Ristori Decree and COVID-19 Additional urgent measures to support employees and companies

Below we provide a brief overview of the measures related to the COVID-19 epidemiological emergency adopted in decree-law no. 137 of 28 October 2020 on support for employees and companies.
 
In particular, we highlight the new versions of the Ordinary Wage Guarantee Fund, Ordinary Allowance and Exceptional Wage Guarantee Fund, and provisions on dismissal and exemption from social security contributions for companies that do not require redundancy fund treatment (Article 12 Ristori Decree Law).

New versions of Ordinary Wage Guarantee Fund, Ordinary Allowance and Exceptional Wage Guarantee Fund

Employers suspending or reducing their working activity due to events related to the COVID-19 epidemiological emergency may apply for the Ordinary Guarantee Fund, Ordinary Allowance and Exceptional Wage Guarantee Fund for a maximum duration of six weeks between 16 November 2020 and 31 January 2021.
These six weeks constitute the maximum duration that can be requested vis-à-vis COVID-19.
Wage subsidies previously requested and authorised, even partially, after 15 November 2020 are charged to the above-mentioned six weeks.

In addition to the six weeks of treatment granted to employers that have already been fully authorised, an additional period of nine weeks, per Decree-Law no. 104 of 14 August 2020 (converted by Law no. 126 of October 13, 2020), can also be granted after the authorised period has expired.
These six weeks are also granted to employers in sectors experiencing closure or a limitation of economic and productive activities to contain the COVID-19 epidemiological emergency.


Employers applying for wage supplementation for these six weeks will pay an additional contribution determined on the basis of a comparison between the company's turnover in the first half of 2020 and that of the corresponding half of 2019, equal to:

1. 9% of the total remuneration that would have been due to employees for hours not worked during the suspension or reduction of work (for employers with a reduction in turnover of less than 20%);
2. 18% of the total remuneration that would have been payable to employees for hours not worked during the suspension or reduction of work (for employers with no reduction in turnover).

The additional contribution is not due:

• by employers that have suffered a reduction in turnover of 20% or more;
• by employers that started business after 1 January 2019; and
• by employers in sectors experiencing closure or limitation of economic and productive activities.

To access the six weeks, an employer must apply to the National Social Security Institute, and certify the existence of any reduction in turnover mentioned above.
The National Social Security Institute authorises the treatments and, on the basis of the self-certification attached to the application, identifies the rate of the additional contribution that the employer is required to pay from the pay period following the granting of the wage supplement.
In the absence of self-certification, the rate of 18% is applied.

Applications for access to treatment must be submitted to the National Social Security Institute by the end of the month following the month when the period of suspension or reduction of work began.

In case of direct payment of the benefits by the National Social Security Institute, the employer is required to send to the Institute all the data necessary for the payment or the balance of the wage supplementation. This information should be sent by the end of the month following the month when the wage supplementation period was put in place or – if later – within 30 days after the adoption of the granting measure.

Once this period has expired, paying the benefit and related charges remain the responsibility of the employer.

Dismissal provision

Until 31 January 2021, the opening of collective redundancy procedures is precluded and – pending procedures initiated after 23 February 2020 – are also suspended, except in cases where employees who will be dismissed and who were already employed under a service contract, have been rehired by a new contractor.

Until this same date, the employer, regardless of the number of employees, is also precluded from terminating contracts for justified objective reasons and the procedures in progress are also suspended.

The above restrictions and suspensions do not apply in the event of:

• dismissals justified by the definitive cessation of the company's activity, further to the liquidation of the company without continuation, even partial, of its activity when there has not been the sale of assets or activities amounting to a transfer of business or a branch of it;
• a company collective agreement (entered into by trade unions, which are comparatively more representative at the national level) providing incentives for the termination of the employment relationship, limited to workers who adhere to the aforementioned agreement.

Also, excluded from the prohibition are dismissals in case of bankruptcy (where there is no provisional company activity) or termination has been ordered.
If the provisional activities are provided for in a specific branch of the company, dismissals are excluded from the prohibition of dismissals for sectors that are not included.

Exemption from social security contributions for companies that do not require redundancy fund treatment

In exceptional situations, private employers (not including the agricultural sector) who do not require the above wage supplementation treatments are exempted from social security contributions for a further period of up to four weeks, which can be used until 31 January 2021 within the limits of the hours of wage supplementation already used in June 2020.

Private employers that have previously applied for exemption from social security contributions may waive the requested exemption (that was not granted) and at the same time apply for access to the wage supplementation treatments mentioned above.