The Council of Ministers wanted to approve, even “symbolically”, the new labor decree on May 1st: news on fixed-term contracts, increases in payroll, cut in the tax wedge and much more.
Labor decree approved on Workers’ Day
Prime Minister Giorgia Meloni showed herself in a video, in which she communicated the approval of the long-awaited work decree, wanted (even symbolically) on May 1st: “On Labor Day, the government chooses to work and give responses to those who legitimately aspire to change their position and we do so with a series of articulated measures, the most important of all being the cut in taxes on labour”. Meloni continues: “We have freed up a 4 billion treasury thanks to the courage of some measures we had carried out, and today we are allocating it to the most important tax cut in recent decades”.
Inclusion allowance and hiring incentives
The Inclusion Allowance will replace the current Citizenship Income, it will arrive on January 1, 2024 and will affect the fragile and therefore families with over 60s, members with disabilities or minors. With this new measure, tools for activating work will also be introduced and, for employers, incentives for permanent or apprenticeship hiring of the beneficiaries of the check.
Term contracts and vouchers
An important novelty also concerns fixed-term contracts, for which there will be fewer constraints on the reasons for renewals beyond the year and no later than 24 months: “What I have read is not what you will find in the norm”, declared the Labor Minister Marina Elvira Calderone, “because the goal was certainly not to make the use of these tools more precarious but to make it easier to interpret a law that currently has application difficulties”. The threshold for “vouchers”, i.e. “occasional work”, has also risen, rising from 10,000 to 15,000 euros for those who work in the sectors of congresses, fairs, events, spas and amusement parks.
Tax wedge cut and payroll increases
The Ministry of the Economy has announced that the cut in the tax and contribution wedge until the end of the year will be increased from 3% to 7% for incomes up to 25 thousand euros and from 2% to 6% for incomes up to 35 thousand euros . “Around 4 billion are allocated, in the period between 1 July and 31 December 2023 (without further effects on the thirteenth salary), to increase the 4 percentage point cut in the tax wedge for employees compared to what is already provided for in the law balance”. Thus it has been estimated that the increase in payroll, between July and December, will reach up to 100 euros per month on average.