Examination of the relationship between contractual and corporate welfare (where works and services are not subject to contributions and taxation) and the social security contribution obligation compliance document (DURC) which is indispensable for accessing the regulatory and contributory benefits provided for by the labour and social legislation
Contractual welfare is the worker protection and welfare system, supplementary to that provided by the state, which originates from collective bargaining at different levels: national, local, or corporate.
Traditionally, contractual welfare was distinguished from employer or corporate welfare, considered as a set of services and benefits provided to workers on the employer’s unilateral and voluntary initiative, without any negotiation or agreement with workers’ trade union.
Law no. 208 of 28 December 2015, (Stability Law for 2016) overcame the identification of corporate welfare with the features of unilaterality and voluntariness, technically and culturally modifying the previous approach. The previous regulations excluded from employee income welfare works and services only if they were provided on the employer’s voluntary and unilateral initiative.
It was decided that the “use of works and services recognised by the employer voluntarily or under contractual provisions or company regulations does not contribute to the formation of employment income.”
If in the previous wording of Art. 51 of the TUIR (Consolidated Income Tax Law) (Presidential Decree no. 917/1986) the provision application was limited to disbursements made “voluntarily” by the employer (therefore tax authorities and tax case law excluded collective bargaining disbursements), the 2016 Stability Law overturned this previous approach, introducing company bargaining as the privileged tool used to implement welfare policies.
However, there is no legal definition of contractual or corporate welfare, and the doctrine describes it as the set of benefits and services provided by the company to its employees to improve their private and working life. These include family support, study, parenting, health protection, time-related and commercial benefits.
Contribution exemption and tax provisions
Law no. 208 of 28 December 2015 (Stability Law for 2016) introduced important changes on the detaxation of bonuses for objectives deriving from local or corporate collective agreements, and on goods and services (benefits) provided by employers to employees, i.e., disbursements comprising contractual and corporate welfare, which is exempt from contributions and taxes.
Art. 51, paragraph 2, letter f), of the TUIR establishes that the following do not contribute to forming employment income: “the use of works and services recognised by the employer voluntarily or under contractual provisions or company agreements or regulations, offered to employees or categories of employees and family members specified in Article 12, for the purposes referred to in paragraph 1, of Article 100.”
Art. 1, paragraph 162, of Law no. 232/2016, specified that the provisions of Article 51, paragraph 2, letter f) of the TUIR must be interpreted in the sense that they apply to works and services recognised by the employer, in the private or public sector, under a national collective labour agreement, multi-industry or local collective agreements.
Social security contribution obligation compliance document (DURC)
The Social security contribution obligation compliance document (DURC) certifies compliance with company payments of social security, welfare contributions, and insurance premiums.
Based on a single electronic request, the authorised party can simultaneously verify the compliance of an economic operator with contribution obligations to INPS, INAIL, and the Construction Industry Fund (only for companies belonging to the construction sector or applying the relevant National Collective Labour Agreement).
Originally created as a unified certification for contribution and insurance payment compliance by construction companies contracted for public works, the DURC’s scope of application was gradually broadened, until reaching the current situation where the DURC is compulsory regardless of contribution classification.
There are two separate documents for company contribution payment compliance: the “Online DURC”, used by external parties to verify the economic operator’s contribution compliance (Ministerial Decree 30 January 2015; INPS Circular no. 126/2015; INPS messages no. 4580/2015), and the “Internal DURC”, which is indispensable to access the regulatory and contributory benefits under labour and social legislation.
Contribution benefits
Under Art. 1, paragraph 1175, Law no. 296/2006, access to the regulatory and contributory benefits under labour and social legislation is subject to the possession of the DURC by employers.
Art. 1, paragraph 1175, Law no. 296/2006 states that from 1 July 2007, the regulatory and contributory benefits under labour and social legislation are subject to the possession of the DURC by employers, “ without prejudice to other legal obligations and compliance with national, regional, local or company collective agreements, stipulated by the employers’ and employees’ trade unions that are comparatively more representative at a national level.”
Continue reading the full version published in Modulo24 Contenzioso Lavoro (Form24 Labour Litigation of Il Sole 24 ore.
