24 Ore.

For further information on this topic, see also:

• New social security agreements between Italy-Albania and Italy-Japan: updates 
• Cross-border workers: new agreement between Italy and Switzerland on taxes and remote working effective from 1 January 2024 (Norme e Tributi Plus Diritto – Il Sole 24 Ore, 14 February 2024 – Andrea di Nino, Valentino Biasi)
• National Labour Inspectorate: transnational posting and document retention burden – HR Capital

The Italian Revenue Agency, with its answer to request for ruling no. 89/E of 11 April 2024, returns to the issue of taxation applicable to gifts to employees.

The facts of the case

In the case in question, the company provided its employees with a free drink each day, a bag of coffee per month and was considering the possibility of giving employees promotional items, such as mugs or pins with the company logo, for parties or promotional launches. In the request for ruling, the applicant company clarified that the purpose of the gifts was in line with its corporate marketing strategy: firstly, to promote employees’ product knowledge to ensure better customer service and, secondly, to promote the company’s image on the market.

The Italian Revenue Agency’s decision

The Italian Revenue Agency, while recognising that the gifts in question are connected to the corporate strategy, considered that these gifts – although offered to all employees in the workforce regardless of their sales and work performed – satisfy the individual worker’s specific needs and, therefore, constitute his/her enrichment. The gifts, according to the Agency, cannot therefore be considered as payments made in the employer’s exclusive interest.

In light of this interpretation, if the value of the assets granted in the case in question exceeds the exemption limit for “fringe benefits” – generally equal to EUR 1,000 for 2024, raised to EUR 2,000 for workers with children who are dependent for tax purposes – the same will constitute employment income.

For more information about Fringe Benefits, see the article referred to below:

• 2024 Budget Law: employment initiatives – HR Capital

The European Directive 2022/2464/EU (Corporate Sustainability Reporting Directive), which came into force on 5 January 2023, is part of the European Green Deal and aims to promote transparency and disclosure of information by companies on the environmental, social and governance-related (ESG) impacts of their activities, through enhanced corporate reporting obligations. In this regard, the so-called ‘Relaunch Decree’ (Decreto rilancio) (Italian Decree-law no. 34/2020, converted into Italian Law no.77/2020) introduced the concept of ‘Mobility Management’ into our legal system, i.e. the promotion of sustainable mobility, as well as the management of private transport demand by changing user attitudes and behaviour.

The legislation currently applies to public bodies and private companies with more than 100 employees per location, with offices in cities with a high risk of air pollution, for which there is also an obligation to appoint a ‘Mobility Manager’ who to produce an annual ‘Home-Work Travel Plan’ for employees, aimed at reducing the use of individual private transport and better organising working hours to limit traffic congestion.

The question addressed to the Italian Revenue Agency

In this regard, the Italian Revenue Agency, a few months before the deadline for the implementation of the aforementioned directive, scheduled for 6 July 2024, has provided Answer no. 74/E of 21 March 2024 providing clarification on the possibility of using sustainable mobility services for the home-work-home commute as part of a company welfare plan, through the use of an App.

The question addressed to the Italian Revenue Agency concerned a company that was considering creating an App to enable employees to access sustainable mobility services, such as car-sharing, bike-sharing, scooter-sharing, electric scooters and others. The App would be used for home-work-home commutes, to optimise and reduce, in terms of environmental sustainability and greater road safety, the social costs and individual transport costs linked to the employees’ commute. In line with these purposes, the applicant clarified that sharing services should only be used where the place of work is in urban or metropolitan areas, allowing the transport to be shared with other users. Charging the use of services to the employer and setting a ceiling for expenditure would allow the quantification of usage and ensure that it would be limited to the home-work-home commute.

The applicant’s question concerned the possibility of including the use of the App, granted to categories of employees or to the majority of employees, among the welfare initiatives excluded from taxation under Article 51, paragraph 2, letter f) of the Italian Income Tax Consolidation Act (Testo unico delle imposte sui redditi, ‘TUIR’).

In its reply to the applicant, the Italian Revenue Agency set out the guidelines to be followed so that services granted to employees can be excluded from employee income in accordance with the provisions of Article 51, paragraph 2, letter f) of  TUIR.

Conditions for the implementation of welfare plans

The Agency pointed out for the exclusion from employee income to apply, the benefits and services granted to employees must firstly (i) be granted to the majority of employees or categories of them, (ii) relate exclusively to disbursements in kind and not to disbursements in lieu of money, and (iii) pursue the specific social utility purposes referred to in Article 100, paragraph 1 of TUIR. In addition, employees using the services must be totally unconnected to the financial relationship between the company and any third-party service provider.

The Italian Revenue Agency had provided guidelines on this point in the past with answer no. 461 of 31 October 2019, confirming that the provisions of Article 51, paragraph 2, letter f) of TUIR also included benefits in kind granted to employees through the company car-pooling service, which could be used through an IT platform and was provided by the employer through a specific contract with a third party. The aim of the service was, in fact, to reduce social and individual costs related to the home-work-home commute, while at the same time increasing employees’ punctuality with respect to working hours and promoting socialising, which also benefitted company work productivity. 

In line with the position already confirmed, the Italian Revenue Agency therefore reiterated that where an employer provides its employees with an App for accessing sustainable mobility services for the home-work-home commute, as part of a corporate welfare plan, this falls within the purposes of ‘social utility’ identified by Article 100, paragraph 1 of TUIR, and that such services may be considered non-taxable in accordance with the provisions of Article 51, paragraph 2, letter f) of TUIR provided that the conditions described above are fulfilled.

On 22 March 2024, Confcommercio, Filcams Cgil, Fisascat Cisl and Uiltucs Uil signed the agreement to renew the National Collective Bargaining Agreement (contratto collettivo nazionale di lavoro, ‘CCNL’) for employees of Tertiary, Distribution and Services Companies, effective from 1 April 2023 to 31 March 2027.

Leave for women who are the victims of abuse

In addition to wage increases and benefits such as supplementary health care and permanent contracts, the agreement addresses the increasingly topical issues of gender equality, fair distribution of family burdens, and support for women who are victims of gender-based abuse.

In this regard, implementing Article 24 of Italian Legislative Decree no. 80/2015, Article 16-bis of the new agreement recognises the right of female employees of public or private employers included in ‘protection pathways’ related to gender-based abuse to take leave from work for a maximum period of 90 days. For the purposes of exercising this right, the employee, except where it is objectively impossible, is required to give the employer at least seven days’ notice and, furthermore, to produce the certification confirming her inclusion in the pathways in question.

During the leave period, the woman is paid an allowance corresponding to her last salary, paid in advance in her pay packet by the employer on behalf of the Italian National Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) (in line with the payment of maternity benefits).

The period of leave is taken into account for the purposes of accruing seniority, holidays, and for the purposes of accruing additional months’ pay and severance pay (trattamento di fine rapporto or T.F.R.).

Leave for women who are victims of abuse may be taken, over a three-year period, on a daily or hourly basis (the latter is allowed at half the average daily working hours for the month immediately preceding the month in which the leave starts).

If further conditions are met, the leave period may be extended for a further 90 days, with entitlement to payment of an allowance equal to 100% of the current salary.

In addition, the employee has the right to change her employment relationship from full-time to part-time, and both vertically or horizontally within the organisation, and also to apply for a transfer to another place of work, even if located in another municipality.

Parental leave

To promote gender equality as well as the fair distribution of family burdens, the parties to the agreement agreed new provisions on parental leave.

In particular, it should be remembered that, to reconcile workers’ rights with the company’s organisational needs, Italian Legislative Decree no. 151/2001 (the Consolidated Law or Testo Unico, ‘TU’) introduced a notice period under which, to take the leave, the parent is required to give his or her employer at least 15 days’ notice.

In the new agreement renewing the CCNL Commerce, this notice period has been reduced to five days, unless this is objectively impossible.

Finally, it should also be noted that, under Article 34 of Italian Legislative Decree no. 151/2001, both working parents are entitled to the period of parental leave which may be shared between them. This leave may be taken during the first 12 years of the child’s life and may not exceed a total of 10 months, which may be increased to 11 months if the working father uses the leave for a period of at least three months.  

Currently, the period for which the working parent will receive their salary is nine months: in the first month the parent will receive 80% of salary and in the second 60% (increased to 80% for 2024 only) provided that:

• the leave periods are taken after 1 January 2024;
• the leave is taken before the child is six years old; 
• the period of maternity or, alternatively, paternity leave ended after 31 December 2023. 

Otherwise, the parent will receive 30% of salary for the remaining period.

On 22 March 2024, Confcommercio, Filcams Cgil, Fisascat Cisl and Uiltucs Uil announced that they had signed the agreement to renew the National Collective Bargaining Agreement (contratto collettivo nazionale di lavoro, ‘CCNL’) for employees of Tertiary, Distribution and Services Companies. Among the changes to the new contract, applicable from 1 April 2023 to 31 March 2027, there is a salary increase connected to the various levels and divided for each year of the CCNL’s term; the first tranche of the increase will be paid from April 2024.

In addition, provision has been made for the payment of a lump sum, also linked to the various levels, which is to be paid in two equal tranches in July 2024 and July 2025. This amount will be attributed according to the length of the employment relationship as well as the actual work provided in the period from 1 January 2022 to 31 March 2023.

In addition to salary increases, in compliance with the provisions of Italian Decree-Law no. 48/2023 (the so-called “Employment Decree”), the parties to the CCNL intervened on the issue of fixed-term employment contracts, identifying the reasons that allow their use for more than 12 months.

Finally, particular attention was paid to the issues of gender equality and the fight against abuse against women through the provision of simplifications on the methods of taking parental leave and, also, through the provision of specific leave for women who are the victims of abuse.

On 26 March 2024, Andrea Di Nino will participate, as a speaker, in the webinar organised by AISOM entitled: “Expats and Reversing Brain Drain”.

FOCUS

The following topics will be covered during the webinar:

• Contributions in more than one EU Member State: the provisions of the EC Regulations;
• Changes for workers in countries which have signed a convention with Italy and countries that have not;
• International aggregation and contributions purchase: useful tools for obtaining a pension;
• The ‘case’ of Great Britain[ED1] ;
• Foreign supplementary pensions;
• Transfer/Liquidation and taxation Applied.

You can find all the information you need to register for free at this link.

Italian Decree-Law no. 19/2024, published in the Italian Official Gazette no. 52 of 2 March 2024, amended the regulations which had applied since 1 July 2007 – following the entry into force of Italian Law no. 296/2006 (the 2007 Budget Law) – in relation to the Certificate of Contributions Compliance (Documento Unico di Regolarità Contributiva, ‘DURC’) and the use of the contributory and regulatory benefits subject to it.

The first relevant change affects Article 1, paragraph 1175, of Italian Law no. 296/2006, with respect to which the regulations provided for the possibility of benefiting from regulatory and contributions’ relief in the field of employment and social legislation only subject to the employer’s possession of the DURC, without prejudice to the other legal obligations and compliance with the multi-level applicable agreements and collective agreements, entered into by the most representative employers’ and workers’ trade unions at national level.

In addition to what was previously provided for, the new provision expressly emphasises what was already partly and implicitly indicated in paragraph 1176 which referred to irregularities in the safeguarding of working conditions that are not considered to be an obstacle to the issuance of the DURC itself, i.e. there must not be any breaches of employment and social legislation, including the absence of breaches relating to the safeguarding of working conditions and health and safety in the workplace, as identified by a specific decree of the Italian Ministry of Labour and Social Policies.

New paragraph 1175 bis, highlights the condition precedent generated by the DURC being non-compliant, confirming the right to receive the benefits provided for in paragraph 1175 in the event of compliance with the contribution and insurance obligations and remedying the ascertained breaches referred to in the same paragraph 1175, within the terms provided for by the supervisory bodies. An exception is made for administrative breaches that cannot be remedied, for which the recovery of the benefits granted may not be more than double the amount of the penalty for non-compliance.

The introduction of the new paragraph is of considerable importance: it appears to try to overcome the difficulties encountered to date in non-compliant companies’ use of contribution benefits, granting, on the one hand, those who proceed to regularise their contribution and insurance position and health and safety breaches within the specified deadlines the possibility of continuing to enjoy them, and, on the other hand, in the case of administrative breaches which cannot be remedied, the recovery of the benefits paid out to which the companies concerned will be subject will not be more than double the penalty.

In resolution no. 59/E/2024, the Italian Revenue Agency (Agenzia delle Entrate) clarified the application of tax relief for performance bonuses under Article 1, paragraph 182 of Italian Law no. 208 of 2015, with specific reference to the requirement of improved performance against company targets.

Article 1, paragraphs 182 to 189 of Italian Law no. 208 of 2015 (the “2016 Budget Law”) provides for the application of a tax substituting personal income tax (imposta sul reddito delle persone fisiche – IRPEF) and related regional and municipal surcharges on “variable performance bonuses, the payment of which is linked to increases in productivity, profitability, quality, efficiency and innovation, which are measurable and verifiable on the basis of the criteria defined by the decree referred to in paragraph 188”. This substitute tax is 10%, up to a maximum of EUR 3,000 gross.

Italian Law no. 197 of 29 December 2022 (the “2023 Budget Law”) subsequently amended this provision with Article 1, Paragraph 63, which stipulates that for bonuses and amounts paid during 2023, the substitute tax rate is reduced to 5%. Similarly, Italian Law no. 213 of 30 December 2023 (the “2024 Budget Law”) extended the application of the provision for bonuses and amounts paid during 2024; therefore, the 5% rate applies to these amounts for the current year as well.

With regard to the performance criteria to which the company objectives for the payment of performance bonuses must be anchored, the decree of the Ministry of Labour and Social Policies of 16 March 2016 refers to the definition in the company or area collective bargaining agreement, which must contain “criteria for measuring and verifying increases in productivity, profitability, quality, efficiency and innovation, which may consist in an increase in production or savings in production costs or in the improvement of the quality of products and processes, including through the re-organisation of non-overtime working hours or the use of remote work as a flexible way of carrying out the employment relationship, with respect to a reasonable period defined by the agreement, the achievement of which can be objectively verified through specifically identified numerical or other indicators”.

Therefore, the improved performance must be “measurable and verifiable”, and consequently it is necessary to identify criteria for measuring the achievement of improved performance through objectively verifiable numerical (or other) indicators identified for this purpose.

In view of the above, for the purposes of applying the substitute tax, it is necessary that, over a period of time defined in the agreement, improved performance in at least one of the objectives of productivity, profitability, quality, efficiency and innovation mentioned above is found and, in addition, that this improvement can be verified and measured.

In this regard, Circular no. 5/E of 2018 clarified that to qualify for the tax relief, it is sufficient that the company achieve an improvement in only one of the productivity, profitability, quality, efficiency and innovation objectives identified in the contract, within an appropriate period predefined by the parties.

The Circular also clarified that “appropriate period” means the accrual period of the performance bonus, or the time period identified by the agreement at the end of which the improved performance against the objectives must be verified. The duration of the appropriate period is left to the second-level bargaining agreement and may be annual, mid-year or multi-year.

The resolution of 19 October 2018, no. 78/E, later clarified that – for the purposes of applying the tax benefits – it does not appear to be sufficient that the objective set by the second-level bargaining agreement is achieved, it is also necessary that the company’s performance has improved compared to its performance prior to the beginning of the bonus accrual period.

In the question considered by the Italian Revenue Agency’s resolution of 5 March 2024, clarification was sought on the tax regime applicable to the amounts paid as a performance bonus in view of the reduction in the number of holidays days untaken as of 31 December compared to the previous year (resulting in a reduction in the related business cost). In this circumstance, however, the “holiday parameter” criterion, while objectively achieved, was not explicitly stated in the company’s supplementary agreement as a condition for bonus payment.

In fact, the supplementary agreement made payment of the performance bonus conditional not on the achievement of improved performance, but on the attainment of stipulated figures, consisting partly of “collective company objectives” and partly of “functional/individual objectives”, without therefore providing for any verification of the attainment of improved performance.

In conclusion, the Italian Revenue Agency – with the answer under discussion – ruled that in this case the performance bonus is not eligible for the tax relief, as:

“The rule under consideration requires (…) that the following conditions concurrently exist:

1. the achievement of set goals is linked with payment of the bonus;
2. improved performance compared with that recorded in the previous year is verified and measured.

These conditions are not fully met by all the objectives outlined above.”

According to research by HR Capital, in 2023 remote working was adopted by 60% of companies with more than 50 employees and an internal HR structure (-15% vs 2022).  In less structured companies, the percentage drops below 40%.

Milan, 12 March 2024 – The possibility of working remotely has now established itself as one of the useful factors in making the workplace more attractive, both in attracting new talent and retaining those already in force. Remote working is now perceived by workers as a way of working that promotes both a work-life balance and, at the same time, a work ethic based on objectives. 

After initial and widespread use of remote working– a consequence above all of the pandemic and post-pandemic landscape, during which the possibility of working remotely five days a week was often guaranteed – today, however, we seem to be witnessing a slowdown, if not an actual halt, in the use of this tool.  

This is the picture that emerges from research by HR Capital – a subsidiary of De Luca & Partners and leader in outsourced personnel management and administration services – on the current state of remote working policies by employers.  

According to the study¹, conducted by HR Capital on client companies, in 2023 60% of the most structured companies – i.e. with a workforce of at least 50 people and a department dedicated to human resources – now allow remote working. Among those that are less structured – i.e. that do not meet the conditions mentioned above – the percentage drops below 40%. Both values are down compared to 2022, with a more marked decline for large companies (-15%). 

Despite the affirmation of remote working in the employment field, compared to previous years, the numbers therefore record a slowdown in the advance of its use: from the immediately post-pandemic period to today, in fact, remote working has often been regulated in a restrictive way, especially in large companies – the same ones that had initially made greater use of it. 

“The data show how the entrepreneurial culture of our country still tends to consider the possibility of working from home as an alternative tool to the use of holidays and permits or as a normal additional benefit, without taking into account the advantages that, in practice, can derive from it, including the reduction of costs for the company, the well-being of workers and the possibility of increasing their productivity”, notesAndrea Di Nino, Employment Consultant at HR Capital. “The research”, Di Nino continues, “has also underlined that the latest provisions aimed at workers with children and, even more so, those aimed at so-called vulnerable workers have proven to be complicated to manage from an operational point of view, often increasing the mistrust of companies that are less structured with respect to this tool”.  

The regulatory framework of reference in the Italian legal system is Italian Law no. 81/2017, which considers remote working to be a specific way of performing work, based, among other things, on the alternation between ‘face-to-face’ and remote work. The use of remote working is subject to the signing of an agreement between employer and employee and, in this regard, Article 23, first paragraph of the same law provides that the employer must provide electronically to the Ministry of Labour and Social Policies the names of the workers who will work remotely, as well as all the related details, through the special ‘Servizi Lavoro’ (Work Services) platform. 

On the subject, in recent years, there have been a number of legislative interventions (most recently, the conversion into law of the so-called “Milleproroghe Decree”) which have further extended some of the ‘emergency’ rules established by the COVID regulations. In particular, the right to remote working has been extended to workers with children under 14 years of age until 30 June 2024, as well as for workers who, based on the assessment of the company doctor as part of the exceptional health surveillance introduced during the COVID period, are more exposed to the risk of contagion from the virus (so-called ‘vulnerable workers’).

Press release:

Labitalia – Adnkronos Group

On 10 and 11 April 2024 we will participate, as exhibitors, in the Global Summit Human Resources, the b2b event that brings together the human resources business community and HR digital transformation.

On 11 April, Andrea Di Nino will speak at the conference entitled: “Corporate welfare: opportunities to be seized by companies and workers”. During the speech, our Employment Consultant will delve into the sector regulations, essential to exploit the full potential of this area and avoid its risks.

Set out below is the full interview given by Davide Di Paola, Sales Manager at HR Capital, highlighting and examining the future challenges for the Payroll world and beyond.

What do you expect from this event?  
We are excited to participate in GHRSummit24, a very important and national event dedicated to the HR world. It will be an opportunity to broaden knowledge related to human resources and exchange views and grow with leading market players. We will also be making our contribution, sharing our experience and know-how with all participants; HR Capital has been supporting companies in HR consulting and high-end HRO services for almost 40 years. Thanks to a multidisciplinary team, we offer comprehensive payroll and HR compliance management.

Why is it useful to outsource payroll, and what are the potential future challenges?  
In the current economic context, increasingly oriented towards the optimisation of resources and process efficiency, with an eye also on risk management, the outsourced payroll services sector is experiencing exponential growth. According to recent research carried out by Research and Markets, within the next 7 years there will be a major expansion of the sector globally, from $25.3 billion in 2022 to $37.3 billion in 2030 (+47%). This boom is motivated by companies’ need to save time and costs, allowing them to focus on strategic areas. We present ourselves to the market not as a service provider, but as a strategic partner, capable of accompanying the company in this transformation process. 

How do you plan to support companies in an increasingly technological and evolving context? 
The payroll industry is constantly evolving and requires constant updating. To optimise personnel management, both from an administrative and organisational point of view, companies can adopt three key approaches: automation, reducing resources dedicated to repetitive and time-consuming activities, digitisation, through the transformation of paper processes into electronic workflows, and simplification, choosing more user-friendly platforms. Technology has always been part of our DNA: this is why we have created KenDL, a digital system for the so-called Knowledge Management, the hub that collects all our company’s know-how. For client support, we provide a web platform that allows the entire data management process to be carried out through the use of a single innovative, simple and straightforward tool. 

Why should a #GHRSummit24 participant visit your stand?  
Our approach is always proactive and aimed at anticipating the needs of the market with a wide and customisable range of services: this is why we guarantee a contact person and a dedicated team that supports the company in all human resources management activities. 

At HR Capital we assist companies in the management and administration of personnel, including through collaborating with professionals registered in the Register of Employment Consultants. This is a strategic choice that we have always pursued, believing that the integrated approach and specialisation are an added value for our clients.  With this in mind, we are pleased to have a well-established partnership with Studio De Luca & Partners, a leading law firm that deals exclusively with Employment Law, privacy compliance (GDPR) and corporate administrative liability (Italian Legislative Decree no. 231/01). There is a long-standing tradition of integrated collaboration with the Firm, which constitutes a real ‘one stop shop’ for all employment law and human resources management matters. 

You can find all the information about the event at this link.

On 21 March 2024, HR capital participated in the ninth edition of the HR INNOVATION FORUM, the first exhibition in Italy of the main Product and Process Innovations for Talent Management.

A full day of in-depth analysis of the most important trends in the sector entirely dedicated to managers and HR professionals.

FOCUS
Many topics were addressed, including welfare, a theme explored by Andrea Di Nino in the article written for the forum, entitled: “Remote working and welfare: useful tools for well-being at work – handle with care”.

THE EDITORIAL
The historical events of recent years, starting with the pandemic, have greatly influenced the employment market. During the ‘great resignation’, the difficulties for companies in finding and retaining talent has gradually led HR operators to rethink the concept of work and remuneration, focusing in particular on the impact of work on private life, the work-life balance. Among the tools most widely used to improve the corporate climate and well-being at work, remote working and corporate welfare plans stand out.  

Remote working, regulated under the Italian legal system by Italian Law no. 81/2017, has been widely used since the pandemic. It allows the organisation, planning and localisation of work in a ‘hybrid’ mode, i.e. alternating the presence in the office with remote performance by the worker.

The potential to work remotely is also increasingly a subject of negotiation in the recruitment of talent: in addition to the financial and contractual conditions of employment, in fact, more and more companies are offering remote working as an attractive benefit.

In any event, to permit remote working it is necessary to consider multiple obligations, provided for by the aforementioned legislation and relating to the regulation of the remote employment relationship itself, health and safety at work and the obligations to provide employment details to the authorities. The regime under which some derogations deriving from the COVID emergency legislation have been continually extended has not helped to give certainty to employers.

Correctly navigating these obligations is a challenge for many companies, which do not always possess the necessary tools, just as the approach to the topic of remote working is not always easy from a cultural point of view. Mistakenly, for example, remote working is often used interchangeably with ‘working from home’ or ‘teleworking’, whereas it differs from teleworking through the flexible alternation between working from the company’s premises and working remotely – not necessarily understood as the employee’s ‘home’.

An important and additional tool used by companies to improve the corporate climate, as well as attract and retain talent is the planning of a corporate welfare system.

Implementing a corporate welfare plan consists of ensuring the disbursement of a certain amount of remuneration in kind, in the form of goods and services, to its employees and, where permitted, their family members. The tax rules in force provide that – under certain conditions – the goods and services covered by corporate welfare can be exempt from taxes and contributions (both for the beneficiary workers and for the employer), even up to total exemption.

However, the attractiveness of this tool is partially undermined by factors such as the ‘hidden’ costs related to it (e.g. expert advice, the fees charged by platforms, etc.), the lack of interest on the part of staff or managers, trade union opposition and, above all, the objective complexity of the regulatory framework. Consequently, this tool is difficult to access, in particular, for micro and small enterprises, which make up the majority of the Italian entrepreneurial sector.

With regard to regulation, it should be noted that welfare can give rise to undesirable and unforeseen tax effects: for example, if fringe benefits exceed the tax exemption limit by even a single Euro, the entire value of the fringe benefits received by the employee in the year become taxable. The continuous changes and differentiations that the legislator has made in recent years to the exemption limit have not helped to clarify it, discouraging its use. For 2024, the limits have been set at EUR 1,000 for all workers, raised to EUR 2,000 for those with children who are dependent for tax purposes, but the measure lacks permanence as it is valid only for the current year.

Remote working and welfare plans, ultimately, are valid means to implement concrete policies based on well-being in the company; much could still be done, however, with respect to the cultural and regulatory approach to these tools.

Here is the link with all the information about the event.

Reverse brain drain: from 2024 the new “restricting” legislation on requirements, as explained to Adnkronos/Labitalia by Andrea Di Nino, employment consultant at HR Capital.

“Italian Legislative Decree no. 209/2023 made important changes to the regulations concerning the tax relief regime for “impatriated” workers as well as imposing restrictions on the operation of the regime. In particular, the new Decree’s provisions entirely replace the original regulations, introduced by Article 16, paragraph 1 of Italian Legislative Decree no. 147/2015”, he explains. The expert continues, “Among the various new provisions is that only 50% of income from employed and assimilated work and income from self-employment produced in Italy by workers who transfer their tax residence there contribute to total income, up to a maximum annual limit of EUR 600,000.
This tax relief may be applied for a maximum of five tax periods”.
Mr Di Nino further underlines that “Particular conditions have been introduced for the application of the favourable tax regime, namely that the tax payer must have had his/her tax residence abroad in the three tax periods preceding the transfer to Italy, he/she must undertake to maintain his/her tax residence in Italy for at least four tax periods following the transfer itself and to carry out his/her work activity mainly within Italy. A further important condition is that, in addition, the tax payer must meet the ‘high qualification or specialisation’ requirements, for which the law refers to Italian Legislative Decree no. 108/2012 and Italian Legislative Decree no. 206/2007”, he adds.

“The regime applies even if, following the transfer to Italy, the worker continues the employment relationship with the same foreign employer or within the same group of companies. In these circumstances, the minimum period of previous foreign tax residence is raised to six or seven tax periods”. “In detail, the minimum foreign tax residence must be: six tax periods, if the worker, before moving abroad, has not previously been employed in Italy for the same company or for a company belonging to the same group; seven tax periods, if the worker, before moving abroad, was employed in Italy for the same company or for a company belonging to the same group”, he concludes.

On 28 February 2024, Italian Law no.18 of 23 February 2024 was published in the Official Gazette no. 18, converting into law, with amendments, Italian Legislative Decree no. 215 of 30 December 2023 (so-called “Milleproroghe Decree”), containing urgent provisions regarding regulatory deadlines. 

A significant innovation contained in the conversion law concerns fixed-term contracts: in particular Article 18, paragraph 4-bis of the Law in question extends from 30 April 2024 to 31 December 2024 the employer’s and worker’s ability to identify the technical, organisational or production needs necessary to exceed the overall 12 months of duration of the employment relationship. 

In addition, the right of so-called “vulnerable” workers to work remotely is extended from 31 March 2024 to 30 June 2024, including through assignment to a different task included in the same category or classification area. This extension also applies to parents employed in the private sector who have at least one child under the age of 14, provided that in the family unit there is no other parent benefiting from income support tools in the event of suspension or termination of the work activity or that there is no non-working parent, and on the further condition that remote working is compatible with the work to be provided. 

Il 27 febbraio Vittorio De Luca e Andrea Di Nino hanno partecipato al workshop organizzato da ELITE “Le risorse che fanno l’impresa: il legame tra qualità organizzativa e il raggiungimento degli obiettivi strategici”.

IL PROGRAMMA

09:00 Registrazione dei partecipanti e welcome coffee

09:30 Apertura dei lavori

09:45 Employee Value Proposition come chiave per motivare e coinvolgere i talenti

10:30 Corporate Wellbeing Strategy: le dimensioni chiave per creare cultura del benessere in azienda, assicurandosi allineamento con gli obiettivi strategici A cura di De Luca & Partners

11:15 Pausa caffè

11:30 Il valore dei programmi benefit per la talent retention

12:00 Biase consapevolezza: verso la leadership inclusiva

12:45 Pausa pranzo

14:00 Incorporare le misure DE&I nelle strategie aziendali, creando obiettivi misurabili

14:45 Inclusion (e non diversity) management: la valorizzazione di tutte le diversità. Vivere la DE&I dentro e fuori l’azienda – un’intervista

15:45 Chiusura dei lavori

The international mobility of workers within Europe is regulated by EU regulations no. 883/2004 and 987/2009. Outside the scope of application of these regulations, bilateral social security agreements entered into by Italy with other States, if any, apply.  

These agreements regulate important aspects of the international mobility of workers from the point of view of social security legislation, such as the payment of social security contributions and the social security and welfare benefits to which workers themselves are entitled.  

In the absence of a bilateral agreement of this type, the worker abroad remains exposed to the double payment of contributions – with the related impact also on his/her Italian employer, if any – as well as to uncertainty about the social security and welfare benefits obtainable in the foreign country and to the impossibility of claiming periods of work abroad for pension purposes in Italy. 

In terms of bilateral agreements on social security, 2024 has already brought substantial changes with respect to countries that have significant economic relations with Italy, namely Albania and Japan. 

The Social Security Agreement between Italy and Albania  

On 6 February 2024, the Social Security Agreement between Italy and Albania was signed, which will regulate pension benefits and unemployment, sickness and maternity benefits for those who have been employed or self-employed in the two countries. 

Following the signing of this agreement, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) together with the Ministry of Labour and Social Policy will start negotiations to conclude a bilateral administrative agreement, to implement the agreement that has been reached.  

The agreement does not cover health, occupational disease and accident benefits nor non-contributory benefits.  

In a press release the governments of the two countries also expressed their willingness to strengthen cooperation in the economic field and to protect social security for their citizens.  

The Social Security Agreement between Italy and Japan 

In a statement published on 16 January 2024, the Italian Ministry of Labour and Social Policy shared the news that from 1 April 2024 the Social Security Agreement between Italy and Japan, signed on 6 February 2009 and ratified by Italian Law no. 97/2015, will come into force. 

The main change that will be brought about by the entry into force of this agreement is that it will allow the workers of the two posting States to avoid the burden of double contributions for a maximum period of five years. In particular, Article 7 of Annex 1 of Italian Law no. 97/2015, which regulates international postings, establishes that “if a person subject to the legislation of a contracting State, who works in the contracting State for an employer established in that State, is sent by that employer from that State to work in another contracting State, then such person is subject only to the legislation of the first contracting State as if he or she were employed in the first contracting State, provided that the period of posting does not exceed five years”. 

The agreement also regulates the right to the portability of pension benefits for nationals of the two States and their family members, the principle of equal treatment and the principle of lex loci laboris (i.e. a person employed in a contracting State is subject to the legislation of that State), by providing for the relevant derogations.  

At the time of the signing of the agreement, Japan was the only G8 and G20 country with which Italy had not yet finalised the position on social legislation and applicable legislation. 

With circular no. 2/E/2024, the Italian Revenue Agency clarified the implementation of Italian Legislative Decree of 30 December 2023, no. 216, i.e. the decree implementing the first phase of Italian personal income tax (imposte sul reddito delle persone fisiche, ‘IRPEF’) reform and other measures on income taxes.  

Reform of the tax brackets 

The Legislative Decree in question implements certain principles and directive criteria of Italian Law of 9 August 2023, no. 111, entitled “Delegation to the Government for tax reform”. 

Article 1, paragraph 1 of the decree introduces significant changes in the field of personal income tax and, for the 2024 tax period only, applies new rates and income brackets for determining gross tax. 

With respect to the framework contained in Article 11, paragraph 1, of Italian Presidential Decree no. 917/1986 (the Italian Income Tax Consolidation Act – Testo unico delle imposte sui redditi, ‘TUIR’), there is therefore a reduction from four to three income brackets and the corresponding rates; in particular, for 2024, the gross tax is calculated by applying the following rates: 

• 23% for up to EUR 28,000; 
• 35% for EUR 28,000 to EUR 50,000; 
• 43% from EUR 50,000. 

Tax deductions and allowance 

Moreover, for the year 2024, the deduction provided for by Article 13, paragraph 1, letter a) of TUIR has been raised from EUR 1,880 to EUR 1,955 for the recipients of employment income with the exclusion of pensions and/or similar allowances – referred to in Article 49, paragraph 1, of the TUIR – and certain assimilated income if its total value does not exceed EUR 15,000. 

This provision, set out in paragraph 2 of the same Article 1, therefore increases the amount of income excluded from taxation (the “no tax area”) to EUR 8,500 for recipients of employment and assimilated income, bringing it into line with the provisions already in force for pensioners. 

In this regard, the Italian Revenue Agency clarified that the amendment concerns only the first sentence of Article 13, paragraph 1, letter a) of the TUIR, and therefore the other provisions governed by the same article remains unaffected. 

Article 1, paragraph 3, of the Decree amends, for the 2024 tax year, the prerequisite for the granting of allowance under Article 1, paragraph 1, of Italian Decree-Law no. 3/2020. It is provided that, for taxpayers with a total income of no more than EUR 15,000, the relief is granted on the condition that the gross tax is higher than any deduction due minus EUR 75 in relation to the period of work in the year.  

Important changes have also been introduced for taxpayers with a total income of more than EUR 50,000, with respect to which Article 2 of the Decree provides for the reduction of EUR 260 in the amount of the deduction from the gross tax due for the year 2024. 

On 1 January 2024 important changes were introduced to the relationship between Italy and Switzerland relating to the tax legislation applicable to cross-border workers, and to the guidelines relating to remote working.

Historically, cross-border work between Italy and Switzerland has been regulated by the Agreement signed in Rome in 1974 (‘1974 Rome Agreement’)and, also, by the Convention against double taxation of 1976 (the ‘1976 Convention’), still in force between the two countries.

These agreements establish that the wages, salaries and other elements forming part of the remuneration that a cross-border worker receives as consideration for an employed activity are taxable only in the State in which such activity is carried out. For these purposes cross-border worker is generally understood as an employed or self-employed worker who carries out his or her activity in a State other than the one in which he or she resides, and who returns to the State of residence, in principle, daily or at least once a week.

However, technological development and, above all, the Covid emergency have changed the traditional scenarios, requiring both Italy and Switzerland to deal with widespread  remote work which, unlike in the past, it is no longer necessarily carried out at the company premises and, in as far as is relevant for these purposes, no longer involves daily cross-border travel.

On 1 January 2024, following the entry into force of Italian Law no. 83/2023 implementing the agreement of 23 December 2020, important changes were introduced to the relationship between Italy and Switzerland relating to the tax legislation applicable to cross-border workers, and to the guidelines relating to remote working as well.

The new tax measures applicable to cross-border workers

With the entry into force of Italian Law no. 83/2023, the process of reviewing the agreements between Italy and Switzerland concerning the cross-border work regime, started by the aforementioned protocol of 23 December 2020, was concluded. The new agreement, formalised by the aforementioned law, amends the 1974 Rome Agreement and the 1976 Convention to reflect the new terms reached between the two countries.

The new provisions agreed between Italy and Switzerland – which entered into force on 17 July 2023, but took effect from 1 January 2024 – concern the definition of cross-border work and the tax regime applicable to the work income earned by the persons concerned. The two countries have agreed that the agreement provisions are subject to review on a five-yearly basis.

In detail, the definition of cross-border worker has been revised by the new agreement and covers any worker resident in a contracting state who is domiciled for tax purposes in a municipality which is totally or partially in the 20 km area from the border with the other contracting State. The border areas covered by the agreement are, for Switzerland, the cantons of Grisons, Ticino and Valais, and, for Italy, the Lombardy, Piedmont and Valle d’Aosta regions and the autonomous province of Bolzano.

To be considered a cross-border worker, the worker must work in the above-mentioned border areas of the other State and return, in principle, to his or her main domicile in the State of residence on a daily basis. The worker retains this statusif he or she does not return to his or her home, for professional reasons, for a maximum of 45 days in a calendar year, excluding holidays and sick days.

For tax purposes, the new agreement provides a distinction between “old” and “new” cross-border workers. A worker is an “old” cross border worker if he or she was a cross-border worker on 17 July 2023 or carried out work in the border area in the period between 31 December 2018 and 17 July 2023. The rules of the previous version of the agreement, which provide for exclusive taxation in the country in which the work is carried out if the worker resides within 20 km of the border between the two States, continue to apply to “old” cross-border workers.

With respect to “new” cross-border workers (i.e. workers who are classified as cross-border workers starting from 17 July 2023), the shared taxation criterion applies.

Therefore, the State where the work is carried out will deduct withholding tax on the income earned by the individual, up to a maximum of 80% of the amount due based on the provisions on personal income taxes, including local taxes.

The worker’s State of residence will also subject the same income to taxation, guaranteeing the elimination of double taxation according to the rules established by the tax convention in force between the two countries (specifically, recognising a credit equal to the taxes paid in the State where the work is carried out or guaranteeing an exemption with respect to the income subject thereto).

Changes relating to remote working

As a result of the provisions which came into force on 1 January 2024, cross-border workers between Italy and Switzerland may carry out their work remotely at their home and up to the threshold of 25% of the working hours, without this having any impact on the relevant tax regime.

Read the full version in Norme e Tributi Plus Diritto of Il Sole 24 Ore.

On 31 January 2024, with circular no. 27/2024, the Italian National Social Security Entity (Istituto nazionale della previdenza sociale, ‘INPS’) provided guidelines and instructions relating to the use of the exemption of 100% of the share of social security contributions payable by working mothers for the pay periods from 1 January 2024 to 31 December 2026, up to a maximum limit of EUR 3,000 per year, to be allocated pro rata on a monthly basis, introduced by the 2024 Italian Budget Law.

The exemption is granted to working mothers of three or more children – employed on a permanent contract – up to the month of the youngest child’s eighteenth birthday.

To access the exemption in question, the circular specifies that female workers must send their employer a declaration containing the number of children and their tax codes. Alternatively, INPS provides a special application form that the worker can fill in and send directly to it.

The contribution exemption also applies to working mothers of two children, up to the month of the youngest child’s tenth birthday, limited to pay periods from 1 January 2024 to 31 December 2024.

Finally, the circular specifies that the mother is eligible for the exemption at the time of the birth of the third child (or, only for 2024, of the second). Moreover, if one of the children leaves the family unit or does not live with the mother or is in the sole custody of the father, there is no forfeiture of the right to benefit from the contribution reduction in question.

At our last Team Meeting, among other topics, we explored the complex issue of tax and social security treatment applicable to shares granted to employees and the quantification of their value for the purposes of calculating employment income.

If you want to learn more about this topic, request our slides here.

HR Capital has always worked with the aim of offering a workplace where people can develop their talent: we believe in the sharing of skills and constant training, fundamental drivers for the employees’ growth.

For this reason, we decided to participate in the 2023 survey by Great Place to Work® Institute Italia to assess our Company business environment and obtain the Great Place to Work® certification.

We are proud of this certification which provides further confirmation of the path taken in promoting the well-being of our workplace and in the constant development of our people. 

Here are some of the reasons why HR Capital is a Great Place To Work®, in the words of our employees: 

“Great attention is paid to both the needs and growth of individuals and the continuous improvement of processes. In addition, every idea or initiative can be discussed, shared and implemented”.

“We work as a team, for real, not just on paper. This value is always defended by our manager, regardless of the situation. It’s something that comes first here and means that there is always a great atmosphere among colleagues”. 

Click here to visit our firm’s profile on the Great Place to Work website.