How the August decree could reduce the cost of labor
The August decree opens to a timid reduction in labor costs. But now the employer will have to make a careful assessment of the use of the new layoff periods. The analysis by Paolo Stern and Massimiliano Matteucci, Nexumstp SpA
The long-awaited August decree (Legislative Decree 14 August 2020, n.104) was published in the Official Gazette on the eve of Ferr August, 14 August. After analyzing the drafts and the technical reports, we can begin to reflect on the official text which presents various critical and sometimes contradictory aspects.
Both the Cura Italia decree and then the Relaunch decree had not introduced any tax relief in favor of companies that had not needed to use the emergency tools made available, as they had not undergone any type of reduction in working activity and, therefore, of the turnover.
In principle, any measure to reduce the cost of labor represents an interesting tool to support businesses and employment.
PURPOSE OF THE AUGUST DECREE
However, there is a long way to go from principle to corporate income statement. In this case, the August decree provides for a series of tools that should favor employment and business economic recovery thanks to lower labor costs for businesses.
The first aspect to underline, however, is the limited temporal scope of the provision which sets the expiry date of the benefits to 31 December 2020.
The second preliminary aspect is that we are once again faced with an ambiguous rule subject to various possible interpretations and therefore it will be necessary to await the provisions of practice to decipher the real intentions of the urgent legislator.
But let's go in order.
HALF-YEAR EXEMPTION FOR NEW HIRES
The first instrument to reduce labor costs concerns the possibility for employers (with the exception of the agricultural sector) to benefit from a contribution exemption in the event of the hiring of subordinate workers for an indefinite period up to 31 December 2020 with effect thereafter. entry into force of the August decree.
In case of transformation of a fixed-term relationship, logically, always subsequent to the entry into force of the decree, it is possible to request the exemption with the same characteristics and it can be combined with other exemptions or reductions in the rate of financing provided for by the current legislation, within the limits of the social security contribution due, with attention and caution to the history of the worker; in fact, it will not be possible to benefit from the exemption when the worker has had an open-ended employment relationship with the same company in the previous six months.
The contribution exemption will have a maximum duration of 6 months from recruitment and will be calculated on an annual ceiling, to be re-proportioned on a monthly basis, of € 8,060.00.
The company is responsible for "bonuses and contributions due to INAIL". The expression used by the August decree leaves the doubt as to what is meant by "contributions" due to INAIL.
This exemption cannot be applied to apprenticeship employment relationships and domestic employment relationships.
QUARTERLY EXEMPTION FOR SEASONAL WORK
For fixed-term hiring with seasonal contract made by companies in the tourism sector and spas, a contribution exemption with the same characteristics as the six-month exemption described above is recognized.
The facilitation can be combined with other concessions and will have a duration equal to the stipulated contract and, in any case, no later than three months.
The actual obtaining of this exemption is, however, subject to the authorization of the European Commission.
EXEMPTION FOR NON-USE OF SALARY INTEGRATION TOOLS
We had the opportunity to analyze how the August decree provides for the extension of wage integration tools for a further 18 weeks with different methods and different costs.
Alongside this new assistance intervention for the companies most in difficulty, the Legislator wanted to "reward" the companies that in this absolutely critical phase will not use the tools of the August decree and, therefore, will not require the extension of the support provided with the condition that the tools previously made available for the months of May and June have been used.
The intent of the Emergency Legislator is to reward entrepreneurs (excluding those in the agricultural sector) who have experienced months of absolute difficulty linked to the resumption of the first lockdown phase (March and April) and who have succeeded, after a first phase support, state (April, May and June) to restart the business activity, allowing the regular performance of work to all workers.
In this specific case, an exemption from the payment of social security contributions by the company is provided, with the exclusion of the INAIL premium (also in this case the August decree mentions "bonuses and contributions"), for a maximum period of 4 months, within the limit double the hours of wage supplement already used in the months of May and June to be re-calculated and applied on a monthly basis.
The use of the exemption must be made by 31 December 2020 and can be combined with other benefits: we point out that in case of use of this exemption the employer will be obliged to respect the prohibition of dismissal.
ASSESSMENTS BY THE COMPANY
The employer will have to make a careful evaluation about the use of the new redundancy periods and consider the convenience of letting everyone return to work or keeping someone on suspension.
The assessment will not so much be carried out on the basis of the usefulness of the work performance, but on the economic impact that the exemption from contributions could have with respect to the lack of wages for staff in cash.
The employer will have to consider the number of workers suspended between May and June and the employment needs of the coming months.
CALCULATION OF THE EXEMPTION: AN OPEN PROBLEM
However, to carry out this evaluation wisely it will be necessary to wait for the indications of practice. In fact, the method of calculating the exemption is not entirely clear.
There are several possible hypotheses.
The simplest would seem to be to calculate the hours of layoffs used by each worker in May and June and double them. This amount will determine the hours "exempt from contributions" that can be used until the end of the year by the same workers.
Another hypothesis is that of an exemption equal to the value of the contribution that would have been due if the worker had worked in May and June, instead of being placed in the CIG (virtual contribution on lost hours); this doubled value could constitute the contributory credit to be used by 31 December 2020.
Having assessed the convenience of returning all workers to service, the employer could take advantage of these months of low work intensity to increase training by using the New Fund for this purpose.
Skills refinanced with art. 4 of the August decree or in any case the Interprofessional Funds to which the company adheres.
SUD CONTRIBUTION FACILITY
The art. 27 of the August decree provides for employers (excluding agricultural and domestic workers) an exemption equal to 30% of social security contributions, with the exclusion of Inail premiums, for the period from 1 October to 31 December 2020, subject to authorization by the European Commission.
Only companies that in 2018 had a place of work located in Regions that had a per capita GDP below 75% of the EU27 average or in any case between 75% and 90% and an employment rate will be able to access this facility. lower than the national average.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/decreto-agosto-costo-lavoro/ on Sun, 23 Aug 2020 05:54:57 +0000.