Italy: Italian Youth Employment Incentive: INPS Instructions

Last Updated: 8 May 2017
Article by TMF Group

This year, incentives are on offer to all private employers that hire young people* in Italy.

Italian Ministry of Labour Decree no. 394/2016 and 454/2016 states that between 1 January and 31 December 2017, a specific contribution incentive is available to all private employers hiring young people*, aged 16 to 29 years old.

*These young people must be registered with the Youth Employment National Operating Program (known as the 'Youth Guarantee Program'). It's important to note that the incentive cannot be applied for if the young person is not registered with the program prior to their date of employment.

INPS Circulars 40/2015 and 1171/2017 outlines how employers can receive the incentive.

Application

The incentive applies to permanent employment contracts including staff leasing or temporary employment contracts of six months or more; professional apprenticeship contracts, employment contracts executed fulfilling the partnership obligation with a workers' cooperative and part-time contracts.

The incentive is granted to employers in monthly instalments starting from the date of employment and consists of:

  • 50% of social security contributions by the employer, with a maximum annual amount of €4,030 for each worker temporarily employed (duration of the incentive is proportionate to the contract duration)
  • social security contributions by workers with a maximum annual amount of €8,060 for each permanently employed worker (duration of the incentive in 12 monthly instalments).

The incentive does not apply if:

  • the employment constitutes the fulfilment of a pre-existing obligation as set out by the provisions of the law or by national collective bargaining agreements
  • the employment violates the entitlement to recruitment priority as set out by the law or collective agreements
  • suspensions from work due to crisis or re-organisation of the company (with due exceptions) are in place by the employer or user of leased staff
  • the employment concerns workers dismissed in the preceding six months, by an employer that at the date of dismissal was related to the employer hiring the workers, from the standpoint of a substantial coincidence of the ownership structure or of the existence of a relationship of control or connection.

Requirements

Granting of the incentive is subject to the following typical requirements:

  • fulfilment of contribution obligations
  • observance of the rules on the protection of work conditions
  • compliance without prejudice to all obligations of the law, with the national collective agreements and contracts as well as with the regional, local or corporate contracts, if any entered into by the trade unions of the employers and the employees
  • application of the general principles on employment incentives, as last set out in Article 31, Legislative Decree no. 150/2015.

Process

It should be noted that the incentive may be legitimately received in compliance with the provisions of the Commission Regulation (EU) no. 1407/2013 on the application of the so-called de minimis state aids. Young people who, at the time of registration in the Youth Guarantee Program are aged between 16 and 24 may receive the incentive beyond the limit set out for the de minimis aids, only if this implies a net increase in employment.

Since a well defined fund has been earmarked for this type of incentive, a specific application form has been provided, through which the employer can make a sort of booking for future subsidised employment; although nothing prevents employment from being finalised before booking.

The employer must submit to INPS a preliminary application for admission to the incentive, indicating:

  • the name of the worker in relation to whom the employment concerns
  • the Region and Province where work will be performed
  • the estimated or actual monthly average salary
  • the contribution rate of the employer.

The application must be made from the Institute website exclusively using the 'OCC.GIOV' online form (available in the app DiResCo - Dichiarazioni di Responsabilità del Contribuente on the INPS website). Once all internal verifications have been made, in the event of a positive outcome, INPS will confirm the maximum incentive amount the employer is entitled to.

In order to receive the incentive, the employer must finalise the employment – if not already finalised – within seven calendar days of confirmation of the request. Within 10 calendar days from the date of positive communication from the Institute, the employer must notify that employment has occurred, under penalty of invalidation, requesting confirmation of the booking made in its favour.

It should be noted that failure to comply with the above term of 10 days will result in the ineffectiveness of the amounts booked, even though the possibility for the employer to submit another request at a later time remains unprejudiced. The processing of such confirmation by the Institute constitutes final admission of the benefit.

In the event of admission, the employer will receive the indication of the maximum total incentive granted which will be used for the duration of the validity of the contract. With regard to temporary employment and apprenticeship contracts, a training period of less than 12 months applies. In the event of permanent employment, the incentive will be used in 12 monthly instalments, provided that the employment contract remains in place.

The incentive is granted in the form of a final balance/offset made in the contribution report (UniEmens or DMAG for agricultural workers), beginning April 2017.

The booking service on the INPS website has been active since 15 March.

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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