Government support for business and workers in Italy

1. What government schemes(s) are available in your country to help employers and workers in the current COVID-19 crisis and for how long?

The Italian short-time work scheme is called Cassa Integrazione Guadagni (CIG), which involves a system of income support for employees affected by hourly reductions caused by a company's financial difficulties.

CIG is subdivided into ordinary CIG, which applies in the case of company difficulties due to temporary events not attributable to the company itself, and extraordinary CIG, which applies in the case of the company reorganisation, company crisis or defensive solidarity contracts (union agreements to reduce working time and avoid dismissals).

The extraordinary CIG has a maximum duration of 24 months, continuous or interrupted, and may be requested by companies that have employed on average more than fifteen employees in the previous six months. Lastly, it is also possible to agree on an individual level with the employee in order to change his working hours from full-time to part-time.

Employers operating in areas outside the application of the CIG may, through an agreement with the trade unions at national level, set up a bilateral solidarity fund, which acts as a CIG.

In absence of a bilateral solidarity funds, the Solidarity Integration Fund – Fondo Integrazione Salariale (FIS) is available for employers with an average of more than five employees and operating in sectors outside the CIG.

In order to counteract the loss of jobs due to the measures taken to combat the COVID-19 epidemic, on 17 March the government introduced several measures that derogate from the normal discipline.

The coronavirus related short-time work scheme are divided into:

  • Coronavirus CIG and FIS; and
  • Coronavirus CIG in derogation;

As a result of these measures, in the event of suspension or reduction of activity due to events related to the COVID-19 emergency, all companies may apply for some sort of short-time work scheme up to the end of August 2020. The remedy will last for a maximum of nine weeks.

In more detail, the periods of time needed due to Coronavirus caused by the CIG do not count for the maximum duration of past or future instances of short-time schemes.

Comparable measures have been adopted for access to the Solidarity Fund, the fund set up for companies with an average of more than five employees operating outside the scope of the CIG.

For companies operating in sectors outside the scope of the CIG and the Solidarity Fund, the public authorities may, as a result of the COVID-19 emergency, grant the CIG even in the absence of the requirements dictated by the law.
The treatment thus granted will have a duration equal to the suspension of the employment relationship and in any case will not exceed nine weeks.

Companies that already benefit from the extraordinary CIG may suspend that treatment, replacing it with a period of nine weeks of ordinary CIG.

2. What payments are made under the scheme(s) and how/by whom?

The short-time schemes result in a reduction of the working hours or their suspension.

The remedy amounts to 80% of the total remuneration that would have been due to the worker for hours not worked, between zero hours and the contractual time limit. A ceiling is set on the employee's remuneration, reviewed annually by the government.

The payment is made by the company to eligible employees and is then either reimbursed by the social security institution or offset against the contributions due.

In the event of serious and documented financial difficulties, the undertaking may ask the social security institution to pay the benefit directly.

An ordinary contribution in the form of taxation of remuneration and an additional contribution will be paid by the beneficiary undertakings. The additional contribution is not due in case of:

  • interventions caused by objectively unavoidable causes;
  • interventions in favour of undertakings subject to bankruptcy proceedings;
  • interventions in favour of undertakings subject to receivership.

3. Which employers and employees are covered?

The short time work schemes cover all employees with 90 days' seniority in the company, including apprentices. Executives are excluded.

As for the employers, access to the CIG may be requested by undertakings operating in certain sectors (e.g. manufacturing, transport, construction). Craft, tertiary and credit companies are expressly excluded.

Access to the CIGS may be requested by undertakings who employed in the previous six months more than 15 employees for industrial companies and more than 50 employees for commercial or construction companies. Air transport or publishing undertakings may apply for the CIGS regardless of the number of employees.

For companies that do not fall within the scope of the CIG, it is foreseen that when the threshold of 5 employees is exceeded, the company will join a bilateral fund, if any, or the FIS, which will function as a CIG in case of need.

With regard to the measures introduced to counter the coronavirus emergency, instead, all employees will be covered by the CIG, even if they do not meet the seniority requirements required by law. In case of Coronavirus CIG in derogation, even the executives may be included, but it varies from region to region.

4. What procedure(s) does an employer have to follow to be able to take advantage of the scheme(s)?

For access to CIG (and FIS):

  • The undertaking is required to inform the trade unions in advance of the reasons for the need to apply for the CIG and the foreseeable duration and reduction for the workers involved;
  • at the request of one of the parties, a joint examination must be carried out. The entire procedure must be completed within 25 days of the date of communication;
  • the undertaking applies to the social security institution within 15 days of the start of the hourly reduction;
  • the social security institution will investigate the admissibility of the application and either accept or reject the application.

For access to CIGS: similar to the procedure for the CIG, the prior communication must also be sent to the Ministry of Employment.

For access to Coronavirus CIG and FIS:

  • communication to the trade unions and joint examination is reduced to 3 days;
  • the social security institution cannot make any inquiries;

For access to Coronavirus CIG in derogation:

  • the regions conclude an agreement with the trade unions for access to the Coronavirus CIG in derogation and may lay down requirements for access;
  • companies covered by the requirements apply to the region;
  • the region will investigate the admissibility of the application and either accept or reject the application.

5. Are there any other important eligibility criteria?

The prerequisites for receiving the CIG are temporary economic crisis events for which the undertaking is not responsible.

The prerequisites for receiving the CIGS are the suspension or reduction of activity due to:

  • corporate restructuring;
  • corporate crisis;
  • defensive solidarity contracts.

6. Are employees covered by the scheme(s) protected from dismissal?

Please note that until 17 May 2020 companies are not allowed to dismiss workers for economic reasons.