Compensation and benefits are 2 of the most critical parts of any contract or offer letter negotiation. In Italy, you’ll need to pay even closer attention to compensation and benefits laws to make sure you meet the statutory minimums as well as any additional benefits outlined in Collective Bargaining Agreements (CBAs).

Italy compensation laws

Italy doesn't have a national or regional minimum wage. Minimum pay is set by sector-specific national collective bargaining agreements (CCNLs). There are several national CBAs related to the different sectors of business, and every national CBA provides a mandatory minimum salary in order to guarantee the workers a decent lifestyle.

Some CBAs pay two additional monthly salaries: the tredicesima (paid in December) and the quattordicesima (paid in June or July). The latter is due under specific national collective agreements only.

Guaranteed benefits in Italy

Every employee in Italy needs to receive certain guaranteed benefits. For example, taxes from both employers and employees fund Italy’s national health insurance, which the National Health Service (SSN) manages. Every employee gets a health card that entitles them to free or low-cost treatment.

Employees also are entitled to paid annual leave based on their applicable CBA. Under the Confcommercio trade sector CBAs, employees get 26 working days of paid vacation, called ferie. Executives classified as dirigenti get 30.

In addition to the vacation days, employees are entitled to hourly paid leave as follows:

  • For full-time employees with seniority of less than two years: 32 hours per year
  • For full-time employees with seniority of two to four years: 60 hours in businesses with up to 15 employees and 68 hours in larger businesses
  • For full-time employees with seniority of four plus years: 88 hours in businesses with up to 15 employees and 104 hours in larger businesses

Vacation days are in addition to 11 nationwide public holidays and one local patron saint’s day, which varies by municipality.

It’s important to note that in Italy “ferie” days don’t expire, and if they are not used the days will be accrued and paid out at the end of the employment relationship.

Employees must take at least two weeks during the accrual year and these must be consecutive if the employee requests it. The remaining vacation days can be taken at the discretion of the employee throughout the year. In most cases, unused vacation is paid when employment ends.

Pregnant employees get five months of compulsory maternity leave. With medical certification they can take two months before birth and three months after, one month before and four months after, or five months after.

Italy benefits management

Making sure employees in Italy receive both guaranteed benefits and any supplemental benefits is an essential part of benefits management. Guaranteed benefits are either set by the national standard or dictated by a CBA. Supplemental benefits encompass anything that is not required but is common in Italy and expected from workers.

Some traditional supplemental benefits are:

  • Private health insurance
  • Company car
  • Mobile phone
  • Meal voucher
  • Additional training

Benefits and compensation restrictions

You’ll also need to follow several restrictions on benefits and compensation. For example, CBAs regulate everything from rest breaks to the appropriate overtime pay. Before you stipulate these terms in an employment contract, it’s best to cross-reference any relevant CBAs to determine the minimum level of compensation and benefits required.

Partner with G-P to build your everywhere workforce

As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.

Learn more about our platform and request a proposal today.