Italy has significant market opportunity for many globally expanding companies, but along with that comes its highly regulated payroll and labor law. It may be hard to discern which regulations to follow in regards to employee payroll and employment contract in order to ensure you don’t violate the country’s strict regulations. Rather than trying to figure out one of the hardest countries in the world, we highly recommend using our Global Employer of Record Platform™, which lifts the burden of hiring in Italy from your shoulders to ours.
Basic facts about hiring in Italy
Because Italian labor law is relatively strict, it is best practice – and legally required – to put a strong employment contract in place that clearly spells out the terms of the employee’s compensation, benefits, and termination requirements. Additionally, the employment contract should always state the salary and any compensation amounts in Euro rather than a foreign currency.
Under Italian labor law, employees are entitled to paid leave of three working days per year to be used in the event of a serious illness or death of their spouse or second-degree relative. Additional arrangements may be agreed to with the employer in the event of a severe illness. Continuous or discontinuous leave of up to two years may be allowed for serious, documented family reasons.
Female employees are entitled to maternity leave for two months prior to and three months following the expected date of childbirth. Throughout the maternity leave, a daily allowance is granted equal to 80% of the last salary paid through the social security system (INPS).
Like many other counties around the globe, employment contracts cannot be terminated without a justified reason. Justified reasons include breach of contract, economic, or reorganization. If the dismissal is for economic reasons, the employer must follow a special procedure that involves serving notice of dismissal to the employee and the local labor office and calling a meeting to try and reach an agreement. If an agreement can be reached then the employer can opt to dismiss.
By using the services of Globalization Partners, many potential problems can be avoided. Our Global Employer of Record Platform enables clients to run payroll in Italy while payroll and HR compliance management matters are lifted from our clients’ shoulders onto ours. Please do not hesitate to contact us if you have any questions about hiring in Italy or about our Employer of Record Platform.