The Budget Law for 2020 (Law No. 160/2019), which entered into force from 1 January 2020, introduced some new provisions in various areas of Italian employment law. In some cases, these constitute an evolution or confirmation of provisions introduced in recent years. The main points are set out below.

Extension of the special social ‘shock absorber’ in the event of a company shut down (‘CIGS per cessazione’)

The 12-month specific social ‘shock absorber’ (the State-funded resources to financially assist companies in the event of a shut down on the condition that a reindustrialisation or transfer plan is feasible), can now be extended.

Where the company meets particular difficulties during the implementation phase of the reindustrialisation or transfer process, it can ask for a six-month extension after signature of an agreement with the unions before the Ministry of Labour and with the participation of the Ministry of the Economic Development.

Reduction of labour cost and social security contribution exemptions for employing young people

The Budget Law provides for a fund with a specific budget to reduce labour costs (a decree will be necessary for the specific measures).

In addition:

• A specific provision has been introduced for hiring young people on an apprenticeship contract aimed at obtaining the professional or the high school diploma, from 1 January to 31 December 2020: employers with nine employees or fewer are granted a 100% contribution exemption for a maximum of three years.
• The exemptions already provided in the Budget Law for 2019 for hiring an employee under 35 on a full-time and on an open-ended contract (50% social contributions exempted up to EUR 3,000 per year for up to 36 months maximum) and for a university graduate under 30 with the highest marks or a PhD graduate under 34 (exemption up to EUR 8,000 for up to 12 months maximum) have been confirmed for 2020. Contributions for compulsory accident insurance are excluded from these exemptions.

Support for parents

Mandatory paid paternity leave is now extended from the previous five days to seven days: it can be taken during the first five months following the child’s birth.

The bonus already provided to employees for enrolling children in nursery has been increased up to EUR 3,000 for 2020 depending on family income.

Support for female sport at professional level

Sports clubs that enter into professional contracts (‘contratto di lavoro sportivo’) with female athletes are granted an exemption from the payment of 100% of social security contributions up to a maximum of EUR 8,000 on an annual basis for the years 2020, 2021 and 2022. Contributions for compulsory accident insurance are excluded from this exemption.

Company cars

The Budget Law has changed the taxation of this benefit (i.e. the rate of taxation imposed on an employee for personal use of a company car). Specifically, it provides for an increase from 30% to up to 50% taxation for more polluting cars while providing for a reduction from 30% to 25% for less polluting cars starting from July 2020. This new provision will apply to new company car contracts.

Meal vouchers

The tax and social contribution exemption for meal vouchers, under which employees do not pay any tax or social contribution up to a certain meal voucher value, has now changed. For paper vouchers, the exemption has decreased from EUR 5.29 to EUR 4.00 while for electronic vouchers, the exemption increases from EUR 7.00 to EUR 8.00.