Guide to employment, payroll and benefits in

Italy

Rivermate offers complete payroll, benefits and compliance services for

Italy

01. Overview

Last updated: 

August 19, 2021

Currency
Euro
Capital
Roma
Ease of doing business
72.9
Language
Italian
Population
60461826
GDP growth
1.50%

02. Grow your team in

Italy

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

Italy

, particularly if you don't have established local relationships. You can hire employees in

Italy

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

Italy, officially the Italian Republic, is a nation made up of a continental portion bordered by the Alps, a peninsula, and numerous islands. Italy is a country in Southern Europe that is also a part of Western Europe. The country has a land boundary with France, Switzerland, Austria, Slovenia, and the enclaved microstates of Vatican City and San Marino. It is a unitary parliamentary republic with Rome as its capital. It occupies a total area of 301,340 km2 and shares land boundaries with France, Switzerland, Austria, Slovenia, and the enclaved microstates of Vatican City and San Marino. In Switzerland, Italy has a federal enclave and a coastal exclave in Tunisian waters. Italy is the third-most populous member state of the European Union, with a population of about 60 million people. Italy has traditionally been home to a diverse range of peoples and cultures due to its central geographic position in Southern Europe and the Mediterranean. In addition to the numerous ancient peoples scattered throughout what is now modern-day Italy, the most prominent being the Indo-European Italic peoples who gave the peninsula its name, starting in the classical period, Phoenicians and Carthaginians established colonies mostly in insular Italy, Greeks settled in the so-called Magna Graecia of Southern Italy, and Etruscans and Celts settled in the so-called Magna Graecia of Southern Italy, while Et In the eighth century BC, an Italic tribe known as the Latins founded the Roman Kingdom, which gradually evolved into a republic with a Senate and People's government. The Roman Republic annexed and assimilated its Italian peninsula neighbors at first, gradually spreading and occupying parts of Europe, North Africa, and Asia. By the first century BC, the Roman Empire had established itself as the dominant force in the Mediterranean Basin and had established itself as a major cultural, political, and religious center, ushering in the Pax Romana, a period of over 200 years during which Italy's law, technology, economy, art, and literature developed. Italy remained the Romans' homeland and the empire's metropole, with its legacy visible in the global distribution of history, states, Christianity, and the Latin alphabet. Despite the collapse of the Western Roman Empire and barbarian invasions during the Early Middle Ages, numerous rival city-states and maritime republics, primarily in Italy's northern and central regions, rose to great prosperity through trade, commerce, and banking, laying the foundation for modern capitalism. These frequently autonomous statelets acted as Europe's main trading centers with Asia and the Near East, often enjoying a higher level of democracy than the larger feudal monarchies that were consolidating in Europe; nevertheless, part of central Italy was under the rule of the theocratic Papal States, while southern Italy remained largely feudal until the 19th century, partly as a result of the occlusion of the Holy Roman Empire.

04. Public holidays

05. Types of leave

Paid time off

Employees will roll over accrued paid leave days through the next year, but they must be used by June 31st. Any PTO that is left over will be cashed out.Employers have control over whether employees take leave. In addition, the arrangement should specify whether or not holidays should be carried over. The employee should take the following leave:In the case of a worker order, you must be available for at least two weeks. or in the 18 months after the vesting year's end, the final two weeks. From the moment of hire, the leave matures during the working partnership.PermessiEx-Festività (suppressed holidays) are granted to all employees regardless of seniority or the National Labour Agreement, and they are granted as a result of the abolition of four bank holidays. Employees are offered 32 hours of paid time to compensate for the days they may have been on vacation.Employees who are in their third year of employment are eligible for Permessi ROL (reduction of working hours), which are 28 hours a year. They begin accruing 56 hours a year after their fifth year of work.

Public holidays

There are 11 national holidays and one regional holiday in Italy.If a national holiday occurs on a Sunday, it is either rescheduled for the next day or paid in return.

Sick days

The employee is entitled to a 100% salary for the first three days, which is paid by the boss. This is true for the first two diseases of the year; the third disease is covered at 66 percent, while the fourth illness is covered at 50 percent. The person is not covered for the first three days of sickness after that.Between the fourth to the twenty-first day of the injury, the employee is entitled to 75 percent of his or her wages, with the government covering half and the company covering the other half.From the 21st day forward, the employee is entitled to 100 percent, with the government covering 66 percent and the company covering the remaining.

Maternity leave

Maternity leave is granted to mothers for a period of five months. Before giving birth, two months must be taken. The employee will be compensated in full. Employers make the charge and will later request an INPS refund of up to 80%.

Paternity leave

For the first five months after a child's birth, fathers are entitled to ten days of paid leave and are paid 100% of their wages. As an alternative to the mother, an additional day of leave is available.New fathers to give their boss 15 days' notice before going on leave.The parent is entitled to three months of paternity leave following the birth of the infant if the mother does not take maternity leave (due to divorce, infirmity, or the father getting sole custody). If the mother is self-employed, certain laws apply as well.

Parental leave

Employees in Italy will take up to ten months of unpaid parental leave:For a mother returning to work following maternity leave:It is possible to take up to 6 months of unpaid leave.A single mother or father: May take up to ten months off without payIf a woman decides not to take paternity leave following maternity leave, she is entitled to work 6 hours per day before the infant reaches the age of 12 months.

Other leave

Paid permits, also known as "Permessi Retribuiti," are a special kind of paid leave that can only be used for particular purposes specified in each CCNL, the most important of which are:A family member's death or serious illnessHarassment by a friend of the familyReasons related to family32 hours a year during the first two years of work (only "festivita' soppresse")68 hours a year in the third and fourth years of work (36 hours for licenses + 32 for "festivita' soppresse")

06. Employment termination

Termination process

Employee firing is now prohibited under COVID-19 until June 30, 2021.


In Italy, the employee must be notified in writing. If a labor court rules that the termination was unjust, the company must either restore the employee or compensate the employee.


Employers are required to offer notice of termination for all forms of terminations, unless the termination is for grave disciplinary reasons. Notice periods may be specified in the collective bargaining agreement, or a payment in lieu of notice may be made. A contract of employment may be terminated in one of the following ways: resignation, employer dismissal (including for "good cause"), expiration of a defined period, mutual consent, or retirement.

Notice period

If the employer initiates the termination, employees shall be given 30 days' notice, and managers will be given 60 days' notice. Employees shall receive 30 days' notice and managers will receive 45 days' notice if the termination is instigated by the employee.

Severance pay

Employers in Italy are required to set aside funds for severance (TFR) for their employees, which must be paid out within six months of the employee's departure. The TFR is calculated by dividing the gross annual salary from January 1st to December 31st by 13.5 and subtracting taxable income (pension, social security) before multiplying by 50 percent. The final TFR amount is increased by an additional percentage determined by the National Statistical Institute.

Probation period

Probationary periods may last up to six months for managers and up to two months for employees below the managerial level.

07. Working hours

General

The standard workweek is 40 hours spread across five days, and employees are not permitted to work more than 48 hours spread across seven days, including overtime, on an average basis over four months. Collective bargaining agreements may slightly alter these rules. Although there is no legal limit to the number of hours an employee can work in a single day, there is a practical one, as employees must take 11 consecutive hours of rest every 24 hours. Workers under the age of sixteen may not work more than seven hours per day, and workers between the ages of sixteen and eighteen may not work more than eight hours per day.

Overtime

The amount of overtime an employee is permitted to work is generally determined by contract or collective bargaining agreement, but overtime cannot exceed 250 hours per year. Collective bargaining agreements establish pay rates for overtime and work on holidays. Night work (work performed between the hours of 12 a.m. and 5 a.m.) is limited to eight hours in a 24-hour period and is typically limited to 80 nights per year. Collective bargaining agreements may modify some of these terms.

08. Minimum wage

General

In Italy, there is no minimum wage at the national or regional level, but a CBA (contract between an employer and employee) can force one. Employees are entitled to a salary that enables them to live comfortably. Even if your company does not comply with the minimum wage law, courts will look to a negotiated minimum wage as being a contractually agreed-upon rule.


While 13th-month and annual bonuses are not required by Italy's compensation laws, these bonuses are prevalent in the majority of CBAs. Many employers will offer employees a bonus before Christmas, and according to CBA regulations, companies that are subject to the law are required to pay employees 14th month salary during the summer months.

09. Employee benefits

General

The National Health Service (SSN) manages national health insurance in Italy, and it is funded through direct taxation as well as indirect taxation by employers and employees. When you register with the Local Health Service, you will be given a social security number and a health card. The employee's health card entitles him or her to low-cost or no-cost treatment.

There is also the option of purchasing private health insurance. Individuals with private insurance can freely choose their own doctor and specialist, be treated at private hospitals, and so on. Many residents have private health insurance policies that cover the portion of medical bills not covered by social security.

Some employers offer allowances for company cars, cell phones, and meal vouchers. Training is frequently provided by high-tech companies.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

Italy

to hire a team takes time, money, and effort. The labor law in

Italy

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

Italy

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

Italy

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

Italy

via our Employer of Record / PEO solution.

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