News August Decree
- Aug. 26, 2020
- Reading time: 10 min
The purpose of this document is to outline the main labor-related changes introduced by the so-called August Decree (Decree-Law No. 104/2020), which took effect on August 15, 2020, as the latest measure adopted by the government to address the COVID-19 emergency.
In examining the new regulations governing employment retention programs during ongoing employment, the analysis begins by reviewing some of the provisions introduced by the “Cura Italia” Decree and the Rilancio Decree, to provide an overview of the emergency measures designed to support businesses and workers (see also the summary table).
In addition to the main topic of social safety nets, other changes introduced by the August Decree will be discussed, such as: the exemption from paying social security contributions for companies that do not apply for temporary layoff benefits, employment-related contribution incentives, and the regulations governing fixed-term contracts, the extension of the prohibition on layoffs, further installment plans for suspended payments, and the doubling of the limit on corporate welfare benefits for 2020.
Ordinary Layoff Benefits, Ordinary Allowance, and Exceptional Layoff Benefits
D. Cura Italia → Articles 19 through 22-quinquies, Decree-Law No. 18/2020, converted into Law No. 27/2020
This decree introduced three types of wage subsidies to address the same extraordinary event, lasting 9 weeks: CIGO, the ordinary allowance, and the exceptional unemployment benefit.
Questions regarding ordinary unemployment benefits and the ordinary allowance, submitted to INPS, have required prior notification, consultation, and, where applicable, joint review with the trade unions that are comparatively more representative at the national level.
Upon the decree’s conversion into law, individuals are granted the option to submit an application for the ordinary supplementary benefit for an additional period not exceeding three months, to employers with production facilities located in the so-called red zone, specifically:
with production facilities located in the municipalities listed in Annex 1 of the Prime Ministerial Decree of March 1, 2020;
AS WELL AS for those
that do not have a registered office or a production or operational facility in the aforementioned municipalities, limited to current employees who reside or are domiciled in those municipalities.
The application regarding the special relief fund, submitted to the Regions, on the other hand, required prior agreement with the trade unions that are comparatively more representative at the national level for employers with more than five employees.
With regard to companies with multiple locations (companies with facilities in at least 5 regions or autonomous provinces), the application followed a simplified procedure involving its submission to the Ministry of Labor and Social Policies.
Upon the decree’s conversion into law, the option is granted—as provided for under the ordinary wage supplementation program and the ordinary allowance—to submit an application for the benefit for an additional period not exceeding three months, to employers with facilities or workers located in “red” municipalities.
Similarly, employers with production facilities—or, in any case, for their employees who are resident or domiciled—in the regions of Lombardy, Veneto, and Emilia-Romagna (the so-called “yellow zone”) are eligible for exceptional wage supplementation benefits for an additional period not exceeding four weeks, which may be authorized by the same granting order.
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