- Overview: Italy
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Italy
If you hire international workforce, or plan to hire, then Hiring and Firing Workforce in Italy Guide below will help you understand the nuances of labor legislation in the country.
Companies hire international workforce for various reasons but in most cases they are:
- entering the foreign markets to sell company products. To do so, the company hires sales representatives who would represent their product and sell it to their local client base.
- hiring a global talent with unique skills that is unavailable in the local market or costs the company less than the talent with similar skills hired in the home country.
Before entering a certain foreign market or engaging a global talent, it is crucial for the company to understand how it can make local hires and reward its workers on a monthly basis. Growing companies often face a challenge of paying benefits and bonuses to the commission-based independent sales representatives they are working with.
If you intend to hire and pay your foreign workforce in full compliance with labor laws and regulations of Italy, then the Global Employer of Record service from Acumen International may be the best way for you to go. We are an International PEO company and we specialize in global employment, meaning we can employ your employees in Italy and act as their legal employer on your behalf. We will payroll your foreign workforce monthly and provide benefits to them through our global network so you don’t have to set up your own legal entities there.
We are experts in global workforce employment in , and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Italy.
See the guide below for a general overview of labor rules and regulations in Italy or contact us if you need to employ workers in Italy or would like to get more details.
Hiring and Firing Workforce in Italy Guide
The question shouldn’t be on why it CAN’T be less complicated to expand internationally or why you CAN’T extend your business operations to such an attractive market as Italy. But rather it should be why you WON’T break out of the limitations and just move. This is because Acumen International, the express global employer of record provider has gone all out to help you break forth any seeming barriers and help you achieve your goal of being a global player with limited stress. In the interim, here is a simple but comprehensive information on the things you must know about Italian labor market if you must do business there.
# Employment contracts
Employment code in Italy is very strict with the issues that relate to employment contract. The decision on whether to conclude a contract verbally or in writing is for the parties of employment to make. Nonetheless, the employer is under obligation to provide the employee with a letter of employment (different from the contract) before he/she commences his/her work. This statement of employment must include information about description of the employee’s roles and responsibilities, working hours, and salary that exceed the base salary established by the relevant National Collective Labor Agreements. This set of rules only applies if the employee is on a fixed-term contract. For part-time workers, the letter of employment should include (in addition to other things), the exact times in which the employee is expected to work.
An employer is forbidden by law to recruit more than 20% of his/her total workers on a fixed-term basis. The duration of a fixed-term contract cannot be more than 36 months, but can be extended up to 5 times, after the contract has ended. It is important to note that irrespective of whether it is a part-time or full-time contract, an employee cannot legally hire someone unless he/she is first registered with the applicable labor authorities.
# Statutory employment rights
# Working hours
On the average, people work about 8 hours a day. Most offices usually open from 8:00 am through 7:00 pm, Mondays to Fridays with 2 hours’ break (often between 1:00 and 3:00). Statutorily, the working hours per week for both day workers and night workers should not exceed 40 hours. Employees are entitled to 11 hours of rest within every 24 hours and 24 hours of time-off within every 168 hours (7 days).
# Probation period
The civil code that related to employment contract requires that the duration of an employee’s trial period be included in the contract. The absence of the duration of a probationary period will automatically mean that the employee can start his/her employment duties without probation. The duration of a probationary period can be fixed for 3 months or 6 months for employees of managerial functions and employees of other categories respectively.
Under normal circumstance, employees are not supposed to work more than 8 hours’ overtime per week. In other words, the total working time, including the overtime should not exceed 48 hours a week, and 250 hours a year. Overtime must be compensated with increased salary, although a CBA can state that the worker must be allowed to take an equivalent period of compensatory rest. The employer is obliged to report to the relevant authorities should more than 10 workers in his/her company exceed the limit of 48 a week. In any case, breaking the 48 working hours rule usually attracts a fine from the end of the employer.
Some employees are exempt from statutory hour restrictions, including high-level white-collar employees and executives and overtimes are not calculated for them.
# Annual leave
All employees are eligible for a minimum of 4 weeks of vacation per annum. This duration can be increased by any number of days or weeks up to by a collective bargaining agreement. During these periods of vacation, the employee has the right to his/her full payment. An employee can decide to take the annual leave in sections (at least 2 weeks in a year) instead of taking the entire weeks at once. However, in this case, the remaining weeks must be taken within the first 18 months of the subsequent years. Annual leave cannot be exchanged for money except on the account of the contract termination.
# Parental leave
From the period of pregnancy up to the end of the leave period, the employee is protected by law from engaging in any activities that will endanger her life or that of her baby’s. Pregnant employees have the right to 5 months’ maternity leave. Because of the flexible nature of the maternity leave, the employee has the right to choose when to start of her leave: either from the seventh month of pregnancy and extends it to the three months after her child is delivered or from the eight month through the fourth month after childbirth. Alongside the time off is a guaranteed allowance of 80% of the employee’s salary. This payment is usually made by the National Social Security Body, and is paid throughout the maternity leave period. Some collective bargaining agreements provide that the employer pays the remaining 20%. It is important to note that a pregnant employee has the right to ask for maternity leave earlier than one or two months before childbirth if it is really needed.
Both parents are entitled to additional parental leave during the first 12 years of their child’s life.
The above benefits can apply to the male employee if for the reason of being custodians of the child/children, illness, or death, the female employee cannot take advantage of the maternity leave entitlements. In the case of child adoption, the employee is eligible for 3 months’ time off within the first 3 months of adoption and subsequently, parental leave with all its benefits within the first 3 years of the child’s adoption.
# Sick leave
Employers are under legal obligations to grant a sick employee a fully paid sick leave up to the number of days defined by the collective agreement. During the period of sick leave, an employer has no right to change or terminate the original contract he/she has with the employer. Changes and/or termination can only be effected after the employee has completed his/her leave.
During absence from work due to illness, the public authority for social security pays: 50% of the average daily wage from the fourth to the 20th day; and 66.66% of the average daily wage from the 21st to the 180th day.
Some collective bargaining agreements provide for an additional percentage payable by the employer.
There is really no law on what the minimum or maximum wage will be. National collective bargaining agreements provide for a minimum wage for each business sector depending on the employee’s grade and length of service. Generally, employees’ remuneration differs for employees in different industries. It is usually subject to the negotiation between the employers’ association and the labor union.
# Contract termination
Employment cannot be unilaterally terminated if the employee is pregnant or on maternity/paternity leave, at least till the child is a year old. Also, an employer cannot terminate the contract of an employee who is on sick leave. Employment can be terminated with or without prior notice. It all depends on the reason for the termination. An employer can dismiss any employee with a record of grievous misconduct without having to notify him/her first. Other justifiable reasons -subjective or objective – require that the employer or the employee should give the other party early notice before the due date of termination. How early or how long the notice should be will depend on the CBA. In some cases, an employer might choose to pay the employee in question certain amount of money, rather than giving him/her some days’ or weeks’ notice.
No matter what the case may be, employers are obligated to give the dismissed employee a pay. Additionally, employees whose contract has been terminated has the right to be paid for the any vacation he/she did not use before the termination, as well as a severance pay, which is calculated by adding together, for each year of service by the employee, a quota equal to the annual salary divided by 13.5. and separate payment – “pro rata supplementary monthly payment”- if he/she has contributed so much to the company.