Italian Employment Incentives in 2018: What You Need to Know.

December 11, 2017
by Sergio Barozzi

Each year the Italian government passes an annual ‘Stability Law’, in Italian known as the Legge di Stabilita (in English ‘Stability Law’), which was formerly known as the Legge di Bilancio. Among its many parts, the Legge di Stabilita sees State sponsored incentives introduced to aid the Italian competitiveness through labour market incentives and discounts on social security contributions if certain conditions are met.  The Italian Government has recently presented its draft for the 2018 Stability Law to the Italian Parliament which will now have until December 31st to debate its contents and approve a final version.

What new potential Italian government incentives should employers be aware of, and where possible take advantage of, in 2018?

  • NEW ‘YOUNG’ EMPLOYEE DISCOUNT
    Italian companies which hire any employee under the age of 35 (at the time of hiring) in 2018 on a full time or part time contract of indefinite employment will be entitled to a discount of up to Euro 3000 on social security contributions per employee per year for a maximum period of 3 years.

  If the place of work is located in the Mezzogiorno regions of southern Italy, which unfortunately has suffered     from a depressed economy for many years, then the employer will be able to have a 100% discount on social     security contributions for their newly hired under 35 year-old employees for a period of 3 years.

 This incentive is expected to be offered only in 2018 as it is foreseen that in 2019 any incentives of this nature   will only be applied to new employees under the age of 29.

There are also special incentives planned for employers operating in the agricultural sector – which is one of Italy’s key economic sectors.  Here any entrepreneur or professional registered as working in the Italian farming / agricultural sector who is under 40 years of age will be exonerated from making any social security contributions for up to 36 months.

  • EMPLOYEE TRAINING
    The Italian government is also looking to offer employers an incentive of up to a 50% refund on the cost of training their workforce. The cap on the refund available to businesses is expected to be Euro 1 million per company. This incentive will only be applicable to second level employment agreements.

This is notable different to what was offered in the 2017 Legge di Stabilita which instead provided incentives to Italian businesses for new technology investments and not people investment.

In addition, there will also be a separate training program referred to as Industria 4.0 (which is the Italian version of the EU’s 4.0 Industry program) in order to encourage training workers in new technologies for production, logistic, distribution, and marketing.  This particular program will provide employers an incentive which will reimburse 40% of the expenses (up to a maximum of Euro 300,000 ) per company to train their employees in technology related disciplines such as cloud computing, cyber security, augmented reality, robotics and ‘the internet of things’ among other subject matters.

As noted above, the final version of the Legge di Stabilita is still under debate by the Italian parliament and should be finalized by the years end.  For employers looking to hire new ‘young’ employees on full time and part time indeterminable contracts, as well as those interested in initiating comprehensive training programs for their staff, it could be an idea to wait until the final version of the Legge di Stabilita has been passed before making a decision to go forward.

Let us hope that the Italian Parliament is a bit more nimble than the Italian national soccer team when it comes to scoring a winning goal on this one as a null draw in this situation will have far worse consequences for Italy than missing out on the World Cup. Here we are speaking of the World Stage.

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