December 13, 2024
Probationary Dismissal
New rules for probation periods in fixed-term contracts: proportionality and maximum limits
“Work-Linked Law”
The Work-Linked Law introduced specific numerical criteria for determining the duration of probation periods in fixed-term contracts, amending Article 7 of Legislative Decree 104/2022 (Transparency Decree). The new rules stipulate that the probationary period must be proportional to the contract duration and duties, with a maximum limit of 15 days for contracts up to 6 months and 30 days for contracts longer than 6 months but less than 12.
While establishing a legal criterion for managing these situations is undoubtedly appropriate, the new rules risk leaving room for ambiguities in practical application. For instance, reference to “more favorable” collective provisions can be challenging, as the probation period might benefit or disadvantage both parties, depending on their assessment.
December 30, 2024
Compensation and Benefits
Fringe Benefits: Company Cars and New Tax Thresholds from 2025
“2025 Budget Law”
The allocation of company cars is a key topic both as a work tool and a fringe benefit, particularly at year-end when compensation policies are reviewed. Fringe benefits include non-monetary compensation in addition to salary.
Company cars may be allocated for work-only, personal, or mixed use. The benefit’s value is calculated according to specific legal criteria, which will change significantly starting January 2025. The allocation must be formalized in a document clarifying whether the benefit can be revoked and under what conditions.
Confirmed changes for 2025–2027 include raising the tax-exempt threshold for fringe benefits to €1,000 for employees without dependents and €2,000 for those with dependents. To qualify as dependents, children must not exceed an annual income of €4,000 if under 24 years old or €2,840.51 if older.
The non-taxable threshold also includes, even for 2025:
- Payments or reimbursements from employers for utility bills (water, electricity, natural gas).
- Expenses for the principal residence, such as rent or mortgage interest.
If the limit is exceeded, the total fringe benefit amount, not just the excess, becomes taxable.
December 30, 2024
Personnel Administration
Business Travel 2025: Obligation for Traceable Payments for Non-Taxable Reimbursements
“2025 Budget Law”
The 2025 Budget Law introduces significant changes for managing travel expenses and reimbursements for meals, accommodation, travel, and transportation. Starting January 1, 2025, to ensure deductibility for IRES/IRPEF and IRAP, as well as exemption from employee income tax, payments must be made through traceable methods. Exceptions include public transport costs, which are excluded from the new restrictions.
The regulations are linked to Articles 51, Paragraph 5, 54, and 95 of the Consolidated Income Tax Act (TUIR), also affecting representation expenses (Article 108, Paragraph 2). The goal is clear: strengthen efforts against tax evasion, particularly significant in sectors like transportation and hospitality.
Employees on business trips must use traceable payment methods, such as corporate or personal cards. Employers are required to reimburse documented expenses, even if non-traceable, but such amounts will then be subject to taxation and contributions, potentially creating tensions in personnel management. To avoid impacting net employee income, employers might consider “grossing up” non-traceable amounts, albeit at a higher cost to the company.
The new rules apply to expenses incurred starting January 2025.
December 30, 2024
Compensation and Benefits
2025 Budget Law: New Tax Tools Replace Contribution Exemptions
“2025 Budget Law”
The 2025 Budget Law introduces measures to reduce the tax burden on employees, replacing the contribution relief applied in 2024. The changes focus on two main tools: an income-proportional bonus and graduated tax deductions.
The bonus targets employees with total income not exceeding €20,000, with decreasing percentages as income increases:
a) 7.1% for income up to €8,500;
b) 5.3% for income between €8,500 and €15,000;
c) 4.8% for income between €15,000 and €20,000.
For incomes exceeding €20,000, a system of tax deductions is provided, designed to offer a benefit comparable to the previous contribution exemption. Specific exemptions and criteria for calculating total income have also been introduced, excluding items like the value of the primary residence and certain benefits for returning workers.
December 27, 2024
Fixed-Term Employment
Extended Flexibility for Fixed-Term Contracts Until December 2025 in Sectors Without Collective Agreements
“Thousand Extensions Decree”
The 2024 Thousand Extensions Decree extends until December 31, 2025, the possibility of signing fixed-term contracts lasting over 12 months with reasons determined directly by the parties, in the absence of collective agreement provisions. This measure, already in effect in 2024, provides greater flexibility for sectors where collective negotiations are ongoing or lack specific regulations.
Under current rules, fixed-term contracts up to 12 months do not require reasons. For longer durations, technical, organizational, or production needs defined by the parties or collective agreements must be specified. In their absence, autonomous determination is allowed, provided the total duration does not exceed 24 months, with a possible 12-month extension subject to labor inspectorate approval.
This extension aims to support industries like metalworking, where reason-related regulations remain unresolved. However, failure to clearly define reasons can result in automatic conversion of the contract into a permanent one, with potential compensation exceeding 12 months’ salary.
Reasons must meet criteria of concreteness, specificity, and temporariness, ensuring transparency and alignment between production needs and contract duration.
December 13, 2024
Temporary Employment
New Rules and Flexibility for Fixed-Term Staffing
“Work-Linked Law”
The Work-Linked Law broadens the scope for fixed-term staffing arrangements, increasing maximum allowable percentages.
Staffing contracts involving workers employed permanently by agencies and those covering specific situations—such as new business launches, temporary replacements, or workers over 50—are excluded from percentage limits.
An additional measure simplifies the employment of disadvantaged workers, allowing contracts without reasons even for periods exceeding 12 months. The transitional post-pandemic regime has been replaced, reaffirming the temporary nature of staffing arrangements.
December 30, 2024
Social Security Measures
Naspi 2025: Stricter Requirements for Workers Changing Jobs Before Layoff
“2025 Budget Law”
From January 1, 2025, the 2025 Budget Law introduces significant changes to the requirements for accessing Naspi, the unemployment benefit for involuntarily unemployed workers. The new rule applies to workers who, in the 12 months prior to applying for Naspi, ended an employment relationship due to resignation or mutual agreement.
Currently, Naspi eligibility requires two conditions: involuntary unemployment and at least 13 weeks of contributions in the last four years. The change mandates that, for workers changing jobs during this period, the 13-week contribution requirement must be met exclusively in the new job, excluding contributions from the previous employment.
This measure aims to prevent fraudulent practices, such as collusive agreements between workers and employers to simulate layoffs for benefit access. However, it may disadvantage those genuinely seeking new career paths that prove unsuccessful, without any intent to defraud.