Employment Laws In Italy

Contractual Agreements

The Italian Labor Code (Testo Unico delle Leggi Sociali) is a thorough legal framework governing labor relations and employment laws in Italy. Some of the key aspects of the contractual agreements in Italy include:

Types of employment contracts 

Understanding the different employment contracts is crucial for both employers and employees. It ensures compliance with the contract employment law in Italy and clarifies each party's rights and obligations. 

 Part-time contracts

• Involve specified working hours, such as by day, week, month, and year (in writing).

Fixed-term contracts

• Have a predetermined duration and are highly flexible.
• A total number of 8 extensions are allowed on fixed-term contracts.

On-call employment contracts

• Employees make themselves available to work during specific periods.
• Employees can be subjected to short notice periods.

Apprenticeship

• Designed to facilitate the vocational training and development of individuals entering the workforce.

Temporary agency contracts

• Involves the temporary employment of workers (can be open-ended or fixed-term) through an eligible employment agency.

Obligations and rights for both parties

In Italy, employers and employees have obligations and rights outlined in the labor laws and regulations. For example, employers must provide their employees with the right amount of paid leave. Failure to do so might result in serious legal consequences. 

Employers must be aware of the common global HR compliance mistakes to maintain a fair and harmonious workplace in Italy.

Working Hours and Overtime 

Working hours and overtime compensation are governed by the labor law in Italy. 

Regular working hours

• The standard working week in Italy is typically 40 hours. 

Overtime regulations and compensation

Overtime compensation in Italy is determined as follows:

Minimum Wage and Compensation

• The national minimum wage in Italy can differ by industry and region.
• Collective bargaining agreements often determine wage levels. It can fall within the range of €7-9 per hour.

Factors affecting wage determination

Various factors influence wage determination in Italy.

• Industry and sector

Wages often vary across different sectors and regions. Each industry may have collective bargaining agreements establishing wage scales and conditions specific to that field.

For example, the minimum wage per hour in construction is €8.5, whereas the minimum wage per hour in finance and insurance is currently determined to be €12.95.

• Inflation and economic conditions

Collective agreements may include provisions for periodic wage adjustments to account for inflation and changes in the overall economic climate. 

• Education and skill levels

The educational qualifications and skill levels required for a particular job can also impact wage levels. Skilled and highly educated workers may command higher salaries.

Employee Benefits and Social Security 

Employee benefits and social security play crucial roles in the overall compensation package for workers in Italy. 

Statutory benefits

Public health insurance

• Mandatory benefit for all legal residents in Italy, both Italians and foreigners.
• Governed by the National Health Service.

Sickness cash benefits

• Daily allowance provided to replace lost income due to sickness.
• The payment of the cash sick allowance begins on the fourth day of illness.
• Paid for a maximum of 180 days per continuous period of illness. 

13th-month pay

• 13th-month pay and 14th-month pay are mandatory in Italy. 
• The former is usually paid in December and the latter in June. 

Invalidity benefits

• This is for insured workers whose working capacity is permanently reduced by more than two-thirds.
• The benefit is initially paid for up to three years, with the possibility of further extension for subsequent three-year periods.

Incapacity pension

• This is for insured disabled workers who cannot perform activities due to physical or mental impairment.

Old-age pension and benefits

• All employed persons, self-employed individuals, and professionals are covered against the lack of working capacity due to old age. 

Additional Perks and Benefits

Unemployment benefits

• The maximum payable amount in unemployment benefits is € 1,119.32 per month.

Maternity and paternity benefits

• During the maternity and paternity leave periods, compensation amounts to 80% of the employee’s pay. 

Family benefits

• The allowances provided in family benefits are usually determined based on the family size and household income.

Long-term care benefits

• Benefits addressing the risk of long-term care are mainly available through two systems, namely, the social security system and the social welfare system in Italy.

Social security contributions and requirements 

Labor laws of Italy dictate that employers and employees must mandatorily bear social security contributions.

• It constitutes 40% of the employee’s gross compensation and is divided into a 30% charge for employers and a 10% charge for employees.
• 33% of the total rate is paid to the National Pension Scheme.
• The remaining part of the social security contributions is paid to other funds such as maternity, social mobility, and unemployment funds, among others.

Vacations and Paid Time-Off 

Employment laws in Italy emphasize the importance of providing employees with adequate rest and recreation. Here are the key aspects of vacations and paid time off in Italy:

Annual leave entitlement

• 22 days of statutory minimum annual leave.
• The duration of paid hourly leaves (on top of annual leave) increases with years of service

Public holidays and special leaves

Sick leave

• Employees are entitled to a minimum of three days and a maximum of six months of paid sick leave.

• First three days- 100% of salary
• 4th-20th day - 75% of salary
• 21st-180th day - 100% of the salary

• Employees must provide a doctor’s certificate to avail of these benefits.

Maternity leave

• Female employees in Italy are granted five months of mandatory maternity leave.
• It can be taken three months before the birth.

Paternity leave

• Male employees are granted ten days of compulsory paternity leave. 
• It can be further extended to 20 days in cases of multiple births.

Compassionate leave

• Italian labor laws mandate employers to grant at least three days of paid leave for employees to attend close family funerals or care for seriously ill relatives.

Wedding leave

• Employees are entitled to 15 calendar days of paid wedding leave.

Parental leave

• A maximum duration of 10 months of parental leave is granted to employees with children up to 12 years of age. 

Family care leave

• Two days of paid leave are granted to employees in Italy.

Study leave

• Labor laws of Italy mandate two years of unpaid study leave.

Leave for electoral operations

• Employees are granted special leave or time off to fulfill their duties at the election offices.

Leave for disability

• Employees in Italy have the right to avail three days of paid monthly leave to care for a relative, kin, or spouse with a severe disability.
• Employees with severe disabilities can take three days of paid leave per month or two hours per day.

Leave for blood donors

• Blood and blood component donors are entitled to take the entire day off on the day they donate.

Extraordinary leave

• Under specific conditions, employees with family members suffering from severe disabilities can take extraordinary leave lasting up to two years over the course of their entire working life.

Leave for medical care

• Thirty days of annual leave is provided to ‘mutilated’ or ‘civilly disabled’ individuals, with a recognized reduction in work capacity exceeding 50%.

Leave due to child’s disability

• An employed mother or father (including adoptive parents) of a child with severe disability can avail of an alternative to extending parental leave up to three years.
• It entails taking two hours of paid leave daily until the child reaches the age of three.

Mother’s daily rest

• During the initial year of the child’s life, a working mother is entitled to two breaks, each lasting one hour.
• If the mother’s daily work duration is less than six hours, she is entitled to only an hour's break.

Recall to arms

Employees called back to military service are entitled to the following,

• During the initial two years, a monthly allowance equivalent to their regular pay
• Thereafter, and for the duration of their military service, if the military pay is lower than their regular pay, a monthly allowance equal to the difference between the two amounts.

Leave for volunteers of civil defense

Employees who are members of civil protection volunteer organizations are entitled to leave for various activities related to civil defense. 

• 90 days of leave per year (30 days continuous) - Rescue and assistance during emergencies
• 180 days of leave per year (60 days continuous) - Relief and assistance during national emergencies.
• 30 days of leave per year (10 days continuous) - Training and education

Leave for mountain and speleological rescue

• Employees who are volunteers at the National Alpine and Speleological Rescue Corps of the Italian Alpine Club (CAI) are entitled to leave from regular work duties on specific days when they engage in rescue operations or related activities.
• Additionally, they are permitted to take leave on the day following rescue operations that extend beyond eight hours or continue past midnight.

Termination and Severance

Mentioned below is a detailed account of the termination process, as outlined in the contract employment law in Italy. 

Please note that termination of employment is a very complicated process and requires a case-to-case-based evaluation. 

Grounds for termination

During probation period

Employers may terminate an employee during the probationary period for the following reasons,

• Role misfit
• Persistent absence from work
• Poor performance
• Bad behavior

Termination due to poor performance

• In the event of poor or unsatisfactory performance, employers must provide written documentation to the employee.

Termination with cause

• Gross neglect of duties
• Breach of trust/loss of confidence
• Analogous causes
• Fraud/theft/sexual harassment
• Wilful disobedience

Termination due to business redundance

• Declaration of bankruptcy
• Liquidation of the employer
• Disease
• Reorganization
• Restructuring
• Closing a particular position

Notice period and severance pay

Italy labor law dictates a minimum notice period of 1 month for every employee. The maximum notice period during probation is subject to collective bargaining agreements.

Regardless of the grounds for termination of employment, employees are entitled to a severance payment, referred to as TFR (trattamento di fine rapporto). The TFR is calculated based on 7.5% of the employee’s annual salary.

Discrimination and Equal Opportunity

The Italian legal framework includes laws and legislation prohibiting discrimination on various grounds. Employers must be familiar with and comply with the anti-discrimination law, and employees must know their rights. 

Prohibitions against workplace discrimination

• The Worker’s Statute (Act 300 of May 20, 1970) prohibits employment discrimination based on several grounds, including sex, political opinions, religion, age, and nationality, among others.

Health and Safety Regulations

In Italy, the Legislative Decree. 81 of April 9, 2008, regulates health and safety at work.

• It aims to establish consistent protection standards for workers across the national territory. 

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FAQs

Q1: What is the employment law in Italy?

A1: Employment laws in Italy are primarily governed by the Italian Labor Code. It establishes the rights and obligations of employers and employees and lays down various regulations related to regular working hours, employment contracts, and overtime, among others. 

Q2: What is the work policy in Italy?

A2: The work policy in Italy includes various laws, regulations, and norms that govern employment relationships and working conditions. For example, the labor laws of Italy specify a standard working week of 40 hours.

Q3: What is the termination pay in Italy?

A3: In Italy, termination pay or severance pay is a statutory entitlement provided to employees upon termination of their employment contract. The standard termination rate is currently established at 7.5% of the employee’s annual salary for each year of service.

Q4: Does Italy have a 4-day work week?

A4: The four-day workweek concept has not yet been widely adopted nationally in Italy. Instead, it follows a standard working time of 40 hours per week, spread over five working days.