Italian Employment Contracts and Labour Laws

Employment in Italy is strictly regulated by the authorities and compliance with legislation is mandatory when hiring staff.

Employers can find the navigation of Italian labour laws difficult as they are comprehensively geared to support employees. Each business sector has a set of working conditions specific to it, so each is regulated differently. There are also regulations specifically applying to the size of companies and types of job. The basic rights of employees include standard working times and membership with a union. When drawing up an employment contract expert advice is well advised as trade unions are usually heavily involved in support of the employee.

Advance notification of any employment of new staff to the local employment authorities is mandatory. A copy of the contract, whether long or short term, must also be provided and the authority must be informed of any amendments to this contract.

In Italy the standard working times are 8am to 1pm, and 5pm to 7pm, Monday to Friday. Employees can only work up to a maximum of forty hours per week.

Just as labour laws are specified for each business sector, the minimum wage is determined on a sector by sector basis and not at a blanket rate across the country. The minimum wage is determined by the employers’ association and the three major union groups in the particular sector. Employers must adhere to this rate no matter if they had input in the decision or not.

The employer must contribute social security payments. The amount is determined by the job positions and the number of staff working there, and is worked out at a percentage of the combined salary, bonuses and overtime payments. Non-Italian workers are still required to pay the same social security contributions.

Terms and conditions of dismissal are outlined in the labour laws and included in all employment contracts. These terms include requirements for notice length. In Italy an end-of-service payment known as TFR must be paid to employees when they leave a company. In order to fund this payment the employer should collate 6.91% of the worker’s gross annual salary. The employee is entitled to do what they will with the money; pay it into a pension, receive it as a lump sum or in instalments.

There are two main types of employment contract in Italy: fixed, contratto a termine/contratto a tempo determinate, and permanent, contratto a tempo indeterminate. These are legally required for every member of staff working at the company. The legal conditions that they state range from job title, salary details, duties and responsibilities, holiday dates and sick pay entitlements, and notice periods.

Legal advice from an Italian labour law expert is highly recommended when drawing up an employment contract in order to comply with all labour legalities. As the employer it is your responsibility to support your employees and the labour laws in Italy strictly enforce this throughout all business sectors and industries.

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