A successful business largely depends on its employees. By creating working contracts that include the right terms and benefits there will be no misconception and the perfect work-life balance can be created. At Bradford Jacobs, this is our aim, and we support companies in over 100 countries with creating compliant and balanced labor contracts.
Our team keeps track of the Italian laws and regulations on a daily basis to be duly aware of updates that can be implemented in working contracts. By using our PEO and EOR services, we can provide compliant labor contracts for employees in Italy, including local benefits.
To support your plans, we made this guide including the basics of employment contracts in Italy. After reading this guide you will know everything about social security, notice periods, and the average working hours.
How do you hire Italian Employees?
If a foreign company is looking to hire resident employees as part of their expansion into Italy, they must comply with the recruitment regulations concerning tax, social security contributions, employment law, as well as collaborate with or adhere to any collective bargaining, trade unions, or work council agreements.
National employment legislation, collective agreements, and works council agreements are the main sources of employment law in Italy, which govern employment conditions, benefits, and health and safety regulations. The conditions performed vary according to the industry and sector.
It is important for the employer to know the existing labor laws and employee entitlements, as well as collaborate with the appropriate local employment organizations.
Employment Contracts in Italy
In Italy, an employment contract is not required by law to be concluded in writing. Oral contracts are also practiced. However, for a contract to be valid, certain clauses must be in writing, and they must be presented to the employee within 30 days of starting employment. This document must include:
- Name and address of the employer and the employee
- The place of work
- The commencement date of employment
- Anticipated duration of employment, specifying whether it is indefinite or fixed term
- The probationary period
- The job title or category
- The employee’s salary
- The duration of annual leave
- The working hours
- The length of the notice period (in case of termination)
- A reference to any collective bargaining agreements, works or services agreements that are applicable to the employment relationship (if there are any)
There are a few types of contracts that can be applied in Italy:
- Indefinite employment contract – the standard type of employment contract in Italy, and as a general rule, employment contracts are entered into for an unlimited period. Termination of this contract requires a notice period and a set of dismissal policies.
- Fixed-term employment contract – This contract is set by the national collective agreements. Employment law in Italy states that the overall number of fixed-term contracts must exceed a threshold of 20% of the permanently hired workforce.
This contract type is limited to a maximum of 36 months and can be extended.
- Part-time employment contracts – This contract type must be in writing and specify the employees’ hours of work. The pay and other entitlements of part-time workers are also to be included and are pro-rated to those applicable to full-timers.
Two ancillary clauses may also be added to the contract, which can provide the employer a wider flexibility – “elastic clauses” which can permit an employer to increase working time; and “flexible clauses”, which can permit an employer to vary working hours during the day.
- On-call job contracts – this type of contract must be drafted in writing, and employees falling under national collective agreements are also eligible to receive an additional 20% of their wages.
Employees signed under this contract must declare their availability to work over a certain period of time, during which they can be called in with short-term notice. In some cases, conditions may provide that the employee is bound to work if called by the employer.
- Apprenticeship contracts – This contract type is open-ended and applies for vocational training positions. The employer can hire apprentices within certain thresholds (depending on the number of employees hired) and ensure that the apprentices acquire professional skills and qualifications.
- Temporary agency contracts – this contract type can be on a fixed-term or open-ended basis and can only be agreed on with qualified employment agencies. Workers under these contracts must benefit from the same legal and economic conditions available to employees of the user’s or end client’s company.
Employers cannot use this contract to replace employees on strike, laid-off or involved in collective dismissals.
Most changes to an employment contract must be made with the consent of both the employee and employer. If the employer wishes to amend the employment terms, they must discuss and agree to the changes with the employee before doing so.
Collective bargaining is an important part of recruitment in Italy. Collective bargaining mainly takes place at two levels – at industry level, and at company or district level. National-level agreements between unions and employers are also used to implement EU-level initiatives.
Collective agreements are used to agree on employment conditions such as wages, working hours, leave, work organization and information rights. An ETUI study on collective bargaining in 2019 estimated that these types of agreements cover about 80% of all employees in Italy (at industry level).
Industry agreements are valid for three years.
What Laws About Employment Exist in Italy?
The basic rights of employees in Italy are laid out in the Italian Constitution and the Civil Code. There is also no central employment law, but rather a variety of laws that address different aspects of the employment relationship, which include work unions and collective bargaining agreements.
In employment, certain forms of legislation must be followed, which include:
- National Minimum Wage: Italy does not have a government-regulated minimum wage and is one of the few European countries that do not have one. The minimum wage rate is then determined by collective bargaining agreements on a sector-by-sector basis, or individual contract negotiation.
- Working Hours & Overtime: The standard working time in Italy is 40 hours a week, and 8 hours a day. Any work done that is over 40 hours in a week is considered to be overtime in Italy. The lowest statutory tariffs one can receive from overtime is 10%, but this can be raised by collective agreements.
- Rest Days & Breaks: Employees are entitled to rest periods of at least 10 minutes after working for at least six consecutive hours. They are also entitled at least 11 hours of rest per day, and at least 24 hours every seven days – particularly Sunday.
- Health and Safety: In Italy, health and safety representatives are chosen directly by employees in smaller organizations, or by existing trade union structures in those with more than 15 employees. Collaboration with higher management or employers are restricted to yearly meetings with the health and safety staff once a year, or when there are major changes.
- Annual Leave: Employees in Italy are entitled to a minimum of 28 days, or four weeks of paid leave per year, Two of the four weeks can be taken in the year they were given, whilst the other half can be carried over to the next one for an additional 18 months.
- Sick Leave: Sick leave entitlement in Italy is specified by the employee’s labor agreement. Workers typically get full pay during sick leave – this is to be partially paid from the employer, and partially paid by the National Social Security Institute.
- Maternity Leave: Pregnant workers in Italy are entitled to 5 months’ maternity leave, which can be taken two months before delivery and three months after. A pregnant employee may also choose to start her maternity leave after childbirth.
During maternity leave, the employee is entitled to receive 80% of her regular pay from the social security system.
- Paternity Leave: Paternity Leave in Italy consists of 5 days, which can be taken during the first five months following the child’s birth. A working father can benefit from an extra leave day, which can be taken from the mother’s maternity leave, as long as she agrees to it.
- Parental Leave: Parents in Italy are entitled to parental leave of up to six months per parent, but with a limit of 10 together, during the child’s first 12 years. Parental Leave pay is 30 percent of their average daily pay.
- Probation: Probation periods may vary according to the individual or collective agreement, but they are limited to a maximum duration of six months.
- Termination Notice: A contract of employment in Italy can be terminated in the following ways:
- Dismissal by the employer
- Expiry of a fixed term
- Mutual agreement
During employment termination, a written notice must be given to the employee in cases of all types of termination, except in cases of dismissal due to serious disciplinary reasons.
Notice periods are set in the collective agreement, and payment is given for unused holiday leave.
- Severance Pay: Severance pay is also given in all cases of termination. The amount payable is equal to the sum of each annual salary, divided by 13.5.
How Do You Onboard Italy Employees Internationally?
Considering whether to move existing employees into Italy or recruit new staff in-country is the first phase of a parent company’s plan to onboard employees in a new territory. You must then deal with acquiring the right visas and work permits and ensure compliance with all local laws and regulations at the risk of attracting fines and sanctions from Italian authorities. This takes up your time, money, and resources that can be of better use in other areas of your international establishment plan.
The most efficient and effective method of onboarding employees into Italy is through a global recruitment company such as Bradford Jacobs. Our Professional Employer Organization (PEO) and Employer of Record (EOR) services will manage every stage of the employment process from finding the employee to seeing that their first check is paid on time. We can ensure the right people in the right time to help you get the ball rolling on your business expansion plans.
Translating Italian Employment Contracts
When creating employment contracts in Italy, employers must also consider contracts’ translations for both their employees and the local authorities.
It Italy, there is no obligation to create employment contracts in Italian. However, it is best practice to ensure that the employee, employer and national labor authorities (in this case, work councils or trade unions that take part in collective bargaining agreement) all understand the terms and conditions of the employment relationship.
That being said, translating a document without an understanding of the similarities and differences between both systems, the intention behind the translation, knowledge of the legal writing style of the target language, and the correct legal terminology can be risky.
You could request legal translation from local legal professionals in Italy with knowledge of the correct legal terminology required for translation, or else use an Employer of Record (EOR) like Bradford Jacobs.
With knowledge and expertise of international talent acquisition, we can handle the intricacies of German employment laws for you, deliver accurate and reliable translations, and secure the rights of both you and your employees, wherever you are.
Tick all the boxes with Bradford Jacobs
Bradford Jacobs’ comprehensive knowledge of all aspects of Italian employment laws make us the ideal partner for your expansion into the gateway to Europe.
The global reach of our Professional Employer Organization (PEO) recruitment platforms combined with the in-country knowledge of our Employer of Record (EOR) specialist teams guarantee a successful and smooth transition of your employees into your new territory (including onboarding plans, resources, and guides on local culture, customs, and business etiquette).
To learn more about our PEO and EOR packages, contact one of our sales specialists today.