Empowering business expansion: Embracing Italian labor law principles

Italian labor law principles stand out positively in comparison to many other foreign countries, as they generously grant employees better social, income, and labor protection. This progressive approach reflects the country's commitment to safeguarding workers' rights and well-being. While it may impose some additional financial and operational responsibilities on companies and employers, it also fosters a strong sense of security and stability for the workforce.

If you are considering expanding your business to Italy, you can take comfort in knowing that these labor laws prioritize the welfare of employees and create a conducive environment for both employers and workers to thrive. To assist you in your journey, we have listed below the most important laws and regulations affecting labor conditions and social security in Italy.

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Minimum wage & extra payments

There is no statutory minimum wage in Italy. The sector usually sets minimum wages for each contractual level in the relevant national collective agreements (NCAs). The NCBA (in Italian: Contratto Collettivo Nazionale di Lavoro) of the Trade Sector applies to all employee’s on Parakar’s payroll.

Historically, salary in Italy is paid in 13 instalments – 12 monthly wages plus one additional payment taking place in December. However, this may differ among companies and Collective Agreements. Some NCAs also include a 14th instalment in June. Salary can also be paid in 12 monthly payments, so the annual salary will be divided in 12 instalments and the employee will receive the same salary each month.

Sick leave

Employees in Italy are entitled to paid sick leave, paid by the employer and subsequently the government. Statutory sick pay starts on the fourth day of sickness. The first three days are “waiting days” (“giorni di carenza”) and are typically paid in full by the employer. Statutory sick pay is capped at a maximum of 180 days per calendar year. Between the 4th and 20th day of illness, the statutory sick pay amount is, generally, equal to 50% of average daily pay. This moves up to 66% between the 21st and 180th day. During the sickness period, the employment continues to have legal effect. Consequently, all employee rights (such as seniority, holidays, permits, etc.) continue to be accrued by the employee.

Paid annual leave

All employees are entitled to a minimum of 26 days paid annual holiday per year in addition to public holidays and abolished bank holidays. The employee has to take at least 2 weeks in a year and the remaining 2 weeks accrued need to be used within 18 months from the end of the year in which they’re accrued.

Paid hourly leave

The CBAs grant each worker special paid leave known as ROL (Reduction in Working Hours) to employees with two years of seniority. These are permits that accrue every month to the extend established by the reference collective agreement. The hourly leave can be consumed on hourly basis, it can be spread out over a few days, and it doesn’t have to be booked on full day basis. A full-time employee accrues 2.66 hours per month. If not taken, these must be paid out at the end of December of each year.

Working hours

In principle, employees must work 40 hours per week, except when more favorable provisions are afforded by the employees under the CBA. The duration of the weekly working time cannot exceed 48 hours a week, including overtime. This is to be calculated over a period not exceeding four months, unless the applicable NCA increases such a period up to six months.

Medical examination

For every employee that works with a PC/Laptop for more than 20 hours a week, the company is required to offer a medical assessment to the employee, which needs to be performed:

• Within 30 days from the employment date.
• Every 5 years if there aren’t specific medical conditions and the employee is less than 50 years old.
• Every 2 years if the employee has medical conditions (vision impediment, back injuries, stress related diseases) or 50+.

Social Security

All employees hired by Parakar Italy are automatically insured via the Italian Social Security system “Istituto Nazionale della Previdenza Sociale” (INPS). The Italian social security system allows access to:

• Healthcare
• Sick leave, paternity/maternity leave
• Inability to work
• Unemployment
• Public pension

The employer’s share of these numerous contributions ranges from approximately 29% to 32% of taxable compensation. This amount will depend on various criteria, such as the seniority of the employee, the type of the activity, the number of the employees, the terms of the applicable CBA, etc.

The employee’s share of these contributions ranges from 9-11% of taxable compensation. This amount will depend on the classification of the employee (worker, executive or manager) and the employer’s activity (manufacturing, trading, tourism, etc.) The employer withholds the employee’s social security contributions from the monthly salary.

If you have any questions or want to know more about the British law.?Contact our experts, who are always happy to answer your questions about the Italian labour principles.