EMCC European Monitoring Centre on Change

Short-time working allowances (Ordinary Wages Guarantee Fund – CIGO –, and Extraordinary Wages Guarantee Fund – CIGS –, Derogatory Wages Guarantee Fund - CID -, solidarity contracts, solidarity funds)

Italy
Phase: Management
Typ:
  • Response to COVID-19
  • Income support for workers
  • Working time flexibility
Senast ändrad: 15 July, 2020
Lokalt namn:

Ammortizzatori sociali in costanza di rapporto di lavoro (Cassa integrazione guadagni ordinaria – CIGO –, straordinaria – CIGS – e in deroga - CID -, contratti di solidarietà, fondi di solidarietà)

Engelskt namn:

Short-time working allowances (Ordinary Wages Guarantee Fund – CIGO –, and Extraordinary Wages Guarantee Fund – CIGS –, Derogatory Wages Guarantee Fund - CID -, solidarity contracts, solidarity funds)

Coverage/Eligibility

Act no. 148/2015 (Jobs Act – unemployment scheme for temporary crisis, hereafter ‘JACT’) reformed the whole set of rules concerning income support measures for people in employment (unemployment benefits schemes in the form of short-time allowances). JACT abolished all previous norms and set up a consolidated text envisaging the possibility for companies to have access to the following tools:

  • the Ordinary Wage Guarantee Fund (Cassa integrazione guadagni ordinaria, CIGO);
  • the Extraordinary Wage Guarantee Fund (Cassa integrazione guadagni straordinaria, CIGS);
  • the Dergogatory Wage Guarantee Fund (Cassa integrazione in deroga, CID)
  • solidarity contracts;
  • solidarity funds, among which the Wage Integration Fund (Fondo di Integrazione Salariale, FIS).

In the context of the COVID-19 crisis, a new decree law (No. 18/2020 of 17 March 2020) has extended the use of the existing wage guarantee schemes (CIGO, CID and FIS) for temporary suspensions of work or reductions of working time due to the pandemic. In addition, an agreement between the social partners and the Italian Banking Association was signed on 30 March 2020 concerning the anticipation by banks of income integration measures for workers temporarily suspended from work due to the COVID-19 emergency. This agreement, in force until 31 December 2020, aims at supporting workers waiting for the payment of income support measures by the National Social Security Institute (INPS).

Another support instrument (Cassa Integrazione in Deroga, CID), introduced during the global financial crisis and later suppressed - was re-introduced by the new decree to support small companies with fewer than five employees which do not have access to the other support instruments.

A new income support measure covered other categories of workers eligible for an allowance of €600 for the months of March, April and May. These categories are the following:

  • professionals with a VAT number active on 23 February 2020 and workers with coordinated and continuous collaboration relationships;
  • self-employed registered to the dedicated mandatory social insurance schemes (Assicurazione Generale Obbligatoria, AGO);
  • seasonal workers in the tourism sector and in thermal establishments that involuntarily ended their employment in the period between 1 January 2020 and 17 March 2020, who are not employed and do not receive a pension;
  • fixed-term agricultural workers, who do not receive a pension and have worked at least 50 days in agriculture in 2019;
  • workers enrolled in the pension fund for workers in the entertainment industry (Fondo pensioni Lavoratori dello spettacolo), with at least 30 daily contributions paid in the year 2019 to the same fund, with an income of no more than €50,000, and who do not receive a pension.

Main characteristics

The Ordinary Wage Guarantee Fund (Cassa integrazione guadagni ordinaria, CIGO) is a wage guarantee instrument activated in case of suspension of, or reduction in, working activities due to temporary events that cannot be ascribed to the company. The maximum duration is 13 weeks, which can be extended up to 52 weeks. Decree law No. 18/2020 of 17 March 2020 has extended the use of CIGO for workers temporarily suspended from work due to the COVID-19 crisis for 14 weeks. 

The Extraordinary Wage Guarantee Fund (Cassa integrazione guadagni straordinaria, CIGS) is a wage guarantee instrument authorised by the Ministry of Labour and Social Policies and available to companies staffed with more than 15 employees (or 50 employees in case of commercial businesses). CIGS can be activated under the following conditions:

  • business restructuring for a maximum period of 24 months (not necessarily consecutive) over a five-year period (to be counted from the date when such payment begins);
  • business crisis for a maximum of 12 months;
  • solidarity contracts for a maximum time span of 24 months (not necessarily consecutive), which can be extended up to 36 months.

Solidarity contracts are wage guarantee instruments activated through agreements concluded by union associations and employer organisations with the aim to avoid, in whole or in part, staff reductions through a reduction in employees’ working hours.

Solidarity funds are wage guarantee instruments set up through collective bargaining agreements concluded between union associations and employer organisations in those sector not covered by CIGO and CIGS. They aim at protecting workers’ income in case of suspension or termination of working activity. Today there are basically three types of solidarity funds:

  • Bilateral solidarity funds: instituted according to decree law 148/2015 in all those sectors not covered by other wage guarantee funds (CIGO and CIGS);
  • Alternative bilateral solidarity funds: they apply to the craft and temporary agency work sectors, where bilateral wage guarantee schemes were already operating before 2015;
  • Wage integration fund (Fondo di integrazione salariale, FIS): managed by the National Institute of Social Security (INPS) for all those companies staffed with more than 5 employees which are not covered by other wage guarantee funds (CIGO, bilateral solidarity funds or alternative bilateral solidarity funds).

The table below provides additional details for all the instruments:

 

Share of contribution (amount)

Benefit (type and duration)

Union/Administrative procedure

Reindustrialisation plan assessed along with union associations,

Company Works Councils (Rappresentanze sindacali aziendali, RSAs), and Works Councils (Rappresentanze sindacali unitarie, RSUs)

CIGO

Ordinary contribution:

to be paid by the company, from 1.70% to 4.70% according to the sector and staff headcount

Additional contribution: to be paid by the employer: a) 9% up to 52 weeks over a five-year period (to be counted from the date when payment begins); b) 12% up to 104 weeks; c) 15% beyond the threshold specified below

 

For all the reasons: 13 weeks, which can be extended up to a maximum of 52.

The company informs RSAs/RSUs or union associations of the reasons for the suspension of, or reduction in working hours, of its extent and expected duration, as well as of the number of workers concerned. This communication can be followed by a joint assessment of the situation, aimed at protecting workers’ interests. The procedure shall be finalised within 25 days (10 days for company staffed with up to 50 employees). The application shall be submitted to the National Institute of Social Security (INPS) within 15 days from the beginning of the suspension of, or reduction in working activities.

 

CIGS

Ordinary contribution: 0.90%, of which 0.60% to be paid by the company or the political party, and 0.30% to be paid by the worker.

Additional contribution: to be shouldered by the worker: a) 9% up to 52 weeks over a five-year period (to be counted from the date when payment begins); b) 12% up to 104 weeks; c) 15% beyond the threshold specified below

 

Business restructuring: 24 months

 

Business crisis: 12 months

 

Industrial and craft businesses belonging to the construction sector, and businesses belonging to the stone-cutting sector: 30 months

 

The company informs RSAs/RSUs or union associations of the reasons for the suspension of, or reduction in working hours, of its extent and expected duration, as well as of the number of workers concerned. The application for the joint assessment of the company situation shall be submitted within three days. The application shall be forwarded to either the relevant territorial/regional office or the Ministry of Labour and Social Policies with a view to giving notice to the parties. The procedure shall be finalised within 25 days (10 days for companies staffed with up to 50 employees).

 

The benefit shall be approved by ministerial decree, to be adopted within 90 days from the submission of the application.

In case of business crisis or business restructuring, the company shall submit to RSAs/RSUs or union associations a recovery plan or a programme outlining production, financial, or management problems due to external factors.

The plan sets out the goals aimed at carrying on business activities and at maintaining employment.

 

 

Solidarity contracts

 

24 months, which can be extended up to 36 months

Solidarity contracts can be entered into by all the companies falling within the scope of the applicable legislation on CIGS.

 

 

Solidarity funds

Bilateral solidarity funds: ordinary contribution to be paid by the employer (two thirds) and by workers (one third)

 

Alternative bilateral solidarity funds: the contribution cannot be lower than 0.45% of the amount of pay considered for the calculation of social security contributions

 

Wage integration fund: companies staffed with more than 15 employees: 0.65% (two thirds to be paid by the employer and one third to be paid by workers); companies staffed with 5–15 employees: 0.45% (two thirds to be paid by the employer and one third to be paid by workers)

Bilateral solidarity funds provide two types of allowances: the solidarity allowance (aimed at avoiding collective redundancies or several individual dismissals based on justified objective reasons) and the ordinary allowance (in case of suspension of, or reduction in working activities for the reasons provided for by the applicable legislation on CIGO and CIGS). The duration of the allowance varies upon the reason behind its activation.

 

 

Workers whose working hours are expected to be suspended or reduced by more than 50% (calculated over a 12-months period) are contacted by the local employment centre with a view to drafting the so-called ‘customised service pact’, which outlines the personal employability profile pursuant to the standards set out by the National Agency for Active Labour Market Policies (ANPAL). In case workers fail to report to the employment centre, the latter gives notice – through the dedicated information system – to ANPAL and INPS, which sets out specific sanctions. These sanctions range from a reduction in the amount of the allowance up to its complete elimination. Moreover, in case of a working activity carried out during the provision of the allowance, the worker shall give prior notice to the local INPS office.

In the context of the COVID-19 outbreak, the Italian government passed in March a new decree law (No. 18/2020 of 17 March 2020) allowing the utilisation of the Ordinary Wage Guarantee Fund (Cassa Integrazione Guadagni Ordinaria, CIGO) and the Wage Integration Fund (Fondo di Integrazione Salariale, FIS) for temporary suspensions of work or reductions of working time due to the pandemic.

Employers who suspend or reduce their activity for events attributable to the COVID-19 pandemic can accede to the Ordinary Wage Guarantee Fund (CIGO) or the Wage Integration Fund (FIS) for a maximum duration of 14 weeks starting from 23 February 2020 until the end of August 2020. The periods of utilisation of the CIGO and the FIS for ‘COVID-19’ reasons are excluded from the calculation of the maximum duration of ordinary treatments. Moreover, companies making use of the benefit are exempted from the additional contribution that is normally imposed on companies benefiting from wage subsidies.

The decree law introduces a special measure (CID) for private employers not covered by the ordinary benefits, that is, those employing fewer than five employees. However, domestic workers are excluded from the benefit.

The amount of the benefit depends on the previous remuneration: for gross monthly wages below € 2,159.48, the benefit amounts to € 939.89; for gross monthly wages above € 2,159.48, the benefit amounts to € 1,129.48. 

In addition, an agreement between the social partners and the Italian Banking Association (under the auspices of the Ministry of Work and Social Policies) was signed on 30 March 2020 concerning the anticipation by banks of income integration measures (CIGO, CID and FIS) for workers temporary suspended from work due to the COVID-19 emergency. This agreement, in force until 31 December 2020, aims at supporting workers waiting for the payment of income support measures by the National Social Security Institute (INPS). The advance payment of the allowance due will take place by opening credit in a special current account, if requested by the bank, for a flat rate overall amounting to €1,400, based on 9 weeks of zero-hours suspension (proportionally reduced in case of shorter duration), to be re-proportioned in case of a part-time relationship.

Finally, an income support measures was introduced by the new decree, consisting in an allowance of €600 for the months of March, April and May for professionals, workers in continuous and coordinated collaboration agreement, self-employed, seasonal workers and workers of the entertainment industry. The benefit will be paid directly from the National Social Security Institute (INPS) and aims at supporting income of those workers which are not eligible for other income support measures such as the different wage guarantee funds.

Funding

  • National funds
  • Employees
  • Employer
  • Companies

Involved actors

National government
Should any cases of CIGO/CIGS activation arise that are of utmost relevance for the Italian economy, the government – through its relevant ministries – may summon the parties and try to promote CIGO/CIGS agreements.
Public employment services
The new set of rules establishes that workers benefiting from the wage subsidy will be contacted by the local employment centre, which prepares the customised service pact. With a view to activating the measures envisaged in the customised service pact, a coordination action is carried out by INPS, regional authorities, and the Joint Information System on Active Labour Market Policies.
Employer or employee organisations
In relation to the Wage Guarantee Fund (Cassa Integrazione Guadagni, CIG), a union-based procedure is to be implemented. The procedure is managed by RSAs and RSUs or, should they not exist within a company, by the comparatively most representative union associations at national level.
Övriga
The company shall submit the application to INPS and, at the same time, to the Directorate-General for Active and Passive Labour Market Policies of the Ministry of Labour and Social Policies. Before authorising the measure, INPS assesses whether the requirements are met.

Effectiveness

The number of hours authorized in May 2020, considering only the authorizations for the health emergency, amounted to 849.2 million (in line with what was already authorized in April 2020, i.e. 832.4 million). For the sake of comparison, the annual number of authorised hours in the worst year after the financial crisis, in 2010, was 1,198.5 million).

Strengths

These instruments have the strength of keeping workers in employment in times of crisis, reducing the number of dismissals.

Weaknesses

During the COVID-19 pandemic, particular weaknesses have been highlighted concerning the payment of CID, which experienced serious delays and left a significant number of workers without income.

Exempel

Alternative bilateral solidarity funds: Artigianato (craft sector), Lavoratori in somministrazione (agency workers) Bilateral solidarity funds: Fondo Poste, Fondo Credito, Fondo Assicurativi, Fondo Trasporto Pubblico, Fondo Credito Cooperativo, Fondo di solidarietà del Trentino, Fondo Trasporto Aereo, Fondo di solidarietà di Bolzano - Alto Adige, Fondo di solidarietà per i lavoratori del settore marittimo - SOLIMARE
Useful? Interesting? Tell us what you think. Hide comments

Eurofound welcomes feedback and updates on this regulation

Lägg till ny kommentar