Italy: New Holiday – March 17th 2011 - For 150th Anniversary Of Italy's Unification

INDEX

1. INTRODUCTION

2. THE NEW HOLIDAY ON MARCH 17° 2011

3. APRIL 25TH HOLIDAY AND ON EASTER MONDAY

1. INTRODUCTION

The declaration of the new holiday on March 17^th, under the 150^th anniversary of the Italian unification, and the coincidence of April 25^th (Liberation's Day) with the Easter Monday, outline some issues related to the economic treatment to be recognized to employees.

This year the National holidays (that join the religious ones), relevant for employment relationship, for production's activity and for the economic treatment suffer substantial innovations, and in particular:

A new holiday has been introduced just for the year 2011, with reference to the 150^th anniversary of the Italian Unification, to be celebrated on March 17^th;

The coincidence between the Nation holiday of April 25^th (Liberation Day) with the Easter Monday.

2. the new holdiay march 17 2011

The above mentioned holiday has been introduced by art. 7-bis of the Law Decree no. 64/2010 (Law n. 100/2010), for celebrating the 150^th anniversary of Italy unification.

The Council of Ministers, in the meeting dated January 28^th 2011, has specified civil consequences of the mentioned holiday, in particular has communicated: "Since that qualification implies the exceptional inclusion of this day in those ordinary considered as holidays, the Council deemed compulsory, as a consequence (and only for this year), to extend to the day of march 17^th 2011 those rules applicable for holiday's working time, as well as limitations applicable to juridical matters, and the economic treatment to recognize to employees and related penalties for incorrect behaviours".

The clarification rendered by the Council of Ministers was needed since the legislative measure has declared as national holiday the day of March 17^th 2011 without amending or recalling, for the economic treatment related to employees, article 5 of the Law n. 260/1949, about "employment payment's measures in case of holidays".

In addition the Council of Ministers has issued a Law Decree stating that no additional payment will be due by the employer for the foreseen holiday of November 4^th 2011 (that on for 2011 will not be considered as an holiday, as usually done).

This measure has been enforced in order to avoid any double charge on employers: this implies that employees, in November's 2011 pay slip will not receive the usual payment related to the national holiday set on the 4^th.

Being March the 17th a holy-day implies the following consequences:

2.1 Paid day

For employees paid on a fix monthly basis the payment will include the new holy-day;

For employees paid on the base of working hours, the new holy-day will be paid with the actual global payment;

Hours worked on March 17^th, in addition to payment stated above, additional holidays working percentage will be added (according the National Collective Employment Agreement signed).

2.2 Holiday and redundancy payment

Reduced working time employees: the new holyday is charged to employer;

Suspended employees: if paid with a fix measure the new holidays is absorbed by the redundancy fund (no charge on the employer if no different provision is included in the agreement signed with Unions); while if paid according to worked hours, being the March 17^th a civil holyday, employer will suffer all the charge (as confirmed by Italian Social Security Authority, INPS, in its message no. 13552 dated June 12^th 2009).

2.3 Holyday and illness (with INPS contribution)

Employees paid with a fix salary: the holiday, occurring after the first three days of absence, is absorbed by the illness allowance (any additional payment is due by the employer);

Employees paid on the base of worked hours, the new holyday is charged to the employer.

2.4 Holyday and injury

The temporary economic treatment due by the Italian Healthcare Protection Authority (INAIL), is due also for holy-days;

Employer is obliged to the following contribution:

If the holy-day occurs within the first three days of absence: payment of the full salary;

If the holy-day occurs after the first three days of absence: an additional payment could be foreseen by the National Collective Agreement (this has to be verified case by case).

2.5 Holidya and maternity leave

Employees paid with a fix salary, the new holyday is absorbed by maternity leave, while the employer will be charged with the salary's integration needed to reach the 100% of the payment foreseen for the holy-day;

Employees paid on the base of worked hours, the new holyday is charged to the employer.

2.6 Holyday and family leave

Employees paid with a fix salary, the new holyday is absorbed by family leave, while the employer will be charged with the salary's integration needed to reach the 100% of the payment foreseen for the holy-day;

Employees paid on the base of worked hours, the new holyday is charged to the employer.

2.7 Holiday and End Of Employment Severance Payment (TFR)

Holidays occurring during the weekly working days (Monday to Friday) concur to form the TFR's taxable income base (if no exemption has been included in a separate agreement signed by the employer with Union's representatives).

3. APRIL 25TH HOLIDAY OVERLAPS EASTER MONDAY

This year the Italian Liberation Anniversary (April 25th ) overlaps the Easter Monday.

Therefore the following rules must be taken on account considering the appropriate employees' payment:

Article 5 of the Law no. 260/1949 states that if the holyday incurs on Sunday, in addition to the actual daily salary, employee has to be recognized with and additional payment of the same nature (but this is not the case);

Article 2 of the Law no. 90/1954 states that the economic treatment foreseen by article 5 of the Law no. 260/1949 has to be recognized to employee even on leave for the following reasons:

... e) work's rest under an overlap with holiday or Sunday.

The Italian Supreme Courte with its sentence no. 14643 dated June 23rd 2006) has clarified that article 2 of the Law no. 90/1954 extend the treatment foreseen by article 5 of the Law no. 260/1949, that is the additional payment is extended to national holidays overlapping Sundays or other festivities.

The above mentioned can't be extended to employees paid on the base of worked hours.

With regards to the above mentioned, the overlapping between April 25th and Easter Monday implies the following economic treatment:

Employees paid with a fix salary: full monthly salary plus an additional working day;

Employees paid on the base of worked hours: two additional actual working days;

Employees working on April 25^th: in addition to the above mentioned, the extra payment related to the holiday is due.

3.1 Detaxation

Salaries plus any contractual additional payment due to employees working on holidays, can benefit from the flat rate taxation at 10% (employee must not exceed a total 2010 salary of € 40,000.00) if this extra work can reconducted to an increase of productivity for employer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.