Italian Employees and Employers Face Coronavirus

By Katie Nadworny April 23, 2020
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the Pantheon in Rome

​Alice Delcourt closed her Milan restaurant, Erba Brusca, days before the Italian government officially mandated it. Business had already slowed with the fear of coronavirus, and the news made the outbreak sound like it was really serious. With Italy already affected, shutting the restaurant seemed like the most socially responsible thing to do. Within the week, her instinct was proven correct—all restaurants in Milan were ordered shut on March 11. The government predicted they could reopen in early April.

Over a month into Italy's lockdown, with the country still reckoning with the highest number of coronavirus cases in Europe, it's clear that restaurants like Delcourt's and other businesses will not be reopening in a normal way anytime soon. As the pandemic drags on and the social and economic toll continues to rise, businesses have had to adapt to the new reality, and the government has had to find ways to support employees and employers.

According to some estimates, unemployment in Italy could reach 11.2 percent in 2020, with the GDP decreasing by 6 percent. Certain sectors, such as tourism, have been particularly hard-hit. 

Some Quickly Adapt, Others Face Difficulties

Some companies have been able to adapt. Giampiero Morales is a CPA with BC& in Milan, and normally, meeting with clients in person makes up a huge part of his work. However, his company quickly reorganized its routines to go online. 

"In one or two days, my firm was able to set up everyone. We are almost 35-40 people; IT set up everyone to work from home," Morales said. "We are able to have meetings with clients and also between us on a daily basis, or every two days."

For restaurants like Delcourt's, the situation is more complicated. Even before the official closure, restaurants and similar businesses were struggling.

"People forget that, yes, they finally closed all businesses on the 11th of March, but business had been going really badly for the last month anyway because of the coronavirus," Delcourt said. "So you already weren't making the kind of money that you would usually be making. You already were in economic difficulty."


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State Assistance

The Italian government has taken steps to help alleviate the stress on employees and employers. There has been more than 750 billion euros—approximately $815.1 billion—in government aid offered as of mid-April. The government released a decree that forbids companies from firing any employees, unless there are "justified objective reasons." This means, as Delcourt pointed out, "massive layoffs that you're seeing in America just don't exist here."

For employers that would struggle to pay employees in this situation, there is a state program called Cassa Integrazione. Administered by the National Institute of Social Insurance, Cassa Integrazione pays up to 80 percent of employees' wages for companies that apply and are accepted into the relief scheme.

"It was created for large corporations or businesses that were in economic difficulty," Delcourt said. "What they've done is they've opened that program up to small businesses as well. So we've applied for it for our employees."

Some of Morales' clients have also signed on to Cassa Integrazione.

When companies are in the Cassa Integrazione program, the employees whose salaries are partially covered by the state are not allowed to continue to work. This is not a problem for companies whose entire operations have halted but can be complicated for some businesses, including Delcourt's restaurant.

Delcourt decided to do delivery for Easter Sunday, and lunch sold out right away, she said. "But it's a little bit limiting too. I'm the only person who's really working, because when you put your staff in Cassa Integrazione, they can't work. You have to take them out of Cassa Integrazione, and then you will have to pay them a salary." 

For companies that don't need to join Cassa Integrazione, there are still issues of payment. If clients can't pay Morales' firm the fees they are owed, for example, the company might struggle to cover their costs. "We're still going to have business to do, but the problem is going to be the money," Morales said. "Are we going to get paid, and how? And when?"

Heavy Restrictions After Businesses Reopen?

How Italy will look for employers and employees after the pandemic passes remains to be seen. Delcourt anticipates that the restaurant world will be different for a long time and is focusing on new ways to keep her business viable. 

"I do think that if we do reopen, it's going to be with really heavy restrictions," she said. "I can't justify the staff I have right now, and that's hard because I don't want to have to fire anybody."

Ultimately, though, it's impossible to know how individuals and businesses in Italy will fare.

"We're navigating this void right now," Delcourt said. "We can think whatever we want, but we really don't know."

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