One of the most common requirements for employment around the world is having a detailed written agreement between employers and employees. In Italy, these employment contracts have to abide by several regulations, guidelines, and best practices to be deemed complete and binding.
This guide will help you draft compliant and comprehensive employment contracts for employees in Italy. It will include common terms, standard working hours, flexible work arrangements, termination conditions, post-employment restraints, and other regulatory considerations.
A company’s internal policies can be included in the employment contract in Italy. While not mandatory, having these policies outlined in the written agreement can be valuable in enforcing them. Clauses that discuss behaviour, disciplinary outcomes, and grievance proceedings are some of the most common examples of these policies.
According to both national collective bargaining agreements and Legislative Decree No. 104/2022, which outlines rules that grant predictable and transparent working conditions, employment contracts are required between employers and employees. In fact, several company policies such as non-competition or non-solicitation rules may not be enforceable unless they are explicitly stated in written agreements.
Written employment agreements in Italy typically include the names and contact information of both employee and employer, the position and its corresponding details of the duties and responsibilities, a breakdown of the entire compensation package, the work schedule with the hours, days, and weeks outlined, termination conditions, and, if applicable, post-separation restraints.
The country allows for probationary periods to be followed as long as they are included in the employment contract. That said, statutory limits mandated by applicable collective bargaining agreements also govern these clauses. For “dirigenti” or executives, for example, probationary periods cannot exceed a duration of six months.
Third-party approval regulations for employment contracts in Italy
When it comes to employment contracts in the country, there is currently no need to have them approved by any third party. However, employers are generally expected to report the terms of the agreement to certain government entities.
Using the “UniLav” online form, employers should submit the terms and conditions of a new employee’s contract to the National Social Security Institute, the National Institute for Insurance against Accidents at Work, and the Labor Inspectorate of the newly established work relationship. Fines may be levied on companies that fail to comply before the start date of an employee.
Employment rules, especially those prescribed by employment regulations and applicable national collective bargaining agreements are generally mandatory and cannot be changed by either the employer or the employee. The only exception is when these provisional changes will result in a more beneficial position for the employee.
Aside from the terms outlined in employment contracts, employees are also afforded certain protections by law. These protections are implied and need not be spelled out in the written agreements.
Italy’s anti-discrimination regulations can be considered as an implied term in employment contracts. Although it may not be stated in the written agreement, employees can still expect to be covered by these laws, and they can seek reparations should relevant rights be violated.
In terms of amending employment terms, there is no law that prohibits employers to unilaterally change an employee’s position or role as long as the adjustment will not affect the current level or category of classification of that employee.
In Italy, some employment contracts, specifically those with set completion dates, can be extended provided that certain conditions are met.
Fixed-term contracts in Italy can be extended up to five times following the initial 12-month period, allowing for an additional 24 months, for a total maximum duration of 36 months.
These extensions are permitted only if outlined by the applicable national collective bargaining agreements or if there is a productive, technical, or organisational need agreed upon by all parties, including instances of employee replacement.
There are no restrictions on the number of times a company can renew or extend a contract for independent contractors in Italy, as long as the contractor is not classified as an employee by the relevant authorities.
Extensions of apprenticeship contracts may be allowed in specific cases. For instance, if the apprentice has not completed the required training or has not reached the necessary competency levels, the apprenticeship may be extended for a maximum period that ensures the apprentice gains the requisite skills.
The conditions for such extensions must comply with the terms established by national collective bargaining agreements.
There are several types of employment contracts in Italy based on the duration of the employer-employee relationship or the agreed upon work hours. Here are the most common ones:
With a standard or open-ended employment contract, the duration of employment is not limited by a set date. This means that as long as both the employer and employee agree to the conditions of the contract, the relationship can continue. This is generally the more common form of employment in Italy.
Individuals who have open-ended contracts with their employers are considered permanent employees. They generally enjoy a higher level of job security, as well as several labour protections such as notice periods and severance pay if their employment is terminated.
These written agreements cover employees who work only a limited number of hours per week. Part-time contracts generally specify how many hours employees are expected to render their services. Entitlements like pay and leave credits are typically pro-rated but similar to full-time employees with comparable positions.
In some cases, the following ancillary clauses that provide employers with more flexibility are added to part-time contracts:
Individuals who have on-call arrangements with employers (lavaro a chiamata o intermittente) usually have a set schedule wherein they can be called upon to work, even on short-notice. These schedules are set by the employee and agreed upon by the employer.
In these cases, employees are entitled to the corresponding normal remuneration based on the work activity or services rendered. There may also be relevant national collective bargaining agreements which entitles on-call workers to an additional 20% on top of their pay.
Unlike those with standard or open-ended agreements, employees who have fixed-term contracts with their employers have a set date by which their employment will end.
All in all, the maximum duration for fixed-term contracts cannot exceed a total of 36 months. However, not all fixed-term contracts may be eligible to reach that length.
Here are some of the conditions and points to remember when determining the length of a fixed-term employment agreement in Italy:
Aside from the duration of fixed-term contracts, the following are additional details employers should be aware of:
For the most part, employees under a fixed-term contract are also entitled to the same benefits as regular or permanent employees. This includes benefits such as paid time off or leave credits, health insurance, and severance pay if the employer decides to end their employment ahead of the set end date.
A fixed-term contract can be terminated under specific conditions, including the following:
Employees also have the right to resign from a fixed-term contract before its expiration. In these cases, the employee typically provides notice in accordance with what was stipulated in the contract, with statutory provisions, or with national collective bargaining agreements applicable in the sector.
Aligned with most countries in the European Union, Italy’s labour laws have a prescribed structure for working hours that takes into consideration both productivity and the well-being of employees.
As outlined in Article 1 of Legislative Decree No. 66/2003, the standard working hours per week in the country is 40 hours. Divided into five days, this amounts to eight hours per workday. Employees should also have at least 11 hours of rest in between workdays.
In some cases, relevant national collective bargaining agreements can set lower working hours within their covered industries. The logistics sector, for example, has a collective agreement in place that states a standard of just 39 working hours per week.
The standard work week in Italy is from Monday to Friday.
Employees can work overtime, but they must rest for at least 11 hours between shifts and cannot work more than 48 hours in a week. In the course of a year, an employee also cannot have more than 250 hours of overtime.
According to Act No. 196/1997, there are also conditions that have to be met for employers to be able to request overtime work from their employees. One of the most common situations where employers can request overtime is when there is an exceptional production or technical need that cannot be met with the addition of new staff. This prevents employers from neglecting proper workforce planning and allocation in favor of overtime.
The law mandates a higher compensation rate for overtime work. This is usually calculated as an additional 10% on top of an employee’s total hourly rate. This means that when all the allowances and bonuses are taken into account, the rate can go as high as 30%. Some collective bargaining agreements may set higher overtime rates for their respective sectors.
As remote work gained popularity globally, Italy also passed laws to help adopt and regulate this flexible work arrangement. Particularly, the Smart Working Regulation, or Legislative Decree No. 81/2017, together with the Agile Work Regulation of 2020, help guide companies with their respective remote work policies.
The Smart Working Regulation outlines a framework for employees to be able to split their time working between the office and any remote location. It also grants individual employees the right to request tailored arrangements, given that some limitations are followed.
The Agile Work Regulation took remote work policy a step further by making the process to request for such arrangements easier and more accessible to more employees. Failure to meet remote work obligations by employers can result in fines from EUR 100 to EUR 500 for each employee.
Remote work employees in Italy are also entitled to the same welfare incentives and insurance protections as those who report to the office regularly.
While employers are not required to provide their employees with the equipment needed to perform their work remotely in Italy, it is generally recommended to do so. Aside from being able to better manage data security, it also helps guarantee ease of access for employees.
Aside from equipment, it is also typically in the best interest of the employer to provide their remote workers with the necessary training to adeptly use digital communication and collaboration tools. Employees may also benefit from time management and cybersecurity upskilling.
Moreover, there is also value in establishing clear performance metrics and monitoring progress through regular check-ins, making sure all remote employees are productive and engaged.
Italy also provides non-EU citizens the opportunity to work remotely while residing in the country through the digital nomad/remote worker visa.
This visa is available to highly specialised professionals, as defined by article 27-quater of Legislative Decree n. 286/1998, which includes those with post-secondary degrees or at least three years of professional experience.
The visa is divided into two categories: freelancers and consultants classified as digital nomads, and remote workers who are employed by a company but can work entirely remotely.
Like all countries, Italy has its own rules and regulations when it comes to employment contracts — and non-compliance could land your company in hot water.
Thankfully, our team is experienced in drawing up tailored, compliant contracts in Italy (and more than 100 countries worldwide). That means that, when you work with us, you won’t need to waste time worrying about whether you’ve got it right. Instead, you can focus on what matters: growing your business.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
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