Hiring employees in Italy can be a valuable move for global companies seeking access to a well-educated and skilled workforce in the European Union. However, understanding and complying with Labour Laws in Italy is crucial to ensure lawful employment, avoid penalties, and foster a productive work environment. This guide provides a complete breakdown of Italy’s employment legislation, including contract types, working hours, wages, benefits, terminations, and how an Employer of Record (EOR) can support your expansion.
Table of Contents
- Overview of Labour Laws in Italy
- Employment Contracts in Italy
- Working Hours and Overtime Rules
- Minimum Wage and Salary Regulations
- Social Security and Payroll Contributions
- Leave Entitlements and Public Holidays
- Termination and Severance Rules
- Employee Benefits and Additional Perks
- Anti-Discrimination and Equal Treatment Laws
- Labour Law Compliance Tips for Global Employers
- Why Work With an Employer of Record (EOR) in Italy
- Conclusion
- FAQs
Overview of Labour Laws in Italy
Italy’s labour legislation actively safeguards employee rights while providing a clear framework for employers to operate fairly. The Italian Civil Code, the Workers’ Statute (Statuto dei Lavoratori), and national collective bargaining agreements (CCNLs) form the core of the country’s employment law. Regional labour offices and the Labour Inspectorate enforce these laws, which align closely with European Union directives.
Employers must also comply with rules issued by the National Institute for Social Security (INPS) and National Institute for Insurance against Accidents at Work (INAIL).
Employment Contracts in Italy
Italian law requires employers to formalize all employment relationships—especially fixed-term or part-time roles—through a written contract. While Italian law may allow verbal agreements for indefinite-term contracts in specific situations, employers should always use written contracts. Doing so ensures legal clarity, strengthens enforceability, and guarantees full compliance with Labour Laws in Italy.
Key components that must be included in a compliant Italian employment contract are:
- Job title and description: A clear outline of the employee’s role, responsibilities, and reporting structure.
- Salary and working hours: The employment contract must clearly specify the gross annual salary, detail any applicable bonuses or benefits, and state the exact number of working hours required per week.
- Contract duration: Applicable if it is a fixed-term contract, including start and end dates.
- Notice period and termination clauses: The contract must outline clear terms for how either party can terminate the agreement, including applicable notice periods defined by law or collective bargaining agreements (CCNLs).
These terms must align with the relevant National Collective Bargaining Agreement (CCNL) for the sector and employee classification.
Common types of employment contracts in Italy include:
- Indefinite-term contracts (Contratto a tempo indeterminato): The most common and preferred form of employment, offering long-term job security and full statutory protections.
- Fixed-term contracts (Contratto a tempo determinato): Typically used for temporary needs, initially valid for up to 12 months and renewable up to 24 months under specific conditions.
- Part-time contracts: Define fewer weekly hours than full-time employment and must explicitly mention the work schedule.
- Apprenticeship contracts: These contracts aim to integrate young individuals into the workforce by combining hands-on work experience with structured formal training, supporting their professional development and transition into long-term employment.
Employers must ensure all contract clauses comply with Italian labour law and the applicable CCNL. Failure to do so can lead to fines, lawsuits, or the reclassification of fixed-term roles into indefinite contracts by labor courts. For international employers, working with an Employer of Record (EOR) in Italy helps ensure all contract structures are legally sound and aligned with local standards.
Working Hours and Overtime Rules
Italian law sets the standard workweek at 40 hours, usually spread across five or six days based on the sector and employment agreement. The legal maximum is 48 hours per week, including overtime, averaged over a typical reference period of four months. This limit complies with the EU Working Time Directive and aims to safeguard employee health and well-being.
Rest Period Requirements:
- 11 consecutive hours of rest are required within every 24-hour work period. This means employees cannot be scheduled for shifts that would reduce rest time below this threshold.
- At least 24 consecutive hours of rest must be provided every 7 days, usually combined with the 11 daily hours to give a full day and night of uninterrupted rest.
These rest periods are mandatory and apply to both full-time and part-time workers, unless exceptions are provided under the applicable National Collective Bargaining Agreement (CCNL).
Overtime Rules:
Overtime work (known as straordinario) must be authorized and documented, and it is typically governed by the relevant CCNL. Key aspects include:
- Limits on the total amount of overtime allowed (usually up to 250 hours annually, depending on the sector).
- Compensation for overtime is either financial (at a premium rate ranging from 115% to 150% of normal pay) or through equivalent compensatory rest time, based on the collective agreement.
- Employers must avoid excessive overtime to prevent fatigue, reduce health risks, and remain in legal compliance.
Employers should implement reliable time-tracking systems and keep detailed work hour records to avoid non-compliance penalties. For international companies managing remote or distributed teams in Italy, partnering with a local payroll provider or an Employer of Record (EOR) in Italy helps ensure all work schedules and overtime rules align with Labour Laws in Italy and industry norms.
Minimum Wage and Salary Regulations
Italy does not have a statutory national minimum wage. Rather than having a universal minimum wage, Italy sets wages through CCNLs, which establish salary standards based on specific sectors and job classifications. Employers must:
- Comply with the minimum salary levels in relevant CCNLs
- Pay salaries in euros via bank transfer
- Issue payslips detailing gross and net pay, deductions, and contributions
Adhering to CCNL requirements ensures legal compliance and competitive compensation.
Suggested Read: A Detailed Guide on Employer of Record Italy 2025
Social Security and Payroll Contributions
Both employers and employees contribute to Italy’s social security system, which covers pensions, health insurance, maternity, unemployment, and injury compensation.
Contribution Breakdown:
- Employers: ~30% of gross salary
- Employees: ~9% of gross salary
Payments go to institutions like INPS and INAIL. Payroll processing must align with monthly contribution deadlines and accurate reporting standards.
Leave Entitlements and Public Holidays
Italy regulates leave entitlements through both national legislation and collective bargaining agreements (CCNLs). These provisions aim to ensure work-life balance, protect employee well-being, and align with European Union labour standards.
Annual Leave
Employees in Italy are legally entitled to a minimum of 4 weeks (20 working days) of paid annual leave. This is a statutory right that cannot be waived or replaced by financial compensation, except upon termination of employment. Most CCNLs provide more generous vacation allowances, particularly for senior employees or those in specific sectors such as finance, public administration, or manufacturing.
- Employees must use at least two weeks of leave within the calendar year.
- The remaining leave can be carried forward but must typically be used within 18 months.
- Employers are responsible for ensuring that leave is taken and properly documented.
Sick Leave
Sick leave entitlements in Italy vary based on the sector and the applicable CCNL. However, the general framework includes:
- Initial sick days are paid by the employer, typically at 100% or 75% of salary, depending on the collective agreement.
- From the 4th day onward, compensation is often shared between the employer and the National Institute for Social Security (INPS).
- Employees must provide a medical certificate issued by a public or accredited physician, which is electronically submitted to INPS for verification.
Employees are protected from termination during medically certified sick leave, up to a maximum duration defined by the CCNL (often 180 to 365 days).
Maternity and Parental Leave
Italy offers strong family leave protections, ensuring both parents have time to care for their newborns:
- Maternity Leave: Mandatory for female employees—2 months before and 3 months after childbirth, totaling 5 months of fully paid leave, funded by INPS.
- Paternity Leave: Fathers are entitled to 10 days of paid leave, which may be extended in some cases. This leave is mandatory and funded by INPS.
- Parental Leave: Available to both parents until the child is 12 years old, for up to 6 months per parent (and 10 months combined), typically paid at 30% of salary for a limited period.
Employers must ensure proper documentation and apply for reimbursements from INPS during the leave period.
Public Holidays
Italy recognizes 11 national public holidays, during which employees are typically entitled to paid leave. These holidays include:
- New Year’s Day (January 1)
- Epiphany (January 6)
- Easter Monday (date varies)
- Liberation Day (April 25)
- Labour Day (May 1)
- Republic Day (June 2)
- Assumption Day (August 15)
- All Saints’ Day (November 1)
- Immaculate Conception (December 8)
- Christmas Day (December 25)
- St. Stephen’s Day (December 26)
In addition to national holidays, regional and local holidays may apply, such as the Feast of St. Ambrose in Milan or St. John the Baptist in Florence. If employees are required to work on a public holiday, they must receive either extra pay or compensatory time off, as dictated by the CCNL.
Understanding and managing leave policies correctly is crucial for maintaining compliance with Labour Laws in Italy. Many global companies choose to work with an Employer of Record (EOR) in Italy to administer leave, holiday entitlements, and social security contributions accurately and efficiently.
Employee Benefits and Additional Perks
Mandatory benefits in Italy include paid leave, social security, and TFR. Many employers also offer:
- Meal vouchers (buoni pasto)
- Health insurance top-ups
- Company cars or transport allowance
- Flexible working arrangements
These perks help attract top talent and improve employee satisfaction.
Anti-Discrimination and Equal Treatment Laws
Italian law strictly prohibits discrimination based on:
- Gender, race, religion, sexual orientation, political views, and disability
Employers must ensure:
- Equal pay for equal work
- Inclusive hiring and promotion practices
- Accessible workplaces
Violations can lead to legal action and reputational damage. Employers should train managers on diversity, equity, and inclusion (DEI) principles.
Labour Law Compliance Tips for Global Employers
To ensure compliance with Labour Laws in Italy, international employers should:
- Work with local legal counsel or a reliable Employer of Record (EOR) in Italy
- Align all contracts and HR policies with applicable CCNLs
- Maintain accurate payroll and leave records
- Monitor changes in employment legislation
- Invest in compliance audits and local HR support
Partnering with a provider of Global EOR Services allows you to focus on business growth while ensuring full compliance.
Why Work With an Employer of Record (EOR) in Italy
An Employer of Record (EOR) in Italy enables global companies to hire employees quickly and compliantly without establishing a legal entity. An EOR handles:
- Employment contracts and onboarding
- Payroll, tax filings, and social contributions
- Employee benefits and terminations
- Compliance with Italian labour laws and CCNLs
This is ideal for:
- Testing the Italian market
- Hiring remote professionals
- Converting contractors to full-time employees
Using Global EOR Services streamlines hiring and reduces legal complexity, especially for companies new to the Italian regulatory environment.
Suggested Read: Remote Employees Onboarding Checklist with EOR in Italy
Conclusion
Hiring in Italy offers access to top talent, but staying compliant with Labour Laws in Italy is essential. From contracts and wages to social security and terminations, legal precision is critical at every stage of employment.
Partnering with an Employer of Record (EOR) in Italy helps you navigate local laws, manage payroll, and onboard employees without setting up a legal entity. With trusted Global EOR Services, you can expand your team confidently and compliantly—focusing on growth while experts handle the legal complexities.
FAQs
Yes, especially for fixed-term or part-time roles, and must include terms defined by law or CCNL.
No national minimum wage, but sector-specific CCNLs establish mandatory salary levels.
The legal limit is 48 hours including overtime, with a standard 40-hour workweek.
TFR (severance) is accumulated during employment and paid upon termination.
Overtime is regulated by CCNLs and compensated with pay or time off.
Employers contribute ~30% of gross salary to INPS and INAIL.
Initially by the employer, then by INPS depending on sector rules.
Only in cases of just cause; otherwise, notice and justification are required.
Yes, employees are entitled to paid leave on national public holidays.
An EOR handles contracts, payroll, taxes, and compliance so you can hire without a local entity.
Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant or Labour Law expert for specific guidance.
