Dl Labour

Fixed-term contracts, the incentive looks at agreements up to 12 months

Stabilisation aid is reserved for two million relationships signed without the obligation of a reason: they are about 80 per cent of those on a temporary basis

by Barbara Garbelli and Valentina Melis

7 May 2026

3' min read

Translated by AI

Versione italiana

3' min read

Translated by AI

Versione italiana

It is aimed at the most fragile group of temporary contracts - which is also the most numerous - the bonus envisaged by the Labour Decree to encourage their transformation into open-ended contracts. A relief from contributions to be paid by private employers up to500 euro per month for two years.

The aid will apply to stabilisations of contracts with a duration of up to 12 months, signed by 30 April 2026. These are contracts that do not provide for a reason, i.e. the justification for setting a term, which is mandatory after the first 12 months of duration. In concrete terms, these are the majority of the 2.4 million fixed-term relationships in Italia.

Short contracts

If we look at the flows of terminations of relationships in the first three quarters of 2025 (latest available data from the compulsory communications of companies to the Ministry of Labour), we see that the contracts of up to 12 months are 80 per cent.

In the first quarter of the year, terminated fixed-term contracts with a duration of up to 30 days accounted for 41.2% (961,925). Within this group, 409,000 contracts lasted between four and 30 days. Those that ended in one day numbered 380,000, while those lasting between two and three days numbered 173,000.

16.6 per cent of the relationships terminated in the first quarter of 2025 had a duration of between 31 and 90 days (388,268) and 21.3 per cent were in the range of between 91 and 365 days (497,231).

Most likely, the stabilisation incentive of the labour decree will be used by employers to stabilise contracts that are not seasonal in nature.

How the bonus works

With the new relief provided by the Employment Decree approved by the Council of Ministers on 28 April, the rebate will be available for the transformations carried out by employers from 1 August to 31 December 2026, without interruption of fixed-term employment relationships established by 30 April 2026 and relating to young people who, at the date of stabilisation, have not yet reached the age of 35 years and have never been employed on a permanent basis. To benefit from the incentive, the stabilisations must entail a net employment increase, i.e. an increase in the number of workers employed in each month, compared to the number of those employed on average in the previous 12 months. In addition, the employer must not have made individual dismissals for objective reasons (economic reasons) or collective dismissals, in the six months prior to stabilisation, in the same production unit. Domestic work and apprenticeship relationships are excluded from the benefit.

The dismissal for justified objective reasons, in the following six months, of the worker concerned by the relief or of workers of the same qualification in the same production unit, will result in the revocation and recovery of the bonus.

The Hiring Incentive

The incentive for stabilisation of fixed-term contracts is not an extension of the youth bonus reserved for the under-35s by Article 22 of the Cohesion Decree, which, after being extended by the Milleproroghe decree, ended on 30 April. It is a separate bonus, which is specifically aimed atconverting temporary relationships into stable employment relationships.

For new open-ended recruitments ofpeople under 35, the Labour Decree has provided for an ad hoc contribution relief, aimed at young people who have been without regular paid employment for at least 24 months or 12 months if they fall under the definition of disadvantaged worker according to letters c), e), f) and g) of Article 2 of EU Regulation 651/2014 (they do not have a diploma or have completed full-time training for no more than two years and are out of work; are single adults with one or more dependants; are employed in occupations or sectors with a high rate of gender inequality; or belong to an ethnic minority).