Italy fosters new and more stable employment for young people and women: the two groups that are suffering the most as a result of the on-going economic crisis.

Apprenticeship now seem to take on a prominent position under the recent Italian Labour Reform, as they in fact were marked as «the principal mode of accessing the labour market» for young people.

In fact, through this kind of contract companies provide young employee with professional training in order to achieve further levels of qualification; on the other hand they are allowed to pay lower salaries and social security.

From 1st January 2013, some major provisions were changed in an attempt of «soften» the restrictions on the use of apprenticeship contracts.

First of all, the reform increased the ratio of apprentices that is permitted for every trained employee in companies that employ more than 10 people. Now, there can be 3 apprentices for every 2 employees (the previous limit (1 to 1) still applies for companies whose workforce does not exceed 10 people).

Concerning the sanctions in case of failure to provide training, the Reform introduced a gradual principle. Before the Reform, failure to provide training would result in the apprenticeship contract being automatically converted into a contract of employment.

Now no such sanctions apply for failure to comply during the first year of apprenticeship with the training project that was stipulated in the apprenticeship contract.

Moreover, through Legislative Decree of 5th October 2012, the Ministry of Labour provides Italian companies, at least up until the end of March 2013, with strong and exceptional incentives to employ young people (under 29 years old) and women.

Companies are entitled to these incentives when they convert existing contracts (or contracts that terminated within the last six months) into open-ended employment contracts. The conversion of fixed-term contracts, project contracts or consultancy contracts with self-employed workers can give rise to such incentives.

Specifically in such cases, the «INPS» public fund compensates the employer with €12,000 for every conversion, and on an Italy-wide basis up to € 196 million is available for 2012 and € 36 million for 2013.

Finally, companies are entitled to benefit from an incentive, although for a smaller amount, for fixed-term hires that increase the size of their workforce (so, not for replacement reasons). The amount of the incentives is set according to the length of the new employment: € 3,000 for 12 month contracts, € 4,000 for 18 month contracts and € 6,000 for 24 month contracts.

For further information on this topic please contact Valeria Morosini at Toffoletto De Luca Tamajo by telephone (+39 02 72 1441), fax (+39 02 72 144 500) or email (svm@toffolettodeluca.it)