ArlatiGhislandi

DIGEST
N.2

New incentives fo new hires

Decree-Law No. 60 of 7 May 2024, on ‘Further Urgent Provisions on Cohesion Policies’, introduced new incentives for hiring:
- Young workers under the age of thirty-five (art. 22). It should be noted that until 31 December 2023 the employer was granted an exemption from paying the entire mandatory social security contribution charged to him in the case of hiring or transforming the employment relationship from a fixed-term contract to a permanent contract of a worker below the age of 36 years old,
- ‘Disadvantaged’ women (Art. 23),
- Workers in the special economic zone (ZES) for Southern Italy (Art. 24).

Incentives for hiring young workers

In order to promote the stable employment of young people, employers are entitled to be exempted from paying the full amount of the compulsory social security contributions due, up to a maximum of EUR 500.00 per month for a maximum period of 24 months. It should be noted that:
- Premiums and social contribution payable to INAIL are not subject to the reduction,
- The calculation rate for pension benefits remains unchanged.

This benefit is granted on condition that, between 1 September 2024 and 31 December 2025, the employer:

- Hires, with a permanent contract, a worker who is under 35 years of age at the time of hiring, or
- Transforms, from fixed-term to permanent, the employment relationship of a worker who is under 35 years of age at the time of transformation of the contract.

In any case, the employer is entitled to the exemption provided that, at the time of the incentivising event, the employee concerned has not been employed under a permanent employment contract with the same or another employer throughout his or her working life.

On the other hand, the exemption is granted for the remaining part if, at the time of the incentivised hiring, the employee was employed under a permanent employment contract with another employer who only partially benefited from the exemption in question.

The following are considered to be excluded from the scope of the benefit in question:

- Apprenticeships. It should be noted that the exemption applies in the case of previous employment with an apprenticeship contract which was not continued as an ordinary, permanent employment relationship,
- Employees with “Dirigente” (executive) rank/status.

In order to boost the development of employment in the Special Economic Zone of southern Italy (ZES) and to contribute to the reduction of territorial disparities, the amount of the exemption is increased to EUR 650.00 for employers who hire workers in a plant or production unit located in one of the following regions: Abruzzo, Molise, Campania, Basilicata, Sicily, Apulia, Calabria and Sardinia.

The right to benefit from the tax exemption is subject to the following conditions:
- Compliance with the general principles governing recruitment incentives,
- In the six months before the hiring, the employer must not have carried out individual dismissals on justified objective grounds or collective dismissals in the same production unit,
- in the six months following the hiring, the employer must not have dismissed the hired worker or other workers with the same qualification and employed in the same production unit on justified objective grounds. Otherwise, the right to use the exemption will be withdrawn and the benefit already used will be recovered.

It should be noted that:

- The validity of the measure is subject to approval by the European Commission; a specific interministerial decree will define the means for implementing the exemption, in accordance with the provisions of the 2021-2027 Partnership Agreement and the content and specific objectives of the 2021-2027 National Programme for Young People, Women and Work,
- The incentive cannot be cumulated with other exemptions or reductions in social contribution duties provided for by the regulations in force and is compatible, without any reduction, with the increase in personnel costs allowed as a deduction from the company's income in the case of new hires with a permanent employment contract.

The benefit is granted within the expenditure limit of:

- EUR 34.4 million for 2024,
- EUR 458.3 million for 2025,
- EUR 682.5 million for 2026,
- EUR 254.1 million for 2027.

Incentive for hiring "disadvantaged" women

In order to promote equal opportunities in the labour market for disadvantaged female workers, also in the context of the Special Economic Zone for southern Italy (ZES), employers who, between September 2024 and December 2025, hire 'disadvantaged' women, will be fully exempted from the payment of their share of compulsory social contribution, up to a maximum of EUR 650.00 per month and for up to 24 months.

It is specified that:
- Premiums and contribution payable to INAIL are not covered by the incentive,
- The calculation rate for pension benefits remains unchanged.

This right is granted on condition that the employer, during the period covered by the incentive:

- Hires, with a permanent contract, women of any age who have not been in regular paid employment for at least six months, who are resident in a ZES region of Southern Italy and who exercise a profession or work activity in an economic sector characterised by a high level of occupational segregation between men and women, as last determined by the I.D. of 25 November 2019, or
- Hires, with a permanent contract, women of any age who have not had a regular paid job for at least 24 months, regardless of their place of residence.

In addition, the recruitment must lead to a net increase in employment, calculated as the difference between:

- The number of workers employed each month, and
- The average number of employees during the 12 months before hiring.

Apprenticeships are excluded from the scope of the incentive.

The benefit is recorded within the expenditure limit of

- EUR 7.1 million for 2024,
- EUR 107.3 million for year 2025,
- EUR 208.2 million for 2026,
- EUR 115.7 million for 2027.

Finally, it is determined that:

- A specific interministerial decree will define the means for implementing the incentive, in accordance with the provisions of the 2021-2027 Partnership Agreement and the specific content and objectives of the 2021-2027 National Programme for Youth, Women and Work,
- The exemption cannot be cumulated with other exemptions or reductions in social contribution duties provided for by current legislation and is compatible, without any reduction, with the increase in personnel costs allowed as a deduction from the company's income in the case of new hires with a permanent employment contract.

Incentives for hiring in ZES regions

In order to support the development of employment in the Southern Italy Special Economic Zone (ZES) and to contribute to the reduction of local disparities, employers who hire workers on a permanent basis are exempted from the payment of compulsory social contribution, up to a maximum of EUR 650.00 per month, for up to 24 months.

The exemption from social contribution duties is granted to the employer with a headcount not exceeding 10 workers in the month of recruitment and who, in the period between September 2024 and December 2025, hires a worker who

i) is 35 years of age or older on the date of recruitment,
ii) has been unemployed for at least 24 months, and iii) is employed in a plant or production unit located in one of the ZES regions (Abruzzo, Molise, Campania, Basilicata, Sicily, Apulia, Calabria and Sardinia).

It should be noted that:

- Employees with "Dirigente" (executive) rank/status are excluded from the scope of the benefit,
- Premiums and contribution due to INAIL are not covered by the incentive,
- The calculation rate for pension benefits remains unchanged.

The contribution benefit is recorded within the expenditure limit of:

- EUR 11.2 million for 2024,
- EUR 170.9 million for 2025,
- EUR 294.1 million for 2026,
- EUR 115.2 million for 2027.

The right to use the incentive is subject to the following conditions:

- Compliance with the general principles on hiring incentives,
- In the six months preceding the hiring, the employer must not have carried out individual dismissals on justified objective grounds or collective dismissals in the same production unit,
- In the six months following the hiring, the employer must not have dismissed the hired worker or other workers with the same qualification and employed in the same production unit on justified objective grounds.

Otherwise, the right to benefit from the exemption will be withdrawn and the benefit already granted will be recovered.

Finally, it should be noted that:

- The measure is subject to approval by the European Commission,
- A specific interministerial decree will define the modalities for implementing the exemption in question, in accordance with the provisions of the 2021-2027 Partnership Agreement and the content and specific objectives of the 2021-2027 National Programme for Young People, Women and Work,
- The benefit cannot be cumulated with other incentives provided for by current legislation and is compatible, without any reduction, with the increase in personnel costs allowed as a deduction from the company's income in the case of new hires with a permanent employment contract.