The 2016 – 2017 – 2018 Budget Laws have put a significant impact on the issues of labour productivity and corporate welfare, marking a real turning point on the issue.

Until 2016, the only rules governing the matter were, in particular, those provided for – with particular but not exclusive reference – from Articles 51 and 100 of the Single Income Tax Text – TUIR (DPR 917/1986), whose indications relate to a range of services (e.g. supplementary benefits, supplementary health benefits and some forms of social protection offered by the insurance system) which do not cover the full range of services in practice offered by companies to their employees. As a result, canteen, transport, nurseries, health services, family support, textbooks, summer holidays and so on have long been among the services enjoyed by only employees of multinationals or medium and large companies, more easily able to voluntarily bear the burden of benefits offered to their workers. Type of On-Top Direct Funding Welfare.

With the last three Budget Laws – law 28 December 2015, No. 208, Article 1, commi 182-190; December 11, 2016, No. 232, art. 1, commi 160-162; December 27, 2017, No. 205, art. 1, commi 28 and 161 – the perspective has literally changed thanks in particular to a series of innovations and incentives concerning the productivity premium instrument linked to the company's results in terms of productivity gains, profitability, quality, efficiency and innovation of Italian companies, and transformable, precisely with considerable tax relief, into welfare.

Incentives for contributions to forms of supplementary welfare

Article 51 of the TUIR identifies a large panel of services that can be provided to the employee that do not constitute income from employees and are deductible from corporate income, with tax benefit for both workers and companies. Further tax breaks were then introduced by the aforementioned Budget Laws (below marked by an asterisk):

  • supplementary health care contributions paid by the employer or the worker to entities or funds with only welfare purposes in accordance with provisions of contract or agreement or company regulation, which operate in the areas of intervention established by the decree of the Minister of Health (turkish and Sacconi decrees) for an amount not greater than 3,615.20 euros in total;
  • contributions for supplementary pension schemes in the limit of 5,164.57 euros;
  • employer's food administrations, as well as those in canteens organised directly by the employer or managed by third parties, or up to the total daily amount of EUR 5.29, increased to EUR 7 if electronically rendered, the benefits and replacement allowances paid to construction workers, other temporary work facilities or production units located in areas where there are no catering facilities;
  • the services of collective transport services to generality or to categories of employees, even if they are entrusted to third parties (including public services);
  • the sums paid or reimbursed to the general or categories of employees by the employer or the expenses" incurred by the employer directly, voluntarily or in accordance with provisions of the contract, agreement or company regulation, for the purchase of subscriptions for local, regional and interregional public transport of the employee and the dependents ex art. 12 TUIR (introduced by the Budget Act for 2018);
  • the use of the works and services recognized by the employer voluntarily or in accordance with provisions of contract or agreement or company regulation for education, education, recreation, social and health care or cult of the generality of employees or their categories and family members under art. 12 TUIR (amended by the 2016 Budget Act);
  • The sums, services and benefits provided by the employer to the generality of employees or to categories of employees for the use, by the family members indicated in Article 12, of education and education services also in preschool age, including the supplementary and canteen services associated with them, as well as for the frequency of playrooms and summer and winter centres and for scholarships for the same family members (modified by the Budget Act for the same family members (modified by the Budget Act for the same family members('modified by the Budget Act for the same family members' 2016).

The 2019 Budget Act, after the important innovations introduced by the three previous economic manoeuvres, in fact marks a setback with regard to interventions in favor of corporate welfare. The Maneuver does not provide for specific measures in this regard and merely indicates that some of the resources that will be allocated through the Family Policy Fund will be allocated to life-work reconciliation initiatives and "corporate family welfare". Corporate welfare, which in recent years has proved to be a factor in the renewal of bargaining and industrial relations, as well as the modernisation of the employment relationship, therefore seems to be out of the public eye of the yellow-green government.

Corporate welfare in the 2019 Budget Act

The wave of corporate welfare reforms that began with the Stability Law of 2016, then continued with the 2017 and 2018 Maneuvers, seems to have come to a strong halt.

In fact, the yellow-green government has limited itself to including a reference to corporate welfare within Article 1 paragraph 482 of the Maneuver for 2019. This paragraph states that the "Family Policy Fund, "It is important to ensure that the rights and rights of the elderly are not affected by the crisis in the middle of the year.

The text goes on to indicate the interventions that the Fund will support at priority level during 2019. Among these, within letter n, it is openly specified that some of the resources will be allocated to "life and work-time reconciliation initiatives, as well as the promotion of corporate family welfare, including the actions referred to in Article 9 of the Act 8 March 2000, n. 53".

Support for measures under Law 53/2000

Although the text is very generic, it is more than likely that projects and interventions to promote corporate welfare will be funded in 2019. In this regard, the Maneuver cites the measures provided for by Article 9 of Law 53/2000.

But what does this legislation mean? This is a series of interventions involving:

  • projects to enable the mother worker or the father worker to take advantage of particular forms of flexibility in hours and work organisation, including part-time, smart working and telecommuting, flexible hours in or out, hour bank, flexibility on shifts, concentrated hours;
  • training programmes for reintegration of workers after the period of leave;
  • projects to replace the business owner or self-employed person at a time when they are benefiting from the compulsory period of abstention or parental leave;
  • interventions and actions to encourage the replacement, reintegration, articulation of work performance and training of workers with minor or self-sufficient dependent children.

The vision of corporate welfare in the Maneuver of 2019

No new interventions on corporate welfare have been planned for 2019. While this is a setback compared to the reforms introduced in recent years, it highlights how – at least for the time being – it has chosen not to question and distort what they are doing so far. For example, the incentives for performance bonuses and their possible conversion to corporate welfare have not been affected: the possibility, therefore, of "welfarising" the productivity premium following a second-level enterprise agreement, and on the basis of an autonomous worker's choice, will also be viable next year.

However, it seems to be possible to say that at the moment the issue does not appear to be of particular interest to the Government, which seems to consider corporate welfare only from a point of support for parenting. The Maneuver, in fact, speaks exclusively in the part dedicated to the Family Policy Fund and underns – with the expression corporate family welfare – a vision of corporate welfare mainly aimed – if not exclusively – at the harmonisation of working and care times.

In this sense it should be emphasized that not only is there no interpretation of corporate welfare as a potential supplementary tool for state intervention in welfare, but also one that sees it as an opportunity to renew first- and second-tier bargaining, to strengthen the purchasing power of workers and, more generally, to modernize the employment relationship and industrial relations together.

Like the Budget Laws of previous years, the 2018 maneuver has also included some interesting news on corporate welfare. Even if we are not facing a real "revolution" like the one that took place in 2016, for next year companies and employees who will benefit from welfare goods and services will enjoy new benefits. That's what it's all about.

A new opportunity for corporate welfare: public transport

The main novelty contained in the 2018 Corporate Welfare Budget Act concerns the introduction, within paragraph 2 of Article 51 of the Tuir, of the new letter "d-bis". This new formulation provides for the exclusion from the working income of those sums paid or reimbursed to the generality of employees (or categories of these) by the employer for the purchase of subscriptions for local, regional and interregional public transport.

In other words, from 2018 Italian companies will also be able to include within their welfare plans the possibility to pay or refund the subscription for buses, trams, metro and train of their employees (but also of the latter's family members) being able to count on a concrete tax favor: complete deductibility of the figure if the welfare plan is the result of an agreement between the company and the unions; or deductibility of 5 per 1,000 of the total if the initiative is one-sided.

Finally, remember that, unlike when the purchase is made directly by the employee, in the event that the corporate welfare plan provides for the reimbursement or purchase of the public transport subscription there is no spending limit.

Some considerations 

Even for the year 2018, the Legislator continues to support companies that want to introduce welfare goods and services as tools to support pay. In fact, in the last three years, the government's allocation on this front has been substantial: it started with a figure of 483 million euros in 2016, and then up to 520 million euros for 2017 and 2018.

As in previous years, the Legislator has set clear goals for corporate welfare in 2018. In particular, by including public transport in Article 51 of the Tuir, it sought to expand the performance basket with the aim of promoting innovative business policies and increasing the possibilities of action related to corporate welfare.

In this direction, in addition to making available services related to a range of needs not adequately covered by public welfare – the support of the purchasing power of the most disadvantaged or dependent workers, the difficulties of conciliation between work and family responsibilities – corporate welfare is increasingly understood as a tool capable of fostering a virtuous exchange between improving the well-being and income of workers and greater productive efficiency of the enterprise. , a reduction in absenteeism and a strengthening of engagement between companies and employees.

The 2017 Stability Act confirms and extends the lines of action initiated by our country in terms of corporate welfare and work-family reconciliation. Since the 2016 Stability Act, the Government has taken a series of measures aimed at boosting corporate welfare through essentially two tools: the productivity premium, as a source of resources to provide welfare goods and services to employees, and the expansion of the basket of services through the update of Article 51 of THE TUIR.

The 2017 Stability Act confirms this trend by expanding the use of the productivity premium and strengthening maternity support tools as an improvement on work family reconciliation.

The government crisis, however, is likely to have a very heavy effect on these measures. Some of them require the approval of specific implementing decrees to be implemented, while others that would have to operate in synergy, such as those on smart working and non-entrepreneurial self-employment, are in the middle of legislative processes that are more uncertain than ever. Others, started experimentally, should have been corrected and improved.

Measures on productivity premium and corporate welfare

The financial manoeuvre provides for the extension of the scope of productivity premium concessions and enhances the role of corporate welfare. Already in the Stability Act 2016 it was envisaged that employees could receive result bonuses and profit-sharing by enjoying a 10% replacement rate, or to convert the same premium into welfare goods and services by enjoying the tax breaks provided by art. 51 of the TUIR – without that that these services contributing to the formation of employee income, within specific limits.

The 2017 Budget Act aims to consolidate the path taken by expanding the reach of beneficiaries and the amounts of premiums: the maximum cap on employee income that allows access to the subsidized tax is raised from 50,000 to 80,000 euros; The amounts of premiums payable increase from 2,000 to 3,000 euros in general, and from 2,500 to 4,000 for companies that involve workers equally in the organization of work.

In addition, the range of services included in Article 51 of the TUIR, which had already been updated last year to include all childcare services and opening up to care services for elderly or non-self-sufficient family members, is expanding. "Article 51, paragraph 2, of TUIR – reads the text of the Stability Law 2017 – include the contributions and premiums paid by the employer in favour of the generality of employees or categories of employees for benefits, including in insurance form, which are concerned with the risk of non-self-sufficiency in the fulfillment of the acts of daily life, or for the purpose of the risk of serious illnesses." It is also specified that they do not contribute to the formation of the income of employees, nor are contributions to supplementary pension forms and health care contributions subject to the regulated replacement tax, even if they exceed the previously applicable limits of EUR 5,164.57 and EUR 3,615.20 respectively.

Birth and conciliation measures

In addition to the corporate welfare measures, the Stability Act also provides for several measures that promote the reconciliation between life and work, although still too focused on mere monetary transfers:

  • Bonus "mom tomorrow": from January 1, 2017 is recognized a premium at the birth or adoption of less than the amount of 800 euros. The prize, which does not contribute to the formation of the total income, is paid by the INPS in one solution, at the request of the future mother, from the completion of the seventh month of pregnancy or at the time of adoption;
  • Nursery vouchers: Starting in 2017, for those born on January 1, 2016, a voucher of 1,000 euros per year is set up on 11 monthly payments for the payment of fees related to the attendance of public and private nurseries, as well as for the introduction of forms of support at home for children under the age of three suffering from serious chronic diseases. The voucher is paid by the INPS. It should be noted that if you use the Nursery Voucher, you will also not be able to take advantage of the tax deduction provided for the documented expenses of enrolment in nurseries incurred by parents (equal to 19% of the total documented annual expenses, incurred up to a maximum of 632 euros), nor the Voucher Baby Sitter. An implementation decree will be needed for implementation;
  • Parental leave for employed father: introduced experimentally in 2013, it increases to 2 days for 2017, and to 4 in 2018 (5 if one applies to those of the mother). It should be used within 5 months of birth even non-continuous;
  • Voucher baby sitter: given the success of the trial, the "Voucher Baby Sitter" is extended for the years 2017 and 2018, i.e. the possibility for the working mother to apply, at the end of maternity leave and within the next eleven months, as an alternative to parental leave, vouchers for the purchase of baby sitting services or daycare. This is 600 euros per month for 6 months, 3 for self-employed women. Finance has increased the resources allocated to self-employed women;
  • Birth support fund for access to credit: In order to support families and to boost the birth rate, a revolving fund, called the 'Birth Support Fund', is set up at the Presidency of the Council of Ministers to promote access to credit for families with one or more children, born or adopted from 1 January 2017 , through the issuing of direct guarantees, including guarantees, to banks and financial intermediaries. In this case, too, a ministerial decree will be used for the start-up.

Risks of political instability

However, some of these measures, which could have an improving impact on the lives of many citizens, promote their chances of work-life balance, are at least partially unfulfilled. The resignation of the Renzi government and the consequent political uncertainty, as mentioned, could in fact delay (if not prevent) the approval of many ministerial decrees necessary to make the legislation on welfare and conciliation fully operational (as could also happen in other areas, such as the anti-poverty law).

If the consultations lead to a government that will work in continuity with the resignation, presumably, there should not be any major hitches. But if a "breaking" executive were to be established, a continuity of policies is not likely to be guaranteed. And the prospect looks even more uncertain in the event of a return to the ballot box.

A situation of political instability that can therefore have important repercussions for the country on these fronts as well.

The innovations introduced by the Stability Law 2016 are many and important: let's see in detail what changes for businesses and workers in terms of welfare and productivity.

Some key rule changes in force since January 1, 2016 relate to corporate welfare, i.e. the set of benefits granted so far only on a voluntary basis by the company to its employees in the form of services and benefits, and productivity premiums paid in the private sector to employees due to high performance and high quality of work done.

In the first case, corporate welfare is substantially enhanced by the Stability Law 2016 through three changes to Article 51 of the Tuir. The new rules, in fact, have:

  • overcoming the aspect of voluntaryity for the purpose of detaxing employee benefits (arts.51, paragraph 2, letter f). If, previously, the Irpef exemption for all those services offered to employees such as nurseries and meal vouchers was provided only on the basis of a voluntary act of the employer, now the same exemption is applicable for services provided by company contracts and regulations;
  • the extension of the benefits enjoyed by both employees and family members referred to in Article 12 of the Tuir (letter f-bis) to educational and educational services also in preschool age (including canteen services related to them), summer or winter centres (climate colonies) and playrooms (for educational purposes);
  • the introduction (letter f-ter) of the Irpef exemption also for services and welfare services for elderly or non-self-sufficient family members.

These important measures show how, through financial manoeuvre, the direction of supporting and promoting corporate welfare is being carried out even in small and medium-sized enterprises, by cutting services and, in fact, meeting both the need to save on the cost of labour of companies, and to the needs of employees and new challenges, such as that of the seniority of parents or relatives. , which they will face. In any case, it will be the workers themselves who will opt, under the corporate agreements, for welfare services or for a remuneration award linked to an increase in productivity, quality, efficiency, innovation.

In this regard, the Stability Law 2016 also introduces some news on the subject of premiums that, in the first place, will not be counted for income formation for the purposes of the calculation of the ISEE.

In particular:

  • Restoration of the 10% concessional tax for Irpef productivity premiums of up to 2,000 euros gross (2,500 in the case of companies that involve workers equally).
  • Raising income limits to qualify for such premiums of up to 50,000 euros per year (including managers and employees in this way).