Green Light from the European Commission for Youth and Women Employment Incentives

On January 31, 2025, the Italian Ministry of Labor announced via its official website that the European Commission has approved two measures aimed at boosting employment for young people and women. This approval paves the way for the implementation of the “Youth Bonus” and “Women’s Bonus”, which are part of the “Cohesion Decree” (Articles 22 and 23 of Decree-Law No. 60/2024) but had been on hold pending EU authorization.

Both incentives fall under hiring benefits introduced by Decree-Law No. 60/2024, effective from September 1, 2024. However, their application was expressly contingent on the European Commission’s approval.

Youth Bonus

The Youth Bonus, outlined in Article 22 of Decree-Law No. 60/2024, is designed to promote stable employment for young workers. It provides a social security contribution exemption for private employers who hire young individuals under 35 on permanent contracts between September 1, 2024, and December 31, 2025. The exemption also applies to employers converting fixed-term contracts into permanent ones, provided the employee meets the same criteria (under 35 and no prior permanent employment history).

The incentive excludes managerial roles, domestic workers, and apprentices. It lasts for up to 24 months from the hiring date and covers 100% of employer-paid social security contributions, up to a maximum of €500 per month. This cap increases to €650 for hires in businesses located in the so-called “Single Special Economic Zone” (ZES unica) for Southern Italy, which includes Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria, and Sardinia.

In some cases, the exemption may also be available for workers who have previously held a permanent position with a different employer that only partially benefited from the incentive. However, the exemption cannot be combined with other contribution reductions, except for the “Super Deduction,” which increases the deductible cost of new permanent hires and has been extended until 2028.

To qualify, employers must comply with general incentive regulations (Legislative Decree No. 150/2015), including workplace health and safety rules and national labor contracts. They must also have a valid DURC (compliance certificate for social security contributions). Additionally, the benefit is denied if the employer has conducted individual or collective layoffs for economic reasons in the same production unit in the six months before hiring. If an employer lays off a worker benefiting from the incentive (or another employee with the same role) within six months of hiring, the benefit is revoked, and the employer must repay the amounts received.

Despite the EU approval, the Youth Bonus is not yet in effect. Its implementation depends on the issuance of a ministerial decree and further INPS guidelines, including details on how employers can claim retroactive benefits for eligible hires made before the approval.

Women’s Bonus

The Women’s Bonus, introduced under Article 23 of Decree-Law No. 60/2024, is part of Italy’s broader strategy to promote gender equality in employment, particularly for disadvantaged women, including those in southern Italy.

Like the Youth Bonus, it is a two-year social security contribution exemption for private employers hiring women on permanent contracts between September 1, 2024, and December 31, 2025. It applies to:

1. Women of any age who have been unemployed for at least six months and reside in the ZES regions or work in industries facing gender employment gaps (as defined by Article 2(4)(f) of EU Regulation 651/2014);
2. Women of any age who have been unemployed for at least 24 months, regardless of their place of residence.

The exemption covers 100% of employer-paid social security contributions, up to €650 per month per employee, except for apprenticeship and domestic work contracts.

To qualify, employers must demonstrate a net increase in employment, calculated by comparing the monthly workforce to the average number of employees in the previous 12 months. As with the Youth Bonus, the Women’s Bonus cannot be combined with other contribution reductions, except for the Super Deduction.

Like the Youth Bonus, this measure is not yet operational. It will take effect once the government issues the implementing decree and INPS provides further instructions on how to claim the exemption and recover any retroactive benefits.