Brief Introduction to Employment Regulation

Hiring

With regards to hiring it is important to note that there is no general requirement for a contract to be in writing although most collective labour agreements do so. On the contrary all part-time and fixed-term contracts must be in writing. Undertakings with 15 or more employees are required to recruit personnel from “protected categories” like widows, orphans, refugees and disabled persons. 

Pay and Benefits

Collective agreements regularly define minimum levels of wages and benefits and they usually provide 13 or 14 months per year.

Working Time

Averagely, there are 8 working hours per day. The maximum working week is 48 hours (including overtime) over a reference period of maximum 4 months. Overtime can not exceed 250 hours per year, if the employer does not respect this limit he may incur in administrative fines.

Holidays

There are 11 religious and national holidays. Everyone is granted one day of rest per week and an annual holiday period of 4 weeks.

The New Italian Labour Regime

 The reform of Labour in 2012 has introduced some new features, the types of contracts are therefore now mainly: apprenticeship contracts (at least 6 months and with a ratio max. 1.5 compared to the assumptions), part-time work, fixed-term contracts determined (up to 3 years) and permanent contracts.

Termination of Employment

When an employee is dismissed, whatever the cause or status, he is entitled of the following mandatory payments:

1. Severance Pay (“Trattamento di Fine Rapporto – TFR”). The amount is determined by dividing each annual gross salary by 13.5; severance pay is taxable and free of social security contributions.
2. Other Sums. Where applicable employees are entitled to indemnity for unused holidays, permits, and thirteenth and/or fourteenth monthly pay.
3. Notice Period. Employees dismissed for reasons other than Just Cause are entitled to a notice period which depends on the employee’s category and the length of the service.

Social Security System

The Italian Social Security System managed by INPS (“Istituto Nazionale Previdenza Sociale”), is compulsory and provides comprehensive benefits for all employees. Employee and employer jointly finance social security costs, which are calculated on gross earnings. Employers pay two thirds of contributions whilst employees pay the remaining third.

A Wage Compensation Fund is available to industrial workers. The employer provides 80% of gross wage for hours not worked, and it is subsequently reimbursed by INPS.
An Extraordinary Wage Compensation Fund helps to secure employment once production resumes in a restructured, reorganized or converted company. Only companies with more than 15 workers are eligible. Compensation equals 80% of the worker’s gross wage for hours not worked, and it is payable in a 12 month continuous period.

The Italian compulsory state pension system is financed by social contributions paid by the employer during one’s working life, and it is based on actuarial fairness. The retirement age is now set at 67 years .

The system has recently been reformed several times and there is a transient complex legislation.

It is possible to sign up for supplementary pension provision.