The new participation law

Private employees, how profit distribution works in 8 questions and answers

One of the conditions of the new rules is that the company must distribute no less than 10% of the total profits. In eight questions and answers we try to clarify the new regulations

by Giorgio Pogliotti

(Adobe Stock)

3' min read

3' min read

There are four areas of worker participation in the company provided for by the new law definitively approved by the swenate and inspired by the CISL proposal: managerial, organisational, economic-financial and consultative. But how can workers appoint their representatives on management boards or supervisory boards? How is the participation of workers in the profits and results of the company incentivated, including through share ownership? What happens if shares are distributed as a (voluntary) substitute for negotiated performance bonuses? How are workers involved in decisions concerning the various production and organisational phases of the company's life? In eight questions and answers we try to clarify these novelties.

What incentives are provided for workers to whom profits are distributed?

The new law introduces a transitional amendment to the regulations on the substitute tax on personal income tax and regional and municipal surcharges, on remuneration consisting of performance bonuses and forms of profit-sharing. For 2025, the limit of the total amount to which the 5% substitute tax applies is raised from EUR 3,000 to EUR 5,000 gross, in the event of the distribution to employees of a portion of company profits not lower than 10% of the total profits, carried out in implementation of collective, company or territorial agreements.

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What group of workers can benefit from this tax incentive?

Private employees only. Provided they have an employee income not exceeding EUR 80,000 in the year preceding the year in which the emoluments were received. The substitute tax rate is 5% until 2027, then it becomes 10% when fully operative.

What are employee financial participation plans?

Companies may provide for employee financial participation plans, which may identify the instruments of employee participation in the company's capital from among those provided for by the Civil Code in Articles 2349 (shares and financial instruments in favour of employees), 2357 (purchase of own shares), 2358 (other transactions on own shares) and 2441, paragraph 8, (offer of shares for subscription to employees, excluding option rights of other parties), as well as the allocation of shares in lieu of performance bonuses.

What tax treatment is provided for the allocation of shares in lieu of a performance bonus?

In 2025, dividends paid to employees from shares granted in lieu of the performance bonus in an amount of up to EUR 1,500 per year are 50% tax-free.

How is management participation implemented: is there an automatic application in spas?

No. It is the company statutes that define the management participation of employees. In public limited companies (or limited partnerships) organised according to a two-tier governance model - with a management board and a supervisory board - it is always the company statutes that may provide, if the case is regulated by collective agreements, for the participation in the supervisory board of one or more employee representatives, identified on the basis of the procedures defined by the agreements, in compliance with both the requirements of professionalism and honourableness required for board members and the provisions on subjective grounds for exclusion from the relevant appointment.

Lawyer Fabrizio Daverio, founder of the Daverio & Florio law firm, points out that 'the law merely provides for the possibility, not the obligation. the choice is left to the companies and the collective agreements the crux is and will be, therefore, in its actual application. There is in fact a double requirement: both that of the amendment of the company statutes and that of the stipulation of appropriate collective agreements (of whatever type). This intertwining of conditions makes its actual implementation unlikely'.

And how is management participation implemented in companies not organised according to the dualistic model?

The articles of association may provide, where the case is regulated by collective agreements, for the presence in the board of directors and, where constituted in the board's internal committee (management control committee), of one or more members representing the interests of employees and identified by the employees themselves. The general requirements of independence, honourableness and professionalism also apply in this case; moreover, these members may not take up management positions within three years of leaving office (if not already held in the same company).

What role can joint commissions play in the organisation of corporate work?

Companies may set up joint committees, composed of an equal number of company and workers' representatives, to draw up proposals for improvement and innovation plans for products, production processes, services and work organisation. Still on the subject of workers' organisational participation, companies can also provide in their organisational chart, in implementation of company collective agreements, the figures of those responsible for training, welfare plans, remuneration policies, and quality of workplaces. Enterprises with fewer than 35 workers may promote, also through bilateral bodies, forms of worker participation in the organisation of enterprises.

How does workers' consultative participation take place?

In joint committees, unitary trade union representatives or company trade union representatives or, failing that, workers' representatives and territorial structures of sectoral bilateral bodies may be consulted in advance on company decisions, express opinions and proposals on the substance of the decisions that the company intends to take.

For representatives serving on joint committees, training is provided, including joint training, of no less than ten hours per year, paid for by the company, bilateral bodies, inter-professional funds, and the New Skills Fund.

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