HR Solutions & Employee Relations in Italy with IRIS

IRIS HR Consulting has experience helping businesses expand in Italy. Without expert guidance, it can otherwise be risky and costly to leave local laws and legislation open to interpretation. For a scalable, compliant operation, IRIS can manage your HR in Italy to help businesses hire, recruit, and pay staff overseas in new, unfamiliar countries. As a popular destination for businesses, IRIS can navigate local barriers – from culture to compliance – to arrive at a rewarding opportunity for your business to thrive in this exciting marketplace. 

Take your business to Italy with IRIS HR Consultancy.

Global expansion in Italy

A forceful economy in Europe, Italy has been known for investment opportunities. With one of the largest global economies, and an easily recognisable culture, Italy continues to grow year on year, offering businesses an ideal expansion platform within Europe.

As well as being geographically interconnected, Italy has enjoyed its role as a host to, and stimulus for, foreign investment from around the globe, including US markets and farther afield. Its positive reputation for being richly historical, involved with several art movements, and a bustling food culture, is only the starting point of Italian culture. Italy also has well-established infrastructures for the likes of R&D, design, and innovation, which is supported by a strong reputation for manufacturing.

However, for businesses looking to enter this lively European market and take advantage of growth opportunities, they should be prepared to navigate an at-times complicated regulatory environment.

A Guide to Employing Staff in Italy

Everything you need to know about the employment laws and compliance requirements in this country

The Mediterranean Sea

Strategically positioned at the heart of the Mediterranean Sea, Italy has become a trade gateway for many accessing the European Union, northern parts of Africa, and the Middle East. In particular. Italy’s ports receive significant portions of maritime traffic, fuel traffic and container traffic.

Establishing your business in Italy

Embarking on a global expansion is a strategic move to gain extra value from exciting foreign markets, which are constantly evolving and full of opportunity. But the international stage isn’t always easy to navigate. 

For example, Italian employment law is driven by the Italian Civil Code, where the Civil Code is typically supplemented by Collective Bargaining Agreements. 

Yet, before establishing your operation in the Italian market, you must ensure compliance with employment law. 

Employment laws in Italy

When first expanding your business into Italy, navigating local laws, legislation and rules of employment laws is not always easy and the regulatory environment can seem complex. Throughout Europe, these laws are almost never universal. Rather, employment is dynamic and reflects the country’s social, economic, cultural opportunities. 

Did you know?

Italy is one of the largest manufacturing bases in Europe, rivalled only by the ever-productive Germany. The outcomes is typically associated with products of a higher quality and design.

Employment rights & contracts in Italy  

Employees may be employed under a written or oral contract. However, for some clauses to be valid, they must be in writing these include but are not limited to probationary period, fixed-term and non-compete. Furthermore the employer must inform the employee of key terms and conditions of employment within 30 days of starting.

Typically, a contract should mention the following:

  • Name(s) and Addresses
  • Place of work
  • Start Date
  • Hours of Work
  • Term
  • Details of Probationary Period
  • Any Benefits and Compensation

Hiring & recruitment in Italy

When getting your first hire overseas, you will need to negotiate terms of employment. But that requires local knowledge, strict compliance, and an understanding of what to include in an offer. 

For foreign hires, the employer bears responsibility to ensure that all employees are authorised to take up roles in Italy. Once this is obtained, the employee must then apply to the relevant Italian embassy abroad for a visa, followed by a permit to stay once arriving in Italy. 

Those who are EU (European Union) or EEA (European Economic Area) or Swiss nationals will not be required to obtain permits for work. However, they must register with local authorities if their stay is for more than 90 days.

Equal Opportunities in Italy

The legal framework in Italy driving equality is the National Code of Equal Opportunities, established by the legislative decree No. 198 (2006).

What are the working hours in Italy?

The standard working week in Italy is 40 hours. Yet, no employee’s average working hours should exceed 48 hours weekly.

Overtime in Italy

Any hours worked over the weekly 40-hour threshold will be counted as overtime. The average working time, including overtime, must not exceed 48 hours per week (calculated over a four month period) or exceed the annual overtime limit of 250 hours.

Sick Leave in Italy   

Sick leave and pay entitlement are generally set for a period of up to 180 days per annum; however, where CBAs offer enhancements on this entitlement, the extension of leave may range from six months to a year.

Employers are responsible for funding the first three days of a recorded sick absence, thereafter social security will cover a benefit at 50% of the employee’s wages for the following 20 days. The rate increases to 66.66% thereafter. The exception to this is for executive employees, known as dirigenti.

Maternity Leave in Italy

Pregnant employees receive a benefit, under mandatory maternity absence, entitling them to paid leave for 5 months. This can be taken at two months prior to birth, and three months thereafter; or one month before and four months after. They receive 80% of pay entitlement from the INPS, with the remaining 20% funded by the employer.

Public Holidays in Italy

There are in public holidays in Italy are as follows:

  • New Year’s Day (1 January)
  • Epiphany (6 January)
  • Easter Sunday and Monday
  • Liberation Day (25 April)
  • Labour Day (1 May)
  • National Day (2 June)
  • Assumption Day (15 August)
  • All Saints’ Day (1 November)
  • Immaculate Conception Day (8
  • December)
  • Christmas Day (25 December)
  • St. Stephen’s Day (26 December)

Vacation or Annual Leave 

In Italy the statutory minimum paid vacation allowance is an entitlement set at four weeks per year. Many CBAs, however, are often generous with the conditions offered to employees. The law prohibits employers from substituting, or paying an indemnity to, employees instead of this vacation allowance. Only though termination may this be plausible.

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Deliver your business to new, exciting markets with confidence and compliance.

End of Service 

HR in Italy requires compliance not only during an employee’s service, but also at the end of it. End of service might include severance, termination, redundancy, and leaving packages.

For these more complicated matters, you will need expert HR guidance to navigate Italian labor laws and remain compliant. 

Severance Pay in Italy   

The termination of an employee is strictly guarded and the lawful conditions for dismissal are narrow. Employer’s must have “just cause”, such as gross misconduct, in order to file dismissal on summary notice. Otherwise, employer’s must be justified and evidenced in their reason for dismissal including both subjective (weak performance) and objective (redundancy) reasoning.

In Italy, statutory severance pay, known as TFR, is provided upon termination and is irrespective of the reason for dismissal. The rate is calculated against the salary and length of service, which equates to approximately one month’s salary for every year of service.

Basic Health Coverage

The Italian National Health Service (SSN) is funded by company taxes, combined with local regional taxes and includes:

•    Free GP visits

•    Subsidised pharmaceutical care

•    Public hospitalisation treatment

Social Security

Considered a generous system, these benefits are available to both citizen and non-residents, depending on their conditions. The provisions included are often subject to a number of reforms and so this is typically evolving.

The compulsory social security system covers:

•    Pensions

•    Sickness and maternity leave

•    Unemployment benefits

•    Mobility benefits

•    Family allowances.

Supplemental benefits

Health Insurance

Dirigenti level, or executive, employees can only opt out of the FASI registration if and when the employer provides a medical insurance plan, but this must provide equivalent or higher benefit levels for this to be plausible.

Occupational Pension

Non-state retirement plans are referred to as “fondi pensione” and are usually a combination of collective and local agreements, or set up on a voluntary basis by the employer.

Why Partner With IRIS?

When entering new, exciting countries like Italy, you will need an employment specialist to navigate the parts of local laws that are mandatory and those that are not. Delivering a compliant solution, IRIS can help your business arrive into new marketplaces whilst protecting your workforce – our partners can discover power and protection through us. 

Overseas expansions can seem risky to those who dare it alone. Understanding the complexity of a fully complaint solution, IRIS can help businesses expand globally, especially when they build bridges in Italy.

Our cost-effective, knowledgeable approach to HR in Italy makes us an ideal partner to commence your overseas plans.