With the definitive publication of the Financial Law for 2015
(Law nr. 190, dated December 23 2014, published in the Italian
Official Gazette nr. 300 dated December 29 2014), relevant news
have been enforced for new employment allowances.
A tax allowance for hiring at indefinite time has been
introduced, but at the same time has been revoked the allowance
foreseen in case of hiring of long-time unemployed people.
The new provisions have a lot of shadows and few lights, in
particular for the entitlement to get allowances.
In fact, if from one side employers hiring employees for an
indefinite-time contract are not subject to social security payment
for 3 years, on the other side they have cancelled the allowance
foreseen for the employers hiring workers unemployed for at least
24 months. But while this was granted for an indefinite time, the
new one can be granted only new employment happened in the year
INDEFINITE TIME EMPLOYMENT CONTRACTS
Paragraph 118 of the said Law exempts:
the employer from the payment of Pension Contribution,
up to a maximum amount of Euro 8.060,00 for each year,
in case the employee is hired with an indefinite-time employment
The employers under consideration are the "private
employers", therefore including any industry, professional
firms (Accountants, Lawyers, Architects, etc.) working as privately
owned legal entities. But, unfortunately, the effectiveness
of the exemption has a time limit of 1 year, therefore the employee
has to be hired between January 1st 2015 and December 31st 2015,
and the exemption will be applied for the following 36
We must also highlight that, as per paragraph 121 of the above
mentioned law, funds available from Italian Government budget are
limited to 1 Billion Euro for the years 2015, 2016 and 2017 and to
500 Millions Euro for the year 2018. This means that, making a
rough calculation, employees that could benefit of this exemption
are limited to 124.069.
AMOUNT OF THE EXEMPTION
The exemption is for the total amount of Social Security
Contribution to be paid by the employer to the maximum extent of
Euro 8.060,00 for each employee for each of the 3 years following
the hiring. The amount chargeable to the employee (9.19% or 9,49%
in case of more than 50 employees) is not affected by the
Healthcare protection and contribution paid for safety on
working places (INAIL) have to be regularly paid by the employer
during the entire said period.
It has been confirmed that during the 36 months involved the
employee is entitled to receive the pension contribution coverage,
but this is still unclear and should be clarified better by
EXCLUSIONS FROM THE EXEMPTION
The exemption can't be applied to employers hiring
employees already employed with an indefinitetime contract in the 6
months preceding the new hiring with any employer.
Are also excluded those employees who have already benefit of
the exemption with a former indefinitetime employment contract.
The check of this requisite is quite difficult, since the
employee can't be aware of the use of the exemption by a former
In addition the exemption is not applicable in case the employee
was already employed with an indefinite-time contract in the 3
months preceding the enforcement of the law, also with companies of
the same group (controlled or connected by or with the employer)
under article 2359 of the Italian Civil Code.
Therefore any breach of the employment contract happened between
September 30th and December 29th 2014, for any reason, will
preclude the exemption if the employee is re-hired by the same
employer even if the 6 months term has expired.
The calculation of the 6 months period has to be done on the
base of 183 days (365/2).
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.
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