Labour Decree gets the green light from the House of Commons: from fair pay to the incentive package, here are the key changes
The appropriate wage is defined as the total remuneration package (Tec) set out in the national collective agreements signed by the most representative trade unions and employers’ organisations, which must be adhered to in order to qualify for recruitment incentives for young people, disadvantaged women and the unemployed in the Special Economic Zones (SEZs)
by Giorgio Pogliotti and Claudio Tucci
Key points
The House of Representatives has given the green light, with 137 votes in favour, to the decree-law containing urgent provisions on fair wages, employment incentives and combating digital labour trafficking. The measure will now be sent to the Senate and must be converted into law by 29 June, failing which it will lapse.
The measure allocates around 1 billion and addresses a number of areas, from the introduction of a living wage to the incentive package.
Here are all the main changes, in detail.
Incentive package
Job stability is being promoted through a new incentive that comes into effect when fixed-term contracts of up to 12 months are converted into permanent contracts. This takes the form of a 100% exemption from social security contributions for 24 months, up to a maximum of €500 per month for each worker. The benefit applies exclusively to the conversion of fixed-term employment contracts for non-managerial staff, with a total duration, at the date of conversion, not exceeding twelve months, who, on that date, have not reached the age of thirty-five and have never been employed on a permanent basis. The exemption applies to conversions carried out between 1 August 2026 and 31 December 2026, without any interruption to fixed-term employment contracts established by 30 April 2026. For permanent hires of those under 35, there is also an extension until the end of the year of the bonus already provided for in the Cohesion Decree and extended, via the Milleproroghe Decree, until 30 April, subject to certain restrictions. The incentive now applies until 31 December, covers a period of 24 months and consists of a total relief of up to €500 per month. The incentive applies if those under 35 are without regular paid employment and fall within the categories of ‘disadvantaged workers’. This rises to €650 if the recruitment takes place in a region of the Single Economic Zone (ZES). The incentive lasts for 12 months in relation to the recruitment of certain categories of ‘disadvantaged workers’.
Women of any age who are unemployed or have never been in employment are eligible for a 24-month reduction in social security contributions of up to €650 per month. This rises to €800 if the woman taken on permanently is resident in the regions of the Single Economic Zone (ZES Unica). The exemption is granted for 12 months in certain cases where women belonging to specific categories of ‘disadvantaged workers’ are hired. As with young people, for women too, the recruitment must result in a net increase in employment, and the company, to qualify, must not have made any redundancies in the preceding six months. In the Zes Unica, the exemption is up to €650 for 24 months: those hired up to December who are aged 35 or over and have been unemployed for at least 24 months will be eligible. The exemption applies only to employers with up to 10 employees.
