Italy is among the largest economies in the western world and recent changes in laws and regulations have made it an attractive destination to foreign entrepreneurs. Business opportunities and the availability of a large and highly skilled workforce are also important factors in Italy’s entrepreneurial appeal. If you are planning on starting a business in Italy, you are going to need the right team to work with. Whether your company is an up and coming tech startup or a more traditional firm, it is essential to find the right people for each position and to draft the appropriate contract for everyone. If you are considering hiring in Italy, you should be aware of the main laws and collective agreements on employment and of the different types of contract available. The following list is a quick summary of this complex matter: be sure to consult with a professional advisor before hiring in Italy.
Hiring in Italy: here’s what you need to know before you start your business
1. Permanent contract
A permanent contract (Contratto a tempo indeterminato) is an open-ended contract and it is considered to be the ideal standard when hiring in Italy. It includes a detailed description of the worker’s tasks and it regulates such aspects as paid leave, notice and benefits. Employment laws in Italy regulate the levels of salary available to different types of permanent contract (e.g. junior vs senior positions). Depending on the specific field you are operating in, collective labour contracts may apply: be sure to look up regulations pertaining to your field before drafting contracts. Contracts also automatically become permanent if a fixed-term contract is renewed beyond the maximum number of times allowed.
2. Fixed-term contract
As the term implies, the Contratto a tempo determinato comes with an expiration date. It is to be used for assignments and projects that happen within a definite timeframe. A fixed-term contract can be renewed up to five times, but in no circumstance can it extend beyond 36 months, whether in one contract or as a consequence of successive renewals. There are exceptions to this rule, particularly in the case of seasonal activities. Managerial positions can also be subject to fixed-term contracts for up to five years. There are also limitations on the number of fixed-term contracts each one employer can offer (one fixed-term contract for every five permanent contracts). Both fixed-term and permanent contracts can cover full-time or part-time work.
3. Apprenticeship contracts
Apprenticeship contracts can last between 18 months and four years and they can be used to hire young workers (between 15 and 25 or between 18 and 29, depending on the type of apprenticeship) and they offer lower pay than either fixed-term or permanent contracts, because the employer is required to provide adequate professional training for the apprentice. There are several financial incentives available for employers who hire apprentices, including tax cuts and reductions in social security costs. Apprenticeship contracts are not renewable: at the end of the contract, if the employer wishes to hire the worker, they are required to offer them a permanent position. There are different types of apprenticeships, pertaining to different fields and providing different levels of training.
4. Intermittent labor contracts
Intermittent contracts regulate the kind of professional assignments that are only required for a certain period of time (e.g. a specific season) and they can cover up to 400 working days within the span of three years. This kind of contract can not be used as a substitute in the case of exceptional circumstances such as workers’ strikes or when the employer has reduced their permanent workers’ schedule or cut their permanent workforce in any way. Intermittent workers must receive the same economic treatment (e.g. hourly pay) as permanent or fixed-term workers performing the same duties. This kind of contract exclusively applies to worker younger than 24 or older than 55.Need help starting your business in Italy? Call us today!