Employer of Record Italy
Infotree Global Solutions assists organizations planning for expansion in Italy by providing employer of record services in Italy. If you wish to recruit professionals in Italy, you can easily accomplish it with us without even having an establishment in Italy. Our team of dedicated professionals would take up all the recruitment and payroll management responsibilities for your organization. From searching for ideal employees to hiring and onboarding them, we take every step on your behalf in total compliance.
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Hiring in Italy
The hiring process in Italy is straightforward. Once the recruiting needs are found out and the job details are out, employers can use an internal team or partner firm to find the right fit for the role. Professional apps like LinkedIn and other job portals can be used to access suitable candidates. Italy Employer of Record can help in this matter.
No matter whether you are hiring yourself or through an Employer of Record, you need to abide by the legal obligations. Italy follows a procedure for hiring. First of all, candidates fulfilling the criteria are selected for background screening. Once it is done, a few candidates are shortlisted and are interviewed through technical and HR rounds to better analyze their suitability for the job. After the final analysis, the suitable candidates are selected and provided with an employment letter. At last, negotiation is done on job terms and candidates become the rightful employees and ready for onboarding.
Hiring through a job website, social media platforms or job advertisements in Italy has its benefits, like the availability of thousands of prospective candidates where you can find the right match because there is never a lack of talents in the job pool.
On the other side, firms may need to follow a challenging process of initial screening, shortlisting applications to select the most suitable candidate. However, LinkedIn and Monster are still very popular apps in Italy and they cannot be the only platform to find talent, especially if you need candidates with specialized skills. Hiring talented employees quickly is a daunting task. Partnering with a professional Employer of Record in Italy comes as the best option. It enables your firm to save time and focus on other most important aspects of expansion. The Employer of Record Italy manages all the legal and compliance issues while enabling you to hire faster using their knowledge of best employment practices and the right tools for virtual onboarding.
If you plan to establish a subsidiary in Italy, there are a few factors to consider. Most important are the Business factors that make you aware of the employment contracts that should meet the local standards besides having professionally drafted. It should mention the industry and business type, nationality, and presence of trade agreements or business relationships. An Employer of Record can help you sail through the business expansion challenges smoothly. Besides helping in rapid hiring, an EOR assists in various other HR activities like management of payroll, time, expanse, tax filing, and security. Hence, you get an affordable and seamless experience. Some information that must be maintained in the contract is provided below:
Working hours – There is no specific cap on daily working hours in Italy. However, employees are given a daily rest period of 11 consecutive hours after every 24 hours. This effectively restricts the daily work hours. Working hours in Italy are 8 hours per day which is a minimum of 40 hours per week. It may exceed up to 80 hours per week including overtime. Employees are given 24 consecutive hours of rest every week. Minors are assured of two days’ rest every week. An employee who’s with working hours exceeding 6 hours per day is eligible for a rest break. Usually, CBAs regulate overtime and rest breaks but without CBA applicability, a rest break should not be less than 10 minutes. With CBA regulation, overtime must be mutually decided between the parties, however, it cannot exceed 250 hours every year. It should be compensated with an enhanced salary. Being your Employer of Record, we help you with accurate insight.
Compensation – While negotiating the salary for your Italian employees, you need to understand several factors. Italian law does not indicate a minimum wage because wage requirements are decided by collective labor agreements. For employees who need to work beyond the standard limit of a 40-hour workweek, overtime pay is given which is usually 10% above the regular pay. As your Employer of Record, we can assist you with clear insights about employee compensation, so that you can come up with a competitive employment offer.
Bonus – In Italy, employees are entitled to have 13th and sometimes, 14th-month bonus payments. A 13th month or annual bonus is paid just before Christmas. Bigger companies also offer employees the 14th month of pay, paid in the summer.
Probationary Period – Probationary periods are permitted in Italy, which include three months for employees. These are restricted to up to six months for executives and high-level employees.
Termination and Severance – An employee in Italy can be terminated only for a serious and real cause. Italian courts define theft as a serious breach by an employee. However, employers can terminate workers on justified grounds like repeated or unexcused absences from work. The employer can prove the business needs for termination including negligence or a breach of contractual obligations.
In Italy, every work is eligible for severance pay, during a resignation or a termination. Employers must keep aside a particular amount of salary every month to cover employee severance. By being your Employer of Record in Italy, we can help you quickly handle the unpredictable event of employee termination, offering legal guidance that ensures you face no legal hassles.
Compensation and benefits are two of the most critical parts of any contract or offer letter negotiation. In Italy, while negotiating the terms of a contract with employees, you need to pay even closer attention to compensation and benefits laws to make sure you meet the statutory minimums. Below are some of the statutory benefits outlined in a collective bargaining agreement (CBA). Infotree Global as your Italy employer of record can support you with your organization’s benefits strategy and help your company succeed.
Maternity leave – Employees in Italy are entitled to five months of maternity leave. During this period, mothers are eligible to have 80% of their regular salary from the social security system.
Vacation – Employees here are provided with four weeks of paid annual leave that includes two weeks of consecutive leave if an employee requests for the same. Two weeks’ leave is granted during the year they are earned. However, the remaining two weeks may be availed for up to 18 months. However, employees cannot take pay rather than annual leave only when the employment relationship is terminated. According to the CBA, employees are entitled to have 25 days’ vacation plus 32 hours of paid leave.
Sick Leave – Collective labor agreements regulate employee entitlement to sick leave and they are provided with full pay during sick. It is paid by the employer and the National Social Security Institute. According to Italy’s labor law, employees can have paid leave of 3 working days every year in serious illness or death of a spouse or second-degree relative. In severe illness, arrangements may be determined with the employer. For second-degree or serious and documented family reasons, continuous or discontinuous leave up to 2 years may be granted.
Health benefits – In Italy, healthcare is an assured benefit paid by employer and employee taxes. The national health service program is handled by the Servizio Sanitario Nazionale (SSN), which provides universal coverage to country nationals with public healthcare mostly free of cost. As your Employer of Record, we may help you provide optional supplementary health benefits for professionals and their dependents at a cost-effective rate.
Pension – The social security system in Italy includes a range of benefits that include pensions for employees.
Other Benefits – Besides pension, additional benefits like sick leave, maternity, paternity, and parental leave are included in the social security system. It also covers workers’ salaries, unemployment, and disability benefits. Employer social costs will include a big portion of employee benefits in the county, however, we as your Italy Employer of Record can advise you about supplemental coverage options like extra pension contributions or life insurance, if required.
Payroll and Tax in Italy
The payroll and tax in the country vary from other European countries, leading to a challenging regulatory environment. At Infotree Global, we can help you administer a compliant and accurate payroll by being your Employer of Record in Italy. We have a sound understanding of regulations that are required for payroll processing. The official currency is the euro (EUR) in Italy.
There is no mandate frequency for wage payments in the county. These payments must be followed by a payslip that categorizes deductions. Employers are free to pay by check or can directly deposit into a bank account.
Income Tax – Corporate firms in Italy are subject to an income tax of 24% and 3.9% of a regional production tax. Non-operating firms are subject to a 34.5% corporate tax rate. Usually, employee income tax in Italy is determined on a progressive scale, with charges varying from 23% to 43% based on annual income. Current tax brackets encompass:
|Up to €15,000||23%|
|€15,001 – €28,000||27%|
|€28,001 – €55,000||38%|
|€55,001 – €75,000||41%|
Regions and municipalities collect extra income tax of up to 2.03% for localities and up to 0.9% for municipalities. Italian payroll needs all employment payments, tax, and social security contributions to be documented early as the Certification Unica die Redditi (CUD). By Feb last year, employers are required to provide all employees with two original CUD documents for the earlier reporting year. Every year, the Ministry of Finance releases a new model of CUD and introduces new tax provisions. Therefore, you should consider hiring the best Employer of Record in Italy to assist you with the same.
Social Taxes – Employees and employers contribute to the social security system, which funds social programs such as pensions; disability; benefits for sick leave, maternity and parental leave; workers’ compensation; and unemployment benefits. The National Health Service is financed separately through general taxation. Usually, employers may contribute 35% of gross earnings and the contribution rates may differ by employment category. However, the common rate is 10% of gross earnings.
Contribution rates for social taxes encompass:
|Pension, Disability and Survivors Benefits||19% for employees; 23.81% for employers|
|Sick Leave||2.22% to 2.44% for employers, No employee contribution|
|Maternity Leave||0.46% to 0.24% for employers, No employee contribution|
|Workers’ Compensation||0.04% to 1.3% for employers, according to an identified degree of risk, No employee contribution|
|Unemployment||No employee contribution, 1.61% for employers|
|Family Allowances||No employee contribution, 0.68% for employers|
In addition to that, executives and their employers may contribute to supplementary pension funds and other health care funds. These supplementary funds come with their own deadlines for payment of contributions.
Employment Laws in Italy
In Italy, there is no mandate central employment law, however, employee rights are taken care of in the Italian Constitution and the Civil Code. Besides, and various other laws govern the nature of job and employment relationships. Collective labor agreements are there to protect Italian employees and they provide greater benefits than the Italian labor laws. CBAs or Collective Bargaining Agreements are made between trade unions and employers’ associations, and these are common in all sectors. National CBAs are only applicable for a company if it is a member of the relevant employers’ association. For non-member companies, rules agreed to via CBA are not agreed upon. However, the agreement is applicable if a reference is mentioned in the employment contract.
Due to the complexity of Italian employment laws, it is essential to have compliant employment contracts. As your Italy Employer of Record, we ensure legal contracts meet all the compliance requisites. We can guide you to stay updated about cultural norms and employment regulations.
Challenges When Expanding into Italy
The labor market in Italy is strictly regulated and favors employee rights, which is why it becomes tricky to navigate. With many legislative requisites for employers to follow, the expansion may take longer time than you think. However, hiring a professional Employer of Record Italy can bring you fewer worries due to the accurate understanding of the legal and compliance requirements.
Customs are more favorable to employees that prevail over legal provisions, but not for any kind of individual employment agreements. Italy’s regulatory environment is a little complex and at times it lags the transparency, efficiency, and clarity found in other developed economies. Products involving health, safety, or any other environmental concerns need to be highly regulated. Sometimes, Italian laws may ask beyond the basic EU requirements. In a few parts of the country, the digitalization rate is still low, which may create hassles for a small size company, looking for expansion. We as your Italy Employer of Record can help you deal with the norms and regulations such as National Collective Bargaining Agreements while expanding into Italy.
Benefits of Employer of Record Italy
To simplify your expansion process let Infotree Global assist you to deal with all the complexities. Be it hiring employees or distributing payroll or taking care of expenses, we are there to assist you at every step. Partner with us and start your global business without worries.
Market Access -Relying on the professional expertise of an Employer of Record is the best way to enter an unknown market quickly. By using EOR services, an international organization can avail the expertise of an Italian employee to work for its company. Besides quick access to the Chinese market, the EOR also enables the client to ease off worries related to payroll and HR.
In Country Laws – It is hard to ignore the importance of regulations and compliance in a foreign country. If you are operating a business in Italy, you need to be well aware of the payroll and taxation rules. With Employer of Record services, a company can hire a foreign individual or local employees and deal with the complexities of the country’s rules. Be it income tax, social security contribution, expanse management, withholding charges, or business tax, an EOR company takes care of it all with total compliance.
Diverse Solutions – No matter whether you already have a company in an international location or you are going to establish the one, an employer of record can help you significantly. The EOR Company can hire staff on your behalf without having the need of setting up a branch in Italy. If your firm is already operating, using EOR for managing payroll tasks can be a great idea as they can present an effective solution to tax and accounting responsibilities in the country.
Why Infotree Global Solutions?
Infotree Global is dedicated to providing professional assistance to help you set up business in Italy. We provide the support of our in-country team of professionals to undertake all the legal formalities associated with employment in Italy and help you stay compliant with country labor laws. Owing to our rich industry experience, we help you hire the most talented individuals for your company and embrace all the payroll-related jobs. Thus, we help you save time without worrying about legal hassles so that you can stay focused on your expansion endeavors. With our global payroll and employer of record solutions, you can experience professional assistance at every step and expand your business without worrying about legal complexities.
Make the most of our professional services and overcome the challenges associated with international hiring. If you want to partner with our Italy Employer of Record and need assistance, connect with us!