Italy has put in place a range of new measures to contain the COVID-19 virus and provide economic support.
A Decree of the President of the Council of Ministers (DPCM) approved on 22 March 2020 saw the Italian government introduce further measures for the containment and management of the COVID-19 health emergency. These measures will apply nationwide. The government's further intervention became necessary in view of the latest developments in the public health emergency, the very diffuse nature of the epidemic, and the increase of cases nationally.
In particular, the Decree orders suspension of all commercial, retail and manufacturing activities, except for those listed in Annex 1 of the DPCM, and with the additional exception of activities listed below. Companies whose businesses are suspended will have until 25 March 2020 to complete any activity considered 'necessary' at the time of suspension, including the shipment of goods in stock. It also means a ban on the movement of people across municipalities, whether by means of public or private transport, other than for non-deferrable and proven business or health reasons or other urgent matters.
The following business activities are still permitted:
- Commercial/retail and manufacturing activities if they can be performed at a distance or remotely through flexible working practices (e.g. through 'smart working').
- Activities considered essential to supply chains in order to guarantee the continuity of businesses that have not been suspended (set out in Annex 1 of the DPCM), as well as of public services and essential services.
- Businesses that provide public services, as well as essential services (however, museums and other cultural institutes and sites remain closed to the public, and educational and training services suspended, unless provided remotely).
- The production, transport, sale and delivery of pharmaceuticals, health technologies and medical/surgical devices, as well as food and agricultural products.
- Activities in factories that use continuous production processes, the suspension of which would cause serious harm to the factory or create an accident hazard.
- Manufacturing activities in the aerospace and defence sectors, as well as any other activities of strategic importance to the national economy, subject to prior authorisation from the Prefect of the province in which the manufacturing activities are carried out.
- Agencies for the leasing of manpower, limited to authorised activities.
- Call centers.
- Providers of home delivery services for authorised activities.
Please note that unlike the requirements for the activities listed under point 6 above, in order to continue the activities listed in 2 and 5 above, it is sufficient to give notice of continuation to the Prefect of the province in which the manufacturing activities are carried out. The Prefect may suspend these activities if he or she finds that the necessary conditions have not been met for their continuing performance. Until this action is taken however, the activities will be considered lawfully performed on the basis of the notice sent to the Prefect.
The provisions of the Decree will apply from 23 March 2020 to 3 April 2020.
The 'Cura Italia' legislative decree on economic matters
Legislative Decree no. 18 of 17 March 2020, which came into force on the same date, provides for measures designed to strengthen the National Health Service and to give economic support to families, employees and companies in relation to the health emergency caused by COVID-19.
Below is a summary of the main innovative measures relating to the so-called 'social shock absorbers' ('ammortizzatori sociali', state-funded resources providing financial assistance to companies in the event of a temporary reduction or suspension of activity) that have been implemented in order to deal with the emergency.
Support for wages in key sectors from Ordinary Wage Guarantee Fund and Ordinary Allowance
Regardless of the number of employees, companies that operate in the specific sectors identified in article 10 of Legislative Decree no. 148/2015 (by way of example, but not limited to, industrial manufacturing, transport, mining, production and distribution of energy, water and gas, and production and work cooperatives), and that suffer a reduction in activity as a consequence of the current emergency, may request a wage supplement on 'Covid19 emergency' grounds.
Employers that are registered with the Wage Integration Fund (Fondo di Integrazione Salariale, FIS) and employ more than five employees on average can also apply for an ordinary allowance. The application for gaining access to the Ordinary Wage Guarantee Fund (CIGO) or the ordinary allowance must be presented by the end of the fourth month following the month in which the period of work suspension or reduction began.
The activation procedure is simplified compared to that under the normal regime (Legislative Decree no. 148/2015), because employers can inform the unions electronically, as well as consulting them and carrying out a joint assessment of the situation within three days of informing them.
The allowance can be granted for a maximum period of nine weeks from 23 February 2020 and, in any case, no later than August 2020 (the period is not counted for the purposes of the duration calculation in Legislative Decree no. 148/2015). To access this allowance, employers do not have to pay the 9% additional contribution (provided for in articles 5, 29 and 33 of Legislative Decree no. 148/2015).
Employers do not pay any social security contribution for hours not worked, however this does not affect employees since their social security contributions are granted by the Italian system.
Ordinary Wage Guarantee Fund replaces the Extraordinary Wage Guarantee Fund (Cassa Integrazione Guadagni Straordinaria, CIGS)
Employers using CIGS as at 23 February 2020 to support their wage bill can apply for CIGO. Access to the ordinary wage guarantee fund involves suspension of the benefits received from the previous fund. While using CIGO, no additional contributions are due from employers (art. 5 Legislative Decree 148/2015). The wage supplement can be granted for a maximum period of nine weeks and the period of CIGO does not count towards the limits set for CIGS.
CIGO replaces on-going Solidarity Allowance (Assegno di Solidarietà )
Employers registered with the FIS and which, as at 23 February 2020, have a Solidarity Allowance in place may apply for CIGO. During the CIGO application period no additional contributions are due from employers (article 29, paragraph 8, Legislative Decree no. 148/2015).
The allowance can be granted for a maximum period of nine weeks and the CIGO period does not count towards the limits set for the Solidarity Allowance.
Exceptional Wage Guarantee Fund
Employers that cannot benefit from the general protection provided for by law for suspension or reduction of working hours (including those operating in the agricultural, fisheries and tertiary sectors and religious institutions) will have access to CIGD in accordance with the provisions of each region or autonomous province.
The allowance can be granted for a maximum period of nine weeks starting from 23 February 2020 (i.e., with retroactive effect) and will be directly paid by INPS. Employers do not pay any social security contribution for hours not worked, however this does not affect employees since their social security contributions are granted by the Italian system.
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.
