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Italy: Implementation of the Jobs Act

(Nov. 5, 2015) On September 24, 2015, four legislative Decree Laws implementing the employment law reforms embodied in the 2014 Jobs Act — Decree Laws Nos. 148, 149, 150, and 151 of September 14, 2015 – entered into effect in Italy. (Legge 10 dicembre 2014, n. 183 Deleghe al Governo in materia di riforma degli ammortizzatori sociali, dei servizi per il lavoro e delle politiche attive, nonche’ in materia di riordino della disciplina dei rapporti di lavoro e dell’attivita’ ispettiva e di tutela e conciliazione delle esigenze di cura, di vita e di lavoro [Law No. 183 of December 10, 2014, Delegation to the Government in the Matter of Reform of the Social Security Network, Employment Services, and Active Policies, as well as in Matters of Reorganization of the Discipline of Labor Relations and of Inspection Activities and of Protection and Reconciliation of the Demands of Care, Life, and Work] (Law No. 183), GAZETTA UFFICIALE, No. 290 (Dec. 15, 2014), NORMATTIVA.)   One key Decree Law is No. 148, which covers aspects of the supplementary salary treatment program (SST), a program that supplements the income of workers who have been suspended from their work or whose salaries have been reduced due to the current financial crisis affecting Italy.  (Law No. 183, art. 1.)

Decree Law No. 148 identifies the workers who are beneficiaries of the SST as established in the Jobs Act. (Decreto Legislativo 14 settembre 2015, n. 148, Disposizioni per il riordino della normativa in materia di ammortizzatori sociali in costanza di rapporto di lavoro, in attuazione della legge 10 dicembre 2014, n. 183 [Provisions for the Reorganization of the Legislation on Social Welfare Nets for Previously Employed Individuals, in Accordance with the Law of December 10, 2014, n. 183] (D.L. No. 148), art. 1(1), GAZETTA UFFICIALE, No. 221 (Sept. 23, 2015), NORMATTIVA.) In most cases, such workers must have at least 90 days of seniority with their employer before a request for the benefit can be made. (Id. art. 1(2).)

Workers under professional apprenticeship contracts are also included in the scheme. (Id. art. 2(1).) Apprentices under professional apprenticeship contracts who are working for companies that qualify to receive SST of the extraordinary type receive benefits only in cases where the company takes certain steps during a corporate crisis that occurs after January 1, 2016, to cease all or part of its production activities (Id. arts. 2(2) & 21 ¶ 1(b).) The SST is equivalent to 80% of the compensation to which the worker would have been entitled for the time not effectively worked, between the first hour and the limit of the contractual work schedule. (Id. art. 3(1).) The law contemplates different mechanisms for the determination of the SST benefits depending on the type of work schedule the affected worker has and the length of the suspension or reduction of the work schedule. (Id. art. 3(2)-3(10).)

In case of illness, the SST replaces the daily amount of time allotted by the employer for sick leave and also any contractual relations concerning sick leave that currently exist between the employer and the worker. (Id. art. 2(7).) No SST is paid for legal holidays or for absences for which no remuneration was previously paid. (Id. art. 2(8).)

The maximum duration of both the ordinary and the extraordinary SST is 24 months in a five-year period. (Id. art. 4(1).) D.L. No. 148 also requires contributions in addition to the SST. (Id. art. 5(1).)   Companies pay SSTs to their workers at the end of each pay period. (Id. art. 7(1).) The Italian Social Security Institute (SSI) reimburses companies for such payments. (Id. art. 7(2).) Periods during which the work schedule is suspended or reduced and during which the worker received SST benefits do not affect the seniority of the affected workers for purposes of computation of pensions for early retirement or retirement due to old age. (Id. art. 6(1).)

Ordinary Supplementary Salary Treatment

Workers who perform autonomous or dependent work during an SST period are not entitled to also receive compensation for the daily work performed. (Id. art. 8(2).) Workers who do not inform the SSI concerning the autonomous or dependent work they perform during an SST period may forfeit SST benefits. (Id. art. 8(3).)

All provisions concerning ordinary SSTs and the contribution obligations they entail apply to a broad range of companies and economic activities. (Id. art. 10.) Companies must promptly notify unions of the reasons for any suspension of work or reduction of labor schedules, their nature and foreseeable duration, and the number of affected workers. (Id. art. 14(1).)

Requests for SST treatment by companies must be submitted online with the SSI, and such requests must include the same information that companies are required to send to unions. (Id. art. 15(1).) The requests must be submitted within 15 days from the beginning of a suspension or reduction of the work activity. (Id. art. 15(2).) In the case of an untimely request, the company involved must pay affected workers an amount equivalent to the supplementary salary not given to them pursuant to SST treatment. (Id. art. 15(4).)

D.L. No. 148 also includes special provisions for companies in the agricultural sector. (Id. art. 18.)

Extraordinary Supplementary Salary Treatment

D.L. No. 148 contains a long enumeration of the entities subject to the extraordinary SST program. The list includes companies in the industrial, artisanal, food, cleaning, railroad, agricultural, and security areas, together with commercial, trading companies, travel and tourism companies, airport and port transportation companies, and political parties. (Id. arts. 20(1)-20(3).)

D.L. No. 148 also sets forth the conditions and maximum limits for the amounts to be paid under the extraordinary SST. (Id. art. 21(4).) Companies are prohibited from obtaining extraordinary SST for economic units for which they have requested ordinary SST based on the same grounds and time periods as those involving extraordinary SST. (Id. art. 21(6).) The extraordinary SST may have a maximum duration of 24 months in a five-year period. (Id. art. 22(1).) D.L. No. 148 also contains provisions regulating employer contributions to the extraordinary SST (id. art. 23(1)), requisite notifications to unions (id. art. 24), and procedural rules for the granting of these benefits. (Id. art. 25.)

Bilateral Solidarity Funds

D.L. No. 148 directs the largest Italian unions and entrepreneurial associations to reach collective bargaining agreements to create “bilateral solidarity funds” for sectors outside the scope of D.L. No. 148. (Id. art. 26(1).) The purpose of these funds is to ensure that workers who are subject to a suspension or reduction of their salaries receive supplemental remuneration. (Id. art. 26(9).)

D.L. No. 148 also contemplates the creation of “alternative bilateral solidarity funds” for artisanal sectors or other sectors not covered by its provisions. (Id. art. 27(1).) Effective on July 1, 2016, employers with a minimum of five dependent workers may opt for the monies included in these funds. (Id. art. 27(4).)   In addition, D.L. No. 148 creates “residual solidarity funds” for employers who use 15 or more dependent/subordinate workers (as opposed to independent contractors, consultants, etc.) who are not subject to the provisions applicable to the ordinary SST. (Id. art. 28(1).)

Furthermore, new “salary integration funds,” effective January 1, 2016, will apply to employers who use 15 or more dependent workers and who have not created a bilateral solidarity fund. (Id. art. 29(2).)

The funds created under D.L. No. 148 are managed by administrative committees appointed according to the criteria and procedures it establishes. (Id. art. 36.)