Employer of Record (EOR) in Italy
The Mediterranean nation of Italy is renowned for its rich history, diverse culture, and excellent quality of life. Italy’s economy is likewise excellent, with a nominal GDP ranking of eighth in the world and a variety of flourishing industries ranging from agriculture to manufacturing, luxury products, and financial services, among others. For these and other reasons, Italy EOR is a preferred location for foreign corporate expansion.
With some of Europe’s most prestigious universities and a robust service sector, Italy offers a vast, skilled workforce to assist your worldwide business plan. By utilizing us as your EOR, we can help you in locating and hiring Italian talent following local legislation and laws within days.
Italy is one of the global leaders in e-commerce and maintains steady and extensive international trade relations. Italy is recognized for its exports and trade, but its service industry contributes more than 70 percent to its economy.
With innovations, e-commerce, tourism, and trade as the driving forces of the economy, Italy offers innovative enterprises seeking worldwide expansion in a world of opportunity. By utilizing our services, you may maximize the country’s abundant possibilities.
If your firm intends to expand into Italy, you should anticipate a complicated procedure. Italy’s specific business and employment legislation, cultural practices, and language might cause delays in any expansion initiatives, despite the benefits.
In Italy, it is obligatory by law to have a comprehensive employment contract, including the terms of the employee’s remuneration, benefits, and termination. A contract for employment in Italy should always list the wage and any other compensation in Euros, rather than a foreign currency.
A typical work week for an employee is 40 hours.
Employees whose daily work hours exceed 6 hours are entitled to a rest break. In the absence of a collective bargaining agreement, rest intervals cannot be less than 10 minutes.
Italy observes 12 national holidays, which are generally treated as paid leave for employees:
- New Year’s Day
- Easter Monday
- Labor Day
- Liberation Day
- Date of the Founding of the Republic
- All Saints’ Day
- Assumption Day
- Feast of the Immaculate Conception
- Stephen’s Day
- Christmas Day
Additionally, each community celebrates an additional holiday in honor of its patron saint.
If a public holiday comes on a weekend, employees earn an additional day’s pay, while those who must work on a holiday receive overtime compensation.
Days of Vacation in Italy PEO
The CBA stipulates that employees are entitled to 25 vacation days and 32 hours of paid leave.
According to Italy’s labor legislation, employees are entitled to three paid days off each year in the event of a serious sickness (with a doctor’s note) or the death of a spouse or relative within the second degree. In the event of a serious sickness, arrangements may be reached with the employer. Leave of up to two years, continuous or intermittent, may be granted for significant, verified family reasons.
Italy’s Maternity/Paternity Leave
Female employees are eligible for maternity leave for two months prior to the expected date of childbirth and three months afterward. During maternity leave, a daily allowance equivalent to 80% of the previous salary earned through the social security system is awarded (INPS).
The father is entitled to one day of paid paternity leave, but the woman may transfer two of her days to the father for a total of three days’ leave.
National health insurance in Italy is administered by the National Health Service (SSN) and financed by both direct and indirect employer and employee taxes. A social security number and a health card are issued upon enrolling with the Local Health Service. The health card entitles low-cost or free medical care.
There is also private health insurance coverage accessible. Individuals with private insurance can freely select their own doctor and specialist; receive care at private hospitals, etc. Numerous residents have private health insurance that covers the percentage of medical expenses not covered by social security.
Italy Additional Benefits
Some businesses offer allowances for company automobiles, mobile phones, and food coupons. Frequently, high-tech companies offer training.
In Italy, it is typical to receive a 13th month or annual bonus (tredicesima mensilita) immediately before Christmas. Some of the larger corporations additionally provide their staff the 14th month of salary in the summer (quattordicesima mensilita).
Termination and severance
In Italy, an employee may only be terminated for a valid and serious reason. Italian courts define just cause for termination as any major infraction, such as stealing. Employers may terminate employees on justified grounds for less serious violations, such as unexcused or repeated absences from work, if they can objectively demonstrate the business necessity for termination or for so-called subjective reasons, such as a breach of contractual obligations or negligence.
Unjustified termination is deemed abusive treatment, and the employee may be awarded up to three years’ salary in damages.
In Italy, all employees are entitled to severance pay, including those who quit or are fired for reasonable cause. Employers are required to set aside a monthly salary amount for severance pay.
As your official employer in Italy, we can work with you to swiftly handle the unanticipated termination of an employee, giving legal counsel and a customized procedure to keep you out of labor court.
Paying Taxes in Italy
Italy’s income tax is progressive, meaning that the higher the income, the higher the tax rate. Individual tax rates ranged between 23 and 43 percent.
There are varied social security contribution rates dependent on the industry sector and management level, but the usual employee contribution is 10 percent of gross compensation, and the employer contribution is roughly 35 percent of the employee’s salary.
It will take a significant amount of time, money, and effort to establish a branch office or a subsidiary in Italy in order to employ a small workforce. Strong protections for workers are provided by Italian labor law, which calls for careful attention to detail and an awareness of the most effective procedures in the local community. Acvian simplifies the process of expanding into Italy quickly, straightforwardly, and simply. Without the difficulty of establishing a foreign branch office or subsidiary, we are able to assist you in hiring the candidate of your choice, managing HR-related issues and payroll, and ensuring that your business is in conformity with local legislation. Our Italy PEO and Global Employer of Record approach will give you peace of mind, allowing you to concentrate on running your business while we handle employee matters.