The Italian youth labour market continues to occupy a central place on the legislative agenda. Through Decree-Law No. 62/2026, converted into Law No. 112/2026, the legislature has introduced a concrete incentive to encourage businesses to offer greater employment stability to workers under 35: a total contributory exemption, equal to 100%, for employers who convert a fixed-term contract into an open-ended employment relationship. The INPS has already issued its first operational guidance through Circular No. 72 of 3 July 2026, effectively paving the way for the first subsidised stabilisations starting from 1 August 2026.
The following sets out a detailed analysis of the measure, its beneficiaries, and the conditions that must be met in order not to forfeit entitlement to the relief.
Who this measure is aimed at
The benefit is available to all private-sector employers, regardless of company size or sector of activity. Agricultural enterprises may also access it. The following are excluded:
- Public Administrations;
- domestic employers;
- apprenticeship relationships.
This is therefore an instrument designed primarily for the private productive sector, which frequently struggles to justify economically the transition from fixed-term contracts to permanent employment relationships, particularly in contexts of cyclical uncertainty.
Which workers are eligible
Not all young employees fall within the scope of the relief. In order to access the exemption, the worker must simultaneously satisfy three conditions:
- be under 35 years of age at the date of conversion (i.e. no more than 34 years and 364 days old);
- never have held, throughout their entire working life, an open-ended subordinate employment relationship;
- belong to the categories of blue-collar worker (operaio), white-collar employee (impiegato) or middle manager (quadro) — executives (dirigenti) are excluded.
The INPS has clarified certain borderline cases of practical relevance. A previous apprenticeship contract does not preclude access to the incentive, nor does a domestic employment contract of indefinite duration. Conversely, a single prior open-ended employment relationship — even one that ended during the probationary period or through voluntary resignation — is sufficient to permanently extinguish entitlement to the incentive. This is a factor not to be underestimated during the selection process and when verifying the candidate's contractual history.
Which contracts may be converted
The relief does not apply to direct new hires on permanent contracts, but exclusively to the conversion of specific fixed-term contracts already in force. In particular, the original contract must be —