Art. 1 of Decree Law no. 14 August 2020 no. 104 ( “August Decree”), converted, with amendments, by Law 13 October 2020 no. 126, has reviewed the period of ordinary and extraordinary wage subsidies and ordinary allowance that can be requested in the second half of 2020 to deal with the current health emergency.
The employer could have access to a maximum period of 18 weeks (nine plus a further nine) from 13 July 2020 to 31 December 2020.
INPS guidelines
The operating guidelines for wage subsidies for the Ordinary Redundancy Fund (CIGO), Wage Subsidy Fund (FIS) and Extraordinary Redundancy Fund (CIGD) for COVID-19 reasons, are laid down in INPS circular no. 115 of 30 September.
In this circular, the Institute set a 31 October 2020 deadline to submit applications for wage subsidies for July and August. It should be noted that the original legal deadline was 30 September 2020.
The August Decree confirmed that consultation with trade unions and a joint examination by the most representative trade union organisations was preparatory and mandatory to apply for the subsidy to the Institute. Employers who have less than five employees are exempt from this obligation.
The operating procedure requires two separate applications to be sent to INPS.
Employers are granted 18 weeks, divided into two distinct nine-week periods, to be used during 13 July and 31 December 2020.
For the first nine weeks, the wage subsidy application can be sent using the INPS platform and the “COVID- Nazionale” reason using the same method for wage subsidy applications under the “Cura Italia” and “Relaunch” Decrees.
For the additional nine weeks of wage subsidy, the August Decree introduced an additional contribution to be paid by the employer, making the use of social shock absorbers for COVID-19 reason “on a payment basis”, under turnover conditions as described below.
In addition to the explanatory circular on the August Decree provisions, with message no. 3525 of 1 October 2020, INPS issued the application procedures with the new “COVID 19 con fatturato” application reason for additional nine weeks, which may apply to periods before 14 September 2020 and completed by 31 December 2020.
Requests for the additional nine weeks, starting from 14 September 2020, requires the employer to send the self-certification attesting the turnover decrease for the first half of 2020 compared to the first half of the previous year.
The employer must self-certify the existence of one of the following conditions: not having suffered a drop in turnover, having had a reduction in turnover of less than 20 per cent, having suffered a drop in turnover of 20 per cent or more or, having started a business after 1 January 2019.
Access to the second period of nine weeks of wage subsidies without charges to the requesting employer will only be possible for employers who (i) have suffered a reduction in turnover in the first half of 2020 of at least 20 per cent compared to the first half of 2019 or (ii) have started a business after 1 January 2019.
When there is a reduction in turnover of less than 20 per cent, the employer will be subject to the payment of the additional contribution of nine per cent of the salary that would have been due to the worker for the unworked hours during the business suspension or reduction.
If there is no reduction in turnover, the additional contribution due will be 18 per cent.
To identify the rate of the additional contribution referred to in art. 1 of the August Decree, the requesting employers must attach the INPS application for wage subsidy with a declaration of responsibility, made under art. 47 of Presidential Decree no. 445/2020. With this declaration, employers must alternatively self-certify the existence and index of any turnover reduction and the right to exemption from the payment of the additional contribution if the business started after 1 January 2019.
As expressly stated in message no. 3131 of 21 August 2020, if the application is unaccompanied by the self-certification, the additional contribution requested will be a maximum of 18 per cent of the total remuneration that would have been due to the employee for the unworked hours during the suspension or reduction of work.
If the employer is unable to advance the wage subsidies and opts for direct payment by INPS, they will be required to send the Institute the data necessary for the wage subsidy payment or balance by the end of the month following the month to which the wage subsidy period refers (SR41 form).
To simplify the bureaucratic process to access the extraordinary redundancy fund, which required sending the wage subsidy application to the relevant Region and INPS, the August Decree ordered the transmission of applications to be carried out using the same methods used for CIGO and FIS, i.e. using the INPS platform directly.