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Recent reforms to Italian law have made the country, already home to one of the Western world’s greatest economies, more appealing to startup companies. In addition, entrepreneurs are drawn to Italy largely because of its favourable business climate and vast, educated labour force.
The Italian legal system governing employment and labour is notoriously intricate. Both national law and CBAs negotiated by labour unions and employer groups govern this area. In addition, some EU-level employment regulations also apply in Italy.
Workers in Italy enjoy generous benefits and protections, which makes compliance difficult. The following summary can help you get started.
Italy is a great place to find skilled, dedicated, and reasonably priced remote workers. The area has many highly trained individuals and a high quality of life, making it an ideal spot to find the right employee for your company.
In addition, the Italian labour force has a strong tradition of excellence across many fields. Italian labourers have a well-deserved reputation for their diligence and perseverance. The work ethic in Italy is strong, and it is reflected in the high quality of the products that companies here make.
For this reason, enterprises looking to grow their operations here should seriously consider this nation as a location.
Native Teams’ Employer of Record services help you hire and pay your team through an owned infrastructure in Italy. We handle everything from legal employment to ensuring your team is paid and managed compliantly and with care, without any third parties involved.
Hire your first Italian employee with Native Teams.
Employers must consider and adhere to several employment laws in Italy to ensure a fully compliant hiring process.
The Workers’ Statute (Statuto dei Lavoratori), enacted by Law No. 300 of 20 May 1970, remains the main body of labour law in Italy.
Contractual autonomy is a fundamental principle of Italian contract law. Under Article 1322 of the Italian Civil Code, parties are free to determine the content of a contract within the limits imposed by law.
Parties may also enter into contracts that are not specifically regulated as established contract types, provided they are intended to pursue interests considered worthy of protection under the legal system.
There are two main types of employment contracts in Italy: indefinite contracts, which are the most common, and fixed-term contracts.
An indefinite contract (contratto a tempo indeterminato) has no predetermined end date. It provides greater job security and includes entitlements such as severance pay.
A fixed-term contract (contratto a tempo determinato) has a predetermined end date and is commonly used for temporary employment, including short-term projects or seasonal work.
An employment contract in Italy must include the following information:
Download a free employment contract for Italy through Native Teams.
Employment contracts in Italy should generally be concluded in writing, although they may also be established verbally or through conclusive conduct, such as the employee commencing their work duties.
A written contract is not mandatory for the employment relationship to be valid. However, written and signed contracts are strongly preferred in practice to support registration with the relevant authorities and provide clear evidence of the agreed terms.
Without a written contract, it may be more difficult to prove the existence of specific provisions, such as probationary periods or termination agreements.
The maximum probationary period depends on the employee’s role and the applicable collective agreement.
Under the law, the maximum probationary period is:
The probationary period agreed between the employer and employee must comply with both these legal limits and any limits set by the applicable collective agreement.
In certain cases, a longer probationary period may be permitted where the employee is responsible for particularly complex tasks. A longer probationary period is not necessarily considered detrimental to the employee.
Italian law distinguishes between full-time and part-time employment. Part-time arrangements can be further classified as vertical or horizontal.
The standard full-time working week in Italy is typically 40 hours. However, Collective Labour Agreements may set shorter working hours and may calculate normal working hours based on the average hours worked over a period of up to one year.
A part-time contract (contratto part-time) applies to roles requiring fewer than 30 hours per week. Holiday entitlement is adjusted proportionally to the employee’s working hours. The employment contract should clearly specify the employee’s work schedule and the level of flexibility permitted.
In Italy, night work is regulated by individual CCNLs (collective bargaining agreements) and Legislative Decree No. 66/2003.
Night work is defined as a period of at least seven consecutive hours that includes the interval between midnight and 5 am.
As a general rule, night work must not exceed an average of eight hours in any 24-hour period, calculated from the start of work. In the absence of a specific statutory provision, this average may be calculated over a working week. However, the applicable collective agreement may establish a different reference period for calculating the limit.
The standard full-time working week is 40 hours. If daily working time exceeds six hours, employees are entitled to a break, with the specific arrangements determined by applicable collective labour agreements.
Where no collective agreement provides for a break, employees must be granted a break of at least 10 minutes between the beginning and end of each daily work period. The timing of the break should take into account the technical requirements of the work process, and the break may be taken at the workplace.
Employees are also entitled to:
Employee leave in Italy is governed by national legislation, collective bargaining agreements (CBAs), and other applicable regulations. Types of leave include:
Workers are entitled to a minimum of four weeks’ annual leave. The exact entitlement is determined by the relevant collective agreement and generally corresponds to:
Annual leave accrues monthly from the first month of employment.
The employer determines when annual leave is taken, taking into account both business needs and the employee’s interests.
Every worker, without discrimination, is entitled to a monthly salary that reflects the position they hold.
In Italy, remuneration is the compensation an employee receives from their employer for the work performed. It must reflect the quantity and quality of the work and must not fall below the minimum levels established by the applicable national collective agreement for the employee’s job category and qualifications.
To calculate the salary and taxes in Italy, click here.
Employees in Italy may be entitled to statutory sick pay for up to 180 days per calendar year through the country’s social security system.
In cases of accident, illness, or pregnancy where equivalent social security provisions do not apply, employees are entitled to continued salary payments or an indemnity, as determined by law, customary practice, or equitable criteria.
Depending on the reason for the absence, the indemnity is administered by the Italian Social Security Authority (INPS) or Mandatory Insurance against Accidents at Work.
Sick pay is capped at 180 days per year and is provided through the social security system, often with additional contributions from the employer.
Italian legislation entitles workers to parental leave, allowing parents to take time off to care for their children.
Either parent may request parental leave until the child reaches 12 years of age, or within 12 years of adoption, provided they are employed, whether full-time or part-time, and live with the child.
The parental leave allowance is generally 30% of the employee’s wages, which is lower than the maternity leave allowance.
INPS (Istituto Nazionale della Previdenza Sociale) provides compensation for up to 9 months, increased from 6 months. Each parent is entitled to up to 3 non-transferable months, for a total of 6 months between them.
The benefit may be extended for an additional 5 months, or until the child turns 12.
For this additional period, the cash benefit is only available if the parent’s income is less than 2.5 times the minimum pension set by law for the relevant year.
Maternity leave is a mandatory period of leave for pregnant employees, lasting a total of five months. Employees must generally take leave from two months before the expected date of delivery until three months after childbirth.
If their health permits, employees may instead take maternity leave from one month before the expected date of delivery until four months after childbirth.
Employees may also take the entire five-month maternity leave period after childbirth, provided a specialist doctor from the National Health Service certifies that this is compatible with the employee’s health.
Paternity leave entitles employed fathers to 10 working days of leave, which can be taken from two months before the expected date of birth until five months after the child is born.
Italian law provides several grounds on which an employment relationship may end.
These include:
The employer may terminate an employment contract only by observing the applicable notice period and providing a valid reason.
For fixed-term employment contracts, termination before the agreed end date is only permitted where there is just cause.
For permanent employment contracts, termination without cause (ad nutum) is permitted only in limited circumstances. Otherwise, the employer must meet the applicable substantive and procedural requirements. The reason for termination must be based on one of the following:
In Italian labour law, notice refers to the period between the notification of dismissal or resignation and the final day of work, typically governed by collective agreements.
According to the collective agreement, notice periods begin:
If the employer fails to observe the notice period, it must pay compensation in lieu of notice (indennità sostitutiva).
If the employee fails to observe the notice period, the employer may deduct compensation from the employee’s final pay equal to the notice period not worked, but is not required to do so.
Notice periods for Dirigenti
In case of resignation:
In case of dismissal:
Notice periods for Quadri and Impiegati
For the first five years of employment:
Italy’s New Social Insurance for Employment (NASpI) provides income support to individuals who become involuntarily unemployed.
NASpI is administered by INPS (Istituto Nazionale della Previdenza Sociale) and funded through a 1.3% contribution on taxable income from all active workers, including pensioners.
To qualify for NASpI, an unemployed person must have:
These requirements differ from the previous ASpI system, which required two years of insurance and one year of contributions within the previous two years.
Receiving NASpI is also conditional on the individual being willing to actively seek new employment opportunities.
In Italy, severance pay is known as TFR (Trattamento di Fine Rapporto). It forms part of an employee’s compensation, accrues throughout the employment relationship, and is paid when employment ends.
For each year of service, TFR accrues based on the employee’s salary for that year divided by 13.5. For partial years, the amount is calculated proportionally, with any period of 15 days or more counted as a full month.
The prohibition of competition prevents employees from engaging in activities that may compete with their employer’s business interests.
Under Article 2125 of the Civil Code, an employer may ask an employee to sign a non-competition agreement when they are hired or at a later stage. The agreement requires the employee to refrain from competitive activities during employment and after the employment relationship ends.
Once agreed, the non-competition agreement is binding on both parties and cannot be unilaterally withdrawn without mutual consent.
Italian law distinguishes between two forms of remote work: smart working (hybrid remote work) and teleworking. Different regulations apply depending on which arrangement is used.
Both smart working and teleworking require an individual agreement between the employer and employee setting out the terms for work performed away from the company premises.
The specific terms that must be included in the agreement depend on whether the arrangement is smart working or teleworking.
For both smart working and teleworking, an individual agreement between the employer and employee is required to regulate work performed outside the employer’s premises.
The main difference is how working time is organised:
For both arrangements, employers must provide the necessary work equipment unless otherwise agreed with the employee.
For teleworking, employers must also reimburse work-related expenses, such as internet and phone costs, or provide a flat-rate allowance to cover them. This requirement does not apply to smart working arrangements.
Employers must comply with the health and safety requirements that apply to the relevant remote working arrangement. These obligations are more extensive for teleworking than for smart working.
Under smart working regulations, employers must inform employees about the risks associated with working remotely.
For teleworkers, employers must also:
In Italy, the Italian Industrial Property Code (CIP) governs employee inventions. The rules that apply depend on whether the invention was created as part of the employee’s work and on the terms of their employment contract.
Employee inventions
The CIP divides employee inventions into three categories. Articles 64(1) and 64(2) apply to inventions created within the scope of employment, while Article 64(3) covers inventions that fall outside this scope.
Employer’s right of first refusal
Under Article 64(3), employers have a right of first refusal over certain employee inventions that are not covered by Articles 64(1) and 64(2). This may allow the employer to obtain an exclusive or non-exclusive licence or purchase the patent, subject to the required procedure and fair compensation.
The PE v Snamprogetti Spa case clarified how this right must be exercised. The Italian Supreme Court held that the employer must make an express declaration for the exercise of the right to be valid.
Employee compensation
Employees may be entitled to fair compensation for their inventions, particularly under Article 64(2). Where an employer exercises its right of first refusal, the employee can negotiate the price or fee for the patent or licence, with arbitration available where necessary.
Compliance requirements
Both employers and employees must follow the applicable statutory and procedural requirements. Failure to do so may lead to disputes and affect the validity or enforceability of the relevant intellectual property rights.
Employers in Italy must protect employees’ personal data in line with applicable data protection laws, including the GDPR. Key requirements include:
Hiring employees from Italy can be advantageous for several reasons. Firstly, Italy boasts a rich cultural heritage encompassing art, design, and cuisine. This diversity can inject fresh perspectives and creativity into your team.
Moreover, Italian language skills can be a valuable asset. With Italian being the official language of the European Union and spoken by millions worldwide, having employees proficient in Italian can facilitate communication in international markets.
Italy’s reputation for innovation is another key advantage. The country excels in industries such as automotive, fashion, and furniture design, making Italian employees valuable assets, particularly in roles requiring design or engineering expertise.
Native Teams helps you employ and pay your team in Italy directly through owned entities and infrastructure.
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