2021 Budget Law

We hereby report some of the most interesting news in the field of labor law introduced by the Budget Law 2021, Law No. 178 of December 30, 2020; specifically, we summarize the provisions relating to:

• Tax deduction for employees (Article 1, paragraphs 8-9)

• Contribution exemption for the hiring of young people under 36 (Article 1, paragraphs 10-15)

• Contribution exemption for the hiring of women (Article 1, paragraphs 16-19)

• Fund for exemption from social security contributions owed by self-employed workers and professionals (Article 1, paragraphs 20-22)

• Support for the return to work of working mothers (Article 1, paragraphs 23-24)

• Paternity leave (Article 1, paragraphs 25, 363-364)

• Contribution exemption for agricultural entrepreneurs and young owner-farmers (Article 1, paragraph 33)

• Decontribuzione Sud (Southern Italy Contribution Relief) (Article 1, paragraphs 161-169)

• Extension and renewal of fixed-term contracts (Article 1, paragraph 279)

• Extension of Covid redundancy fund treatments (Article 1, paragraphs 299-314)

• Block on dismissals until March 31 (Article 1, paragraphs 309-311)

• Interprofessional expansion contract (Article 1, paragraph 349)

• ISCRO (Article 1, paragraphs 386-401)

• Vulnerable workers (Article 1, paragraphs 481-484)

• Provisions regarding pensions (Article 1, paragraphs 336-339)

• Bonus bebè (baby bonus) (Article 1, paragraph 362)

• Contribution to mothers with disabled children (Article 1, paragraph 365)

These provisions are applicable from January 1, 2021.

Tax deduction for employees (Article 1, paragraphs 8-9)

For the purpose of a structural revision of the tax deduction system, the deduction introduced in 2020 is stabilized. This provides, for income from dependent employment and for certain types of income assimilated to that from dependent employment, a tax deduction for 2021 of Euro 1200 for a total income of Euro 28,000, proportionally adjusted for incomes between Euro 28,000 and Euro 40,000.

Contribution exemption for the hiring of young people under 36 (Article 1, paragraphs 10-15)

In order to promote stable youth employment, the contribution exemption for new open-ended hirings and for the transformation of fixed-term contracts into open-ended contracts for young people, introduced with the 2018 Budget Law, is recognized for the two-year period 2021-2022 at 100%, for a maximum period of 36 months and in any case within the maximum limit of Euro 6,000.00 per year, with reference to individuals who, on the date of the first incentivized hiring, have not reached the age of thirty-six.

The period in which it is possible to benefit from the exemption is increased to 48 months if the hiring concerns a worker whose place of work is located in one of the following regions: Abruzzo, Molise, Campania, Basilicata, Sicily, Puglia, Calabria and Sardinia.

The contribution exemption is granted to employers who have not, in the six months prior to the hiring, nor will they, in the 9 months following the hiring, proceed with individual dismissals for justified objective reasons or with collective dismissals of workers classified with the same qualification in the same production unit.

The effectiveness of these provisions is subject to authorization by the European Commission.

Finally, the aforementioned exemption is not provided in the event of confirmation of the apprenticeship contract at the end of the training period, as well as for open-ended hirings, which take place within 6 months of obtaining the qualification, of students who have carried out work-linked training activities with the same employer or an apprenticeship period for the qualification and professional diploma, the upper secondary school diploma, the certificate of higher technical specialization or periods of apprenticeship in higher education, for which the exemption from the payment of contributions remains valid in the amount of 50 percent up to a maximum amount of 3,000 euros on an annual basis, for a maximum period of 12 months, provided that the worker has not reached the age of thirty at the date of continuation (the regulatory provision referred to in Article 106 of Law 205/2017 remains valid; in this case, the exemption is applied starting from the first month following the expiry date of the contribution benefit linked to the apprenticeship contract).

Contribution exemption for the hiring of women (Article 1, paragraphs 16-19)

For the hiring of female workers carried out in the two-year period 2021-2022, on an experimental basis, the exemption introduced by Law no. 92/2012 is recognized, recognized in the amount of 100% and in any case within the maximum amount of € 6,000.00 per year.

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