August Decree: exemption from contribution payments and National Social Security Institute (INPS) clarifications
In circular no. 133 of 24 November 2020, INPS provided clarifications for the correct management of the contribution exemption under art.6 of Decree Law no. 14 August 2020 no. 104 ( “August Decree”), converted, with amendments, by Law 13 October 2020 no. 12.
Art. 6 of the August Decree introduced an exemption from the payment of social security contributions by employers, except for those in the agricultural sector, when hiring employees under a permanent contract (including part-time) between 15 August and 31 December 2020. Workers must not have had a permanent relationship with the same employer in the six months before their recruitment.
The exemption applies when a fixed-term employment contract is made permanent during the above period, and for hires under a permanent contract for employment agencies. The exemption does not apply to workers under an apprenticeship or a domestic work contract, or with an intermittent employment contract.
The incentive is available for a maximum of six months from the date of recruitment/contract modification and is equal to the social security contribution payable by the employer, excluding INAIL premiums, and other minor contributions such as any due contributions to the funds referred to in articles 26-29 of Legislative Decree 148/2015 and the contribution of 0.30% for the financing of interprofessional funds.
The maximum monthly exempt contribution is € 671.66 (to be re-proportioned for part-time employment). This means that the maximum amount is the lower amount between the normal monthly exempt contribution due and the monthly benefit limit.
In its circular, INPS specifies that the right to benefit from the exemption is subject to the possession of the requirements provided for by Article 1, paragraph 1175, of Law 296/2006, namely: (i) the possession of the single insurance contribution payment certificate; (ii) the absence of violations of the fundamental rules for the protection of working conditions and compliance with other legal obligations; (iii) compliance with collective national, regional, local and company bargaining agreements signed by the employers’ and workers’ trade unions that are nationally comparatively more representative.
The circular specifies that, as other social security contribution exemptions, it is necessary to meet the conditions set out in art.
31 of Italian Legislative Decree no. 150/2015. The social security contribution exemption is granted if the employment (i) does not violate the entitlement to recruitment priority established by law or collective agreement, to rehiring a worker and (ii) does not concern workers dismissed, in the previous six months, by an employer who, at the date of dismissal, had a control or subsidiary relationship with the hiring employer.
For the employer, to use the benefit, must electronically apply to the Institute, using the benefits portal (former Diresco).
In the application the following must be indicated:
- the data of the worker hired on a permanent basis or whose employment relationship has been made from fixed term to permanent;
- the numerical code of the mandatory employment communication ( COB) sent to the employment centre;
- the worker’s monthly salary including accruals of additional monthly payments;
- the contribution rate applicable to the worker’s salary eligible for exemption.
Once an admission request has been received, the formal requirements and the availability of the allocated financial resources are checked. INPS will then calculate the incentive amount and authorise the exemption for the relevant period.
Under Article 6, paragraph 3, of the August Decree INPS, stated that this exemption can be combined with other social security contribution exemptions provided by the legislation within the due social security contribution’s limits.