The new ways in which the global market is gradually opening up, it has presented opportunities for employers to connect with the right candidates in Italy. However, it is a task that requires Italy Employer of Record to take care of all the legalities and compliances.
We at Globalization Solutions offer an extensive range of corporate and employment solutions to help your business with global expansion. In addition to assisting you in streamlining your business expansion, we also help you with end-to-end recruitment solutions to deploy strategic sources for hiring and onboarding skilled and fresh professionals!
Hiring in Italy
Italy does not have a centralized employment law, although the Italian Constitutional and Civil Code recognize the rights of employees, and a number of laws regulate the nature of work relationships. In Italy, the majority of workers are covered by collective labor agreements that guarantee more benefits than the minimum necessary by Italian law.
It is vital for businesses in Italy to have valid employment contracts due to the country's complicated employment regulations. To guarantee compliance with all applicable regulations, we may serve as your employer of record in Italy. In addition, we can advise you on societal beliefs and recruiting best practices and keep you informed of any changes in employment legislation.
Employment Contracts in Italy
In preparation for the hiring of new employees, here are some typical requirements you'll need to be aware of in order to produce a compliant contract, along with some information on how an employer of record and a professional employer organization (PEO) may assist you with your specific HR needs.
One extra festival is held in honor of the patron saint of each town or city. It's worth noting that employees who are required to work on a public holiday are entitled to an additional day's pay.
Type of Contracts in Italy - The most typical sort of contractual agreement is a written one that includes specifics regarding the employee's compensation, the activities he or she is expected to complete, the working hours, and vacation time, among other aspects.
Only employees above the age of 15 may sign this form of contract, which is for an infinite amount of time. Temporary contracts can be used for a specific group of personnel, and if required, they can be renewed for an additional 36 months.
When a worker is engaged through a Labor agency, they are subject to a supply contract. The supply contract might be signed for an indeterminate or predetermined amount of time.
Working Hours in Italy - The standard workweek in Italy is 40 hours. Over the course of many months, the average number of hours worked each week should not surpass 48. As a rule, employees and children alike are entitled to at least two consecutive days of relaxation every week.
Public holidays in Italy - Employees in Italy are normally entitled to paid time off on 12 national holidays, which include the following:
There are 12 federal holidays in Italy
• New Year’s Day
• Easter Monday
• Liberation Day
• Labor Day
• Date of the Founding of the Republic)
• Assumption Day
• All Saints’ Day
• Feast of the Immaculate Conception
• Christmas Day
• Stephen’s Day
Bonuses - Italy's "tredicesima mensilità" (13th month or yearly bonus) is rather prevalent, and it's often given out right before the holidays. Quattordicesima mensilità, or summer pay, is offered by several large corporations to their staff.
Probationary Periods - Italian law permits the use of probationary periods for executives and other high-level workers, although they are constrained to a range of 6 months for administrators and high-ranking staff and 3 months for other workers.
Termination and Severance - In Italy, an employee can only be fired for a legitimate and severe reason. When it comes to dismissal in Italy, the courts interpret a substantial breach of an employee's duties as a just cause. When an employer is able to objectively demonstrate the business necessity for severance, or for so-called arbitrary reasons, such as a breach of contractual commitments or carelessness, an employee may be terminated on these grounds.
In cases of wrongful termination, the employee may be entitled to compensation equal to three years' worth of unpaid wages.
It's not uncommon in Italy to receive severance money even if you quit or are fired for cause. Employers are required to set aside a portion of their monthly compensation to fund severance pay.
With our experience as your official employer of record in Italy, we can work side by side to address the unanticipated occurrence of an employee termination as swiftly as possible, giving legal counsel and a customized method that guarantees you avoid going to labor court.
Italy Compensations & Benefits
One of the most important aspects of any contract is the consideration of compensation and benefits. To ensure that you get the mandatory thresholds and any additional benefits specified in a bargaining agreement, you'll need to pay even more attention to Italy's compensation and benefits legislation. Instead of trying to figure it out on your own, Globalization Solutions is here to assist you.
You may have difficulty keeping up with Italy's ever-changing regulations on employee benefits and privileges. The Employer of Record may assist in verifying that the organization is adhering to the country's recruitment regulations. The burden of laborious paperwork and the need to squander important time on time-consuming bureaucratic tasks is lifted when you have an Employer of Record.
Italy Compensation Law - No regional or national minimum wage exists in Italy, but a collective bargaining agreement (CBA) might set one. Pay should be proportionate to the amount and quality of labor performed to ensure a reasonable standard of living for employees. A national CBA's basic income may be considered legal even if your firm does not implement it.
Compensation regulations in Italy do not mandate a 13th-month or yearly bonus, although most CBAs do. If a company has a CBA, it is required by law to give its workers the 14th month of salary over the summer.
With the assistance of an Employer of Record Italy, you can overcome the challenges of being unfamiliar with Italian political laws, labor relations, recruiting processes, selecting the most qualified applicant for your firm, and other issues. When you work with an Italian Employer of Record, you will get in-country support through each stage of the recruitment and selection of top employees.
Guaranteed Benefits - In Italy, all employees must be entitled to a specified set of benefits. Employer and employee taxes support Italy's national health coverage, which the National Health Service administers. There is health care provided to every employee, and this card enables the owner no-cost medical care. Employees should be entitled to 25 days of vacation and 32 hours of paid vacation each year, as per the CBA guidelines.
Maternity Leave - Maternity leave in Italy is mandated to be five months long. For the duration of this time, mothers are eligible to receive social security benefits equal to 80 percent of their usual wage.
Paternity Leave - Within five months after the birth of a child, fathers are required to take seven paid days of paternity leave and may take an additional day in lieu of the mother.
Probationary Period - Employees who are not designated for management tasks are subject to a three-month statutory probationary term, and all other employees are subject to a six-month probationary period. In most cases, the national CBA that the employer is subject to specifies the applicable probationary terms.
Annual Leaves - The legal maximum annual leave for an employee is 26 days. If the worker does not use the leave, it is passed over to the next year, and there is no cap on the number of days of compensation that the employee may receive.
Sick Leave - Under Italian labor law, workers are entitled to a three-day paid leave in the case of severe sickness or the death of an immediate family member. In the case of a serious sickness, the employer and employee might work out a mutually beneficial arrangement. In the event of a significant family emergency, a two-year leave of absence may be granted.
Taxes in Italy
Companies that do business in Italy are subject to a variety of taxes, notably corporate income tax (IRES), withholding tax, a municipal tax on economic activities (IRAP), VAT, identity tax, transaction tax, social security taxes, and stamp duty (among other levies). It is now possible to pay 27.5 percent corporation tax in Italy. The revised VAT rates are 24 percent in 2016, 25 percent in 2017, and 25.5 percent in 2018.
Payroll Deductions and Contributions
Despite the fact that Italy does not have a payroll tax, its corporation tax rate is 27.5 percent, which is higher than the national average. Workers’ income tax rates vary from 23 percent to 43 percent on a progressive system, meaning that making more money entails paying a higher tax rate than earning less money does. In addition to income taxes, employees may be liable to a withholding tax on copyrights or returns, which is in addition to any other taxes that may apply.
As an Employer of Record, we at Globalization Solutions assist our customers in managing their payroll in Japan while also taking care of all human resource and tax issues on their behalf, allowing them to concentrate on their core business.
Rates for social security and Medicare withholding
Approximately 40 percent of an employee's taxable income is deducted from his or her social security benefits. This amount is divided between the employers, who pay 30% of the total, and the employee, who contributes the remaining 10% of the total. But the rate is dependent on a variety of criteria, including the kind of work performed by the firm, the number of workers, and the position held by each person within the organization.
Italy Employer of Record Features and Benefits for the Employer
Employers are often in charge of all legal elements of their worker’s employment. This procedure will likely be more time-consuming if you are in a new nation.
At Globalization Solutions, we have a wealth of knowledge and expertise dealing with the payroll and tax systems in Italy, as well as other local rules and regulations. We can assist you with a variety of tasks.
- A solution that is specifically designed to meet the demands and future ambitions of your firm.
- Local professionals can provide you with all of the information you need about the Italian market.
- Offering EOR best practices in the areas of taxation, agreements, costs, and social security benefits
- Hiring with lightning speed and with efficiency
- Start your operations within days.
Italy Employer of Record Features and Benefits for the Employee
Your company's most important asset is its employees. They are responsible for keeping the motivation up, and it is thus critical to develop a solid agreement that is acceptable to both the employees and the employer.
Globalization Solutions as your Italy Employer of Record is responsible for ensuring that your workers are satisfied with the terms of the employment contract. A wide range of excellent perks as well as a dependable and legally acceptable hiring process are available because of our extensive network and team of professionals. We will see to it that they have a good time by providing them with:
- Quick and clear onboarding.
- A written employment contract that complies with local laws and requirements.
- A monthly payment that is agreed upon and paid on time.
- Great benefits such as pensions and insurance.
- The presence of a frequent point of contact
- Details and counseling on changes in local rules that are up to date are provided
Why Globalization Solutions?
If you're a business owner looking forward to expanding your business to Italy, undergoing all the processes and expenses to solidify the whole setup is not the only option! We at Globalization Solutions are here to help you in getting started with your business operations in Italy with our comprehensive employment solutions.
We are a team of proficient expansion and proliferation experts, so we can efficiently accelerate the expansion of your business into the Italian market. Be it your requirement for dealing with employee taxes, visa application benefits, insurance sponsorship applications for other transactions, we are here as your Italy Employer of Record at your service
Contact us today to expand the horizons of your business's successful reach across the Italian markets.