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NEW PART TIME CONTRACT FOR EMPLOYEES CLOSE TO RETIREMENT.

L’avv. Sofia Bargellini parla del nuovo part time agevolato per i lavoratori vicini alla pensione. The Italian Parliament, starting from 2nd June 2016, introduced a new type of part-time  contract, called “incentivised” part-time contract, specifically addressed to employees close to retirement age. This is a particular contract, subject to approval by the Local Labour Office, which […]

L’avv. Sofia Bargellini parla del nuovo part time agevolato per i lavoratori vicini alla pensione.
The Italian Parliament, starting from 2nd June 2016, introduced a new type of part-time  contract, called “incentivised” part-time contract, specifically addressed to employees close to retirement age. This is a particular contract, subject to approval by the Local Labour Office, which grants employees with a number of specific and attractive advantages from a social security contribution point of view.
In particular, employees who will reach retirement age by 31 December 2018 will have the possibility to enter into an “incentivised” part-time contract, agreeing with their employers on reduction in working time varying from 40 to 60 %.
This agreement will grant the employee the following advantages: He or she will receive along with his or her monthly salary – duly reduced in consideration of the reduction in working hours – a further sum equal to the missing social security contributions that the employer would have paid on the normal full-time salary. This means
that if the employee was paid € 2.000 gross per month and he or she agrees to a 60% reduction in his working hours, the employee shall receive a monthly salary of € 800, plus a further sum equal to the contribution that the employer would have paid on the € 1.200 the employee loses as a consequence of the working time reduction.
The employee shall accrue notional social security contributions calculated on the previous full salary. Referring to the example above, even after the 60% reduction in working hours, the employee continues to accrue the social security contributions (valid for pension purposes) on € 2.000 per month.
Therefore, the employee close to retirement can enjoy shorter working hours and more free time in the last years of work, while in the meantime he or she does not suffer any reduction in pension, as social security contributions are accrued on the normal full-time time salary.
Even though the monthly salary is effectively reduced compared to the full-time salary, it is pro-rata higher than before, considering that the employer pays to the employee a sum equal to the contributions that would have paid on the missing part of the salary.
This new type of contract is favourable for the employer: in the last years of work, when the employee may be less productive, the employer can find an agreement to reduce its working hours and consequently cut costs. In the meantime, the employer can hire a new part-time or full-time employee to replace the one retiring. Also from a management point of view, this instrument allows the employer to organise in good time the training of the
new resource and the handover from the experienced person to the new recruit.