Effortless Hiring in Italy

Employment Laws

• Italy's labor laws are comprehensive, offering substantial protection to employees. Key legislation includes:
• Workers' Statute (Statuto dei Lavoratori): Governs individual and collective labor relations.
• Legislative Decree No. 81/2015: Regulates various aspects of employment, including temporary work and health and safety.
• Minimum Wage Regulations: Minimum wages are typically determined by National Collective Agreements (NCAs) rather than a statutory national minimum wage.

Onboarding Process

Employers are required to provide a written employment contract outlining essential terms such as:

• Job description.
• Remuneration.
• Working hours.
• Notice periods.

While verbal agreements are legally binding, written contracts are strongly recommended to prevent disputes.

Types of Employment Contracts

1. Indefinite Contracts: Employment without a predetermined end date.
2. Fixed-Term Contracts: Employment for a specified period or project.
3. Part-Time Contracts: Employment with reduced working hours compared to full-time positions.
4. Temporary Contracts: Short-term employment, often through agencies.

Payroll Frequency

• Employees are typically paid monthly, with payments usually made at the end of each month.

Minimum Wage

• Italy does not have a statutory national minimum wage; instead, minimum wages are typically determined by the National Collective Agreements (NCAs) for different contract levels.

Payroll Deductions

• Income Tax: Progressive tax rates ranging from 23% to 43%, depending on income levels.
• Social Security Contributions: Both employers and employees contribute to social security, covering benefits like healthcare, pensions, and unemployment insurance.

Employee Income Tax

Italy employs a progressive income tax system with rates ranging from 23% to 43%, based on income brackets.

Employer Contributions

• Employers contribute approximately 38% of the employee's gross salary to the social security system.

Types of Leave in Italy

1. Annual Leave

• Employees are entitled to a minimum of four weeks (20 working days) of paid annual leave. According to Legislative Decree No. 66/2003, at least two of these weeks must be taken in the year they are accrued. Unused leave must be compensated upon termination.

2. Parental Leave

• Maternity Leave: Female employees are entitled to five months of paid leave, generally taken two months before the due date until three months after childbirth. The employee receives 80% of her regular salary during maternity leave, which the employer pays and is reimbursed by the INPS (National Institute for Social Security).
• Paternity Leave: Fathers are entitled to 10 days of compulsory paternity leave, which can be taken at the time of the child’s birth.

3. Sick Leave

• Employees are entitled to paid sick leave, with compensation rates dependent on their length of service. Employers cover the initial period, after which INPS provides payments.

4. Public Holidays Italy observes several public holidays that vary by region. Common holidays include New Year's Day, Liberation Day, and Christmas Day.

Mandatory Benefits

1. Social Security: Coverage includes healthcare, pensions, unemployment benefits, and parental leave funded through employer and employee contributions.
2. Additional Payments: Employees are entitled to a 13th-month salary ("tredicesima"), typically paid in December. Some NCAs may include a 14th-month installment given in June.

Supplemental Benefits

Employers may offer additional benefits such as private health insurance, meal vouchers, transportation allowances, and flexible working hours to attract and retain talent.

Process

• Termination must adhere to the Workers' Statute, which requires valid reasons for dismissal such as economic, organizational, or disciplinary grounds. Employers must follow fair procedures that include providing written notice and consulting with employee representatives if applicable.

Notice Period

• During the probationary period: Immediate termination without notice is possible.
• After the probationary period: Notice periods vary based on the employee's length of service and applicable NCAs.

Severance Pay

• Employees are entitled to severance pay known as Trattamento di Fine Rapporto (TFR), which accrues annually and is payable upon termination. The TFR is calculated based on the employee's salary over their period of employment.