Re-employment contract: INPS publishes first operating guidelines on contribution exemption (Andrea Di Nino, Sintesi – Ordine dei Consulenti del Lavoro, August 2021)
In circular no. 115 of 2 August 2021, INPS has provided the first practical operating instructions for employers benefiting from the contribution exemption under the re-employment contract introduced by art. 41 of Decree Law 25 May 2021, no. 73, converted with amendments, by Law no. 23 July 2021, no. 10 ( “Support Decree-bis”). This Circular will be followed by a further provision explaining the procedures for requesting and using the benefit.
INPS replied that, on 28 June 2021, the Italian authorities notified the European Commission of this measure. Accordingly, in Decision C(2021) 5352 final of 14 July 2021, the Commission authorised the exemption applicability under the above legislation.
The re-employment contract has been established as an open-ended employment contract. Its formalisation entitles the employer to benefit from a contribution exemption of all social security contributions due at its own expense, excluding premiums and contributions due to INAIL, up to a maximum limit of €6,000 annually, prorated and applied monthly, for a maximum of six months. The calculation rate of pension benefits remains unchanged.
The exemption is available to private sector employers, excluding domestic and agricultural employers, who make open-ended recruitments with a re-employment contract between 1 July 2021 and 31 October 2021.
According to the legislator’s intention, this new type of contract and the related exemption meet the need to facilitate and promote the reinstatement of unemployed workers into the labour market and resume activities after the epidemiological emergency.
An employment condition to be hired under a re-employment contract is for an individual project to ensure the worker’s professional skills meet the new work situation. This is subject to the worker’s consent. The individual project lasts six months during which the sanctions on unlawful dismissal provided for by current legislation apply.
During reinstatement, only dismissal for just cause or justified reason is allowed; at the end of the project, ad nutum dismissal is permitted, as in an apprenticeship contract. If neither party terminates the contract, the relationship continues as ordinary open-ended employment. Please note that dismissal during or at the end of the reinstatement period entails forfeiture of the contribution exemption right.
The right to use the measure is subject to the following conditions at the date of recruitment:
- on the date of new recruitment, the worker must be unemployed under Article 19 of Legislative Decree no. 150/2015;
- In the six months preceding the recruitment, the employer must not have made any individual dismissals for objective reasons, in the same production unit where the recruitment takes place;
- Single insurance contribution payment certificate (DURC) compliance
- absence of serious violations of labour and social legislation;
- compliance with the agreements and collective contracts signed by the most representative trade unions.
The exemption will be forfeit, and the amount received will be refunded for employers who:
- dismiss the worker for whom the benefit is granted during or at the end of the employment period referred to in Art. 41, paragraph 3, of the Support Decree-bis;
- collective or individual dismissal for objective reasons of a worker employed in the same production unit and classified at the same level and legal category as the worker hired with the exemption, in the six months following the recruitment subject to the benefit.
INPS clarified that the benefit involves “portability” which means the worker for whom the benefit has been partially used has the same exemption for the remaining months due in case of any new recruitment by the same or another employer.
INPS specified that the benefit for the residual period for subsequent re-employment by the same worker could be applied only to open-ended recruitments with a re-employment contract from 1 July 2021 to 31 October 2021.
If the employee resigns, the contribution exemption is applied for the actual employment relationship duration.
For the cumulation with other contributory benefits, the benefit can be used “in sequence.” Once the six-month exemption of the re-employment contract has ended, it will be possible for employers to benefit from further contributory exemptions. INPS clarified that the maximum duration of these exemptions must be calculated net of the contribution exemption period of use linked to the re-employment contract.