Labor Decree no. 48/2023: Major changes to the law

Thanks to Ugo Pesce for collaborating on this article

Legislative Decree No. 48/2023, commonly known as the Labor Decree, took effect on May 5, 2023, and introduced significant changes to the current employment framework.

The following is a summary of the decree’s most critical new features.

1. Fixed-term employment contracts

In order to allow more flexible use of this tool, the Labor Decree provides new scenarios that can be used to justify extending the duration of such employment contracts beyond 12 months (though the maximum limit of 24 months remains in place)

  1. in the cases provided in the collective agreements cited in Article 51 of Legislative Decree No. 81/2015;
  2. in the absence of the provisions cited in the point above, in the collective agreements applied at the company and, in any case, by April 30, 2024, for needs “of a technical, organizational or productive nature” identified by the parties;
  3. for replacement of other employees.

2. Duty of information

Under the Labor Decree, some of the information that the Transparency Decree established had to be given in full may instead be communicated to an employee with an indication of the relevant basis in law or national- or company-level collective agreement.[1]

This includes information about:

  1. the duration of the probationary period;
  2. the right to receive training provided by the employer;
  3. the duration of holidays and other paid leave;
  4. procedure, form, and terms of notice in the event of termination by either party;
  5. the initial amount of remuneration, broken down into its components and including the pay period and payment method;
  6. the scheduling of normal working hours and conditions for changing the schedule, overtime conditions, including overtime pay, and conditions for shift changes;
  7. the bodies and institutions receiving social security and insurance contributions from the employer and any form of social security protection provided by the employer.

Employers shall also provide or make available to employees, potentially online, the collective agreements and company policies (if any) that apply to the relationship.

Another important clarification concerns the use of automated decision-making or monitoring systems. Employees must be informed of the aspects of the employment relationship affected by these systems, as well as the systems’ aims, operating methods, and IT security levels, only if the systems in question are “entirely” automated, thus reducing the scope of application of the law.[2]

3. Reduction of tax wedge and fringe benefits

The Labor Decree raises to 4% the partial exemption of the employee’s share of social security contributions for disability, old age, and survivors for pay periods from July to December 2023 (excluding the 13th-month bonus).
The exemption increases to 7% if the taxable wage does not exceed a monthly amount of EUR 1,923.
Furthermore, the Labor Decree confirms that the ceiling for fringe benefits increases to EUR 3,000 for 2023; this applies only to employees with dependent children and includes payments of and reimbursements for water, electricity, and natural gas utility bills.

Lastly, the Labor Decree introduces additional provisions concerning i) “Citizenship Income” (“Reddito di cittadinanza”) ending and the start of the “Inclusion Allowance” (“Assegno di inclusione”); ii) new employment incentives for young people and employees with disabilities; iii) the Extraordinary Furlough Scheme (“Cassa Integrazione Guadagni in Deroga”) in exceptional company crisis and reorganization cases; iv) amendments to certain provisions of Legislative Decree 81/2008 on workplace health and safety.


[1] For more information, please see our previous article on the Transparency Decree (Legislative Decree 104 of 2022), published in the Employment & Equality newsletter.

[2] For more information, please see our previous article on automated systems, published in the Employment & Equality newsletter.

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