Employment and Payroll Services

Our team of qualified lawyers and labor consultants regularly assist clients in relation to employment contracts, intra-company transfers in Italy and payroll.

Employment contracts

Employment contracts (contratto di lavoro) are required by law for each member of staff employed. The two main types are temporary employment contract (contratto a termine and contratto a tempo determinato) and permanent employment contract (contratto a tempo indeterminato), and they contain a set of legal clauses both for the employer and employee.

Typically employment contracts detail the specific aspects and expectations of the working relationship between employer and employee but they all generally include job title, salary, responsibilities and duties, entitlement to sick pay and holidays, and applicable probationary and notice periods.

Our services include:
  • Reviewing employment offers
  • Drafting employment contracts
  • Reviewing employment contracts


Italy’s “Jobs Act”

In the last 15 years as a result of several reforms, regulation of the Italian labor market has undergone a substantial overhaul, the latest of which is the “Jobs Act” approved by the Renzi Government in December 2014 which introduced four key initiatives:

  • a new form of permanent employment contract with increasing protection related to the tenure (‘contratto a tutele crescenti’);
  • reshaping of temporary contracts;
  • new rules on dismissals with more flexible;
  • and the redesigning of unemployment benefits.

The “Jobs Act” is a comprehensive reform package, which includes:

  • relaxed employment protection legislation on employment contracts, by linking the level of protection with tenure;
  • a simplified and organic regulation of certain types of contracts and employment relationships, including a more flexible regulation of employee’s duties and tasks, in order to meet temporary and permanent employers’ needs, and the introduction of new rules on distance control of plants and working places;
  • a new unemployment benefit scheme, with more stringent requirements in order to activate benefits;
  • a renewed active labor market policy system, through more effective employment incentives and improved employment services, to enhance demand and labor supply matching;
  • a revision of wage supplement scheme for redundant workers;
  • the establishment of a single inspection agency to coordinate activity and avoid multiple controls in the same plant.

Additional provisions were adopted in the 2015 Stability Law, which provides a three year cut in employers’ social contributions (up to € 8,060 a year), and removes the costs of the local tax surcharge (IRAP) for newly hired permanent workers.


Start of employment

Employment contracts are governed by the general rules set out in the Civil Code.

Given the existence of a large number of NCAs and their extensive use by the employers, employment agreements in Italy normally consist of simple hiring letters which refer to the items required by the law eqincluding, the identity of the parties, place of work, employment start date, trial period (if any), duration of the employment (in case of fixed-term employment) and enrollment, employee’s duties) and to the provisions contained in the applicable NCAs.

Individual employment contracts also specify the employee’s «category» as established by the Civil Code. under article 2095.

There are four categories of employees:

  • Executives («Dirigenti»);
  • Middle managers («Quadri»);
  • White collar employees («Impiegati»);
  • Blue collar employees («Operai»).

Despite the fact that national collective agreements normally define general principles that regulate the employment relationship of Dirigenti, general and specific conditions are often negotiated through individual agreements. Quadri are defined as employees who, while not top executives, are continuously engaged in duties that contribute significantly to promoting the company’s growth and achieving its goals. According to a limited number of collective agreements, employers are required to insure quadri against claims for civil liability brought by third parties as a result of negligence in their duties.

At the start of the employment relationship, the employer must inform the employee of the main terms and conditions of his/her contract.

Italian law does not prescribe any particular form for em- ployment contracts generally; they may be communicated orally, although most contracts are evidenced in writing. That said, some specific provisions as well as specific information concerning the employment relationship are required by law to be written down (for example: trial period, non-compete clause, fixed-term, if any).

Also, certain types of contracts are required by law to be in writing (for example: part-time contracts).

Employment contracts can be made in any language, provided that both parties are able to fully understand the content of any provision therein.

The age of majority is 18 years old in Italy. The minimum age required for validly entering into an employment relationship is 16 years old with the parents’ consent (15 years old for apprenticeships contracts).


Employment relationship

Formal Fulfillment

At the establishment of any employment relationship, the employer must notify the competent public employment service («Centro per l’Impiego») at least 24 hours prior to commencement. This notification also fulfills the obligation to notify the relevant social security institutions (i.e. INPS and INAIL).

If provided for by law, an employer must also stipulate insurance policies against risks and damage suffered by third parties caused by employees fulfilling their employment duties.

Trial period

The statutory trial periods are the following:

  • 3 months, for employees not assigned to managing functions;
  • 6 months, for all other employees.

However, the probation period is commonly set in the relevant NCAs depending on the category of the employee.

During the trial period, either party may freely terminate the working relationship at any time, without any notice, obligation or payment of the relevant indemnity in lieu.


Italian law does not give a statutory definition of «wages» and «salary».

For income tax and social security purposes, any compensation granted to the employee within the scope of the employment relationship, including compensation in kind, is considered wages (this does not include a few limited exceptions, such as expenses reimbursement).

There is no statutory minimum wage in Italy. Minimum wages for each contractual level are usually set out by sector in the relevant national collective agreements (NCAs). A minimum wage is being introduced for workers not currently covered by NCAs, although they account for less than 3% of the total workforce.

There are no statutory bonuses. NCAs may provide for some such as the collective performance bonus («premi di risultato») or individual performance bonuses.

There are no statutory allowances, although NCAs provide for transportation allowances or indemnities for certain working arrangements such as on-call work.

Under Italian law, compensation is granted in thirteen (13) monthly installments. The additional 13th install- ment («tredicesima») is paid out each year along with the December salary.

Some NCAs provide for a 14th monthly installment, normally paid in June.

The NCAs also normally set the payment date and the calculation basis of the contractual items (e.g. notice period, compensation during illness).

Employers frequently grant certain employees with fringe benefits (for example: a company car and mobile phone to top/middle management and sales positions, luncheon vouchers and internal or external training and education). Employers are required to fund severance payments for all employees («Trattamento di Fine Rapporto – TFR»), amounting to 1/13.5 of the annual overall compensation, payable on termination of employment for any reason.

Executives are not subject to the rules governing working hours. Some NCAs provide for a working week of less than 40 hours. Employees must be granted at least one weekly rest day (normally Sunday).

Exceptional and temporary business activities may need employees working on weekly rest days or legal holidays.

Overtime work is considered to be the hours worked exceed- ing the 40 hours per week and may not exceed

8 hours on a weekly basis and 250 hours on a yearly basis. NCAs set specific additional rates to be applied overtime work, and can also replace overpay with additional rest days.


Holidays and Vacations A local saint’s day (variable on the local tradition of each city) is also considered a public holiday for the relevant territory.Public holidays that fall on the weekend do not entitle absence from work on the nearest weekday, but employees are entitled to their normal pay.Statutory annual vacations amount to 4 weeks.The employer normally decides when workers can take vacation based on company and production interests and taking into account (where possible) employees’ needs. NCAs normally provide for, in addition to the statutory minimum, a further period of paid vacation that it is increased with seniority service.

The law states that at least two weeks have to be taken in the same year. Up to two weeks of unused vacation may be postponed, but it must be taken within 18 months following the accrual year.

Employees are entitled to pay in lieu of unused vacation upon employment termination.

Sick leave Employees are entitled to 3 days’ paid sick leave charged to the employer.Pay replacement benefits are provided by social security institute from the 4th day of illness to the 180th day. Certain NCAs require employers to top up social security benefits to 100% of salary.During sickness, the contract is suspended and the em- ployees’ seniority is protected.Employees cannot be dismissed before the end of a minimum period prescribed by the applicable collective agreement. After that period, an employer may terminate the contract.
Maternity leave Pregnant female employees are entitled to 5 months’ maternity leave, from the second month prior to the due date to the third month after birth.The last 3 months can be extended to 7 months in specific cases.Pay replacement benefits are provided by social security. Any work that might be considered harmful is forbidden during pregnancy.During maternity leave the employment is suspended and seniority is protected.
Non competition agreements According to Article 2125 of the Civil Code, written non-compete covenants are allowed provided that:

  • adequate compensation is granted to the employee;
  • duration of the agreement does not exceed 3 years for normal employees and 5 years for executives; and
  • it is circumscribed from a business and territorial standpoint.

Italian law does not provide specific criteria with regard to identifying adequate compensation and the scope of activity or territory.

Therefore, in case of disputes, such criteria are determined by the Court on a case by case basis.

Temporary lay-off In the event of a temporary crisis, the employer may use the «redundancy fund» («Cassa Integrazione Guadagni», CIG) which is a collective suspension from work of the blue and/or white collar employees, allowing the latter to continue receiving up to 80% of the normal wage charged on a special fund held by the social security institute.

Employment of foreign workers

According to the principle of free movement of persons, goods, services and capital, EU (European Union) and EEA (European Economic Area) nationals can be employed in Italy without any authorization by the Italian authorities.

Should an EU national choose to work in Italy for a period in excess of 3 months, he/she should apply for a so called «Stay card» («Carta di Soggiorno»), which is normally issued by the local State Police office («Questura») upon a simple request. This permit is renewable.

Swiss citizens have the same right of entry, residence and access to work applicable as EU countries nationals.

Non EU/EEA Nationals / The “Quota” system

The admission of non-EU foreign workers is subject to a mechanism of quantitative selectivity based on quotas for new entries on a yearly basis.

They are meant to regulate the admission of third country nationals and their access to Italian labor market, by combining a purely quantitative selectivity with some elements of qualitative selectivity.

The determination of annual quotas of new inflows is established by the government, which sets the quota through a Prime Minister Decree (known as «Decreto Flussi»). The quota decree is published in the Official Journal and starts some days after the implementation phase.

The whole implementation process of the quota system is basically made up of three main steps:

  • Authorization requests presented by employers to the Immigration Single Desk (ISD);
  • Visa request by prospective migrants in their country of origin;
  • Request and delivery of the stay permit for working purposes.


Authorization (Nulla Osta) Request Employers have to request authorization to hire a foreign worker living abroad to the ISD.In the application file the applicant employer is expected to submit a so called «Stay contract» («Contratto di soggiorno») in which she/he commits him/herself to guarantee adequate lodging for the requested worker and to fund travel costs for his/her repatriation in case of expulsion before the expiry of the contract.In addition, the contract has to include the work contract’s details that must comply with existing collective contracts for the specific sector/occupation in which the requested worker will be employed.Once all the checks have been made by both Labor authority («Direzione Territoriale del Lavoro») and local State Police office («Questura»), the authorization («nulla osta»), may be delivered to the applicant employer.

The whole procedure should take 40 days from the application.

VISA issuance Once the nulla osta is delivered to the employer, he/she sends it on to the individual foreign worker to be recruited who must present him/herself at the Italian diplomatic representation in his/her country of origin, and requests a visa for working purposes.The nulla osta will have a 6 month validity, and during this period the visa may be issued.
Stay Permit (Permesso di Soggiorno) issuance Within eight days of his/her arrival, the foreign worker must sign the stay contract presented by the employerat the ISD and simultaneously apply for the stay permit («Permesso di soggiorno») for working purposes. The stay permit will be issued by the Questura.The stay permit has the same duration as the employment contract with a maximum of 2 years and it is renewable.
Exemptions – Extra Quotas Admissions The admission of some categories of workers is explicitly exempt from the quantitative limits set through the quota system.In particular, specific professional profiles can be admitted without any quantitative cap to regulate their inflow (for example: managers or highly skilled staff members of multinational/foreign companies, university lecturers and professors, translators and interpreters, professional nurses, etc.).Despite the lack of explicit quantitative limitations, the admission of workers in these categories is still subject to the authorization («nulla osta») granted by the territorial ISD, even if admission procedure have been further simplified for specific categories.Stay permits have a maximum duration of two years, in case of fixed term contracts, or unlimited duration in case of open-ended contracts.

Types of Contract


Part-time contract Part-time employment contracts must be in writing and specify the hours of work (e.g. by day, week, month and year).Pay and other entitlements of part-time employees are normally pro-rated to those applicable to full-timers in the same job entitlement.Ancillary clauses to part-time contract can be added, which allow employer a wider flexibility:

  • «elastic clauses» (clausole elastiche) which permit an employer to increase working time;
  • «flexible clauses» (clausole flessibili) which permit an employer to vary working hours during the day.
Fixed term contract Companies can hire employees on a fixed-term contract for arrangements limited by time.Fixed-term contracts can last up to 36 months, including any extension.Quantitative limits are normally set by the NCAs; alternatively, the law states that the overall number of fixed-term contracts may not exceed the 20% threshold of the work- force hired on permanent basis.Fixed-term contracts cannot be used to replace workers in strike or to replace employees temporarily laid-off or involved in collective dismissals in the past few months.
“On call” Jobs (Lavoro a chiamata o intermittente) On call” job contracts provide that an employee declares his/her availability to work over a certain period of time, during which he/she can be called in even for a few days only with short-term notice.The individual contract may provide that the employee is bound to work if called by the employer. In this case, in addition to the normal remuneration paid for the working activity currently carried out, the employee is eligible to an additional 20% of the wage set by the NCAs. This contract must be drafted in writing.
Apprenticeship (Apprendistato) Apprenticeship is an open end contract with a vocational training content.The employer can hire apprentices within certain quantitative thresholds depending on the number of employees hired and is required to ensure that the apprentice acquires professional skills and qualification.
Temporary Agencies Contracts (Contratto di somministrazione di lavoro) Temporary contracts, on fixed-term or open end basis, can only be agreed with qualified employment agencies. Workers must benefit from the same legal and economic conditions available to employees of the user company. Employers may not use staff supply contracts to replace workers on strikeor to replace employees temporarily laid-off or involved in collective dismissals in the previous few months.


Intra Company Transfers

In an Intra-Company Transfer a foreign employee is transferred by its employer to work for the Company’s subsidiary office in Italy. This is mainly used by international businesses when bringing in more specialist workers from overseas.

The process for transferring an employee within the company is complex. Much of the responsibility of the application is upon the employer. The Intra-Company Transfer work permit for the employee is called a Nulla Osta al Lavoro in Italy. However, to apply for this a secondary application (Sportello Unico d’Immigrazione) must be authorized and submitted by the employer to the local Italian Labour Office.

Once the work permit has been successfully approved and completed it is valid for two years. The employee is then required to apply for a further permit, sanctioning their residence in Italy for this period of time.

It is advisable to gain the advice and support of a specialist when navigating the applications for Italian visas and permits. We are experienced with the procedures involved and will expertly guide you through the process as well as organize the paperwork for you so that your application is completed efficiently.

Please do not hesitate to contact us for more information about intra company transfers services.



A payroll is required if your business employs staff. The employer is required to maintain a payroll to manage the salary, tax deductions, and social security payments for the each employee. Additional employer contributions to employee pension schemes and social security are legally compulsory.

The amount of administration involved in organizing your company’s payroll is relatively complex. Our payroll services will manage all of this on your behalf and are designed to exclusively address your company requirements. Our full range of payroll services is detailed below:

  • Social security registration and updates where required
  • Completion of social security forms
  • Calculation of employee and social security payments
  • Handling social security e-payments
  • Estimation of the cost of the employee
  • Monthly employee payroll statement
  • Administration of Withholding Tax

Please do not hesitate to contact us for more information about our payroll services.


Social Security System

The social security system provides retirement, survivor and disability pensions, as well as healthcare, unemploy- ment benefits and family allowances.

Benefit amount is generally based on accrued social securi- ty contributions and length of service.

All employees and wage earners, including executives, project-work and self-employed workers are obliged to take part in the Italian social security scheme.

Social security contributions are paid to Italian social security administration (so called «INPS»). Employees can join some pension funds (provided by NCAs) to increase social security benefits.

The national work accident insurance institute (so called «INAIL») covers almost all employees for accidents at workplace and occupational diseases.

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