Considering expansion in Italy? Recruiting and hiring in the Belpaese involves more than just finding the right talent. Indeed, it requires a good understanding of the local labour market and strict adherence to Italian labor laws. In this article, learn more on how to recruit and manage Human Resources in Italy.
What are the Main Recruitment Trends in Italy?
The year 2021 marked many changes for companies and their employees worldwide. During this period, companies rushed to adapt to the COVID-19 pandemic, which radically changed the way of doing business.
Out of necessity, everyone have shifted to virtual interactions. Now that people are more familiar with Zoom, Teams, and similar platforms, video conferencing has become a viable alternative to face-to-face meetings.
The ongoing need for social distancing for the foreseeable future has led many to embrace virtual interactions and consider them suiting for everything, from job interviews to medical consultations.
Both employers and employees have taken note of this fundamental shift in our ways of living and doing business. These aspects must be considered in recruitment strategies.
As companies consider their choices for maintaining success in the current economic environment, virtual and automated processes will still play a significant role in recruitment processes.
These are the five main recruitment trends in Italy for 2023:
- Accelerated shift of recruitment processes from offline to online
- Increased automation of the recruitment processes
- Increase in global talent sourcing
- Investment in candidate experience
- Employer branding focused on adaptability and business resilience
What are the Labour Laws in Italy?
Italian labour laws are found in several legislative sources. The main ones include:
The Italian Constitution
Article 1, which defines Italy as ‘a democratic republic founded on work’, is possibly the most familiar article to all Italians. In addition to this important premise, however, there are other significant legislative references to work in the Constitution. Many of the laws in Title III of the Italian Constitution (Economic Relations) cover the subject of work. The key articles that need to be highlighted are the following Here are the most important articles:
Art. 35: protects work in all its forms and applications.
Art. 36: speaks of remuneration proportionate to the quantity and quality of work and of working hours.
Art. 37: states that women have the same rights and, for equal work, the same pay as workers.
Art. 38: provides for social assistance and maintenance for citizens unable to work.
Art. 39: provides for freedom of trade union organisation.
Art. 40: provides for the right to strike.
Art. 41: enshrines the freedom of private economic initiative, i.e. of enterprise operational reasons; in some cases the hurdles are high due to employee friendliness and the shifting of the burden of proof to the employer.
The Workers’ Statute in Italy
We could define Law No. 300/70 as the most important and in-depth source of legislation on workers’ rights. This law is entitled ‘Regulations on the protection of workers’ freedom and dignity, trade union freedom and trade union activity in the workplace and regulations on employment’. It is therefore a veritable vademecum for workers and employers.
The law has a total of 41 articles, divided into 6 titles covering the following topics:
The first: Freedom and dignity of workers
The second: Trade union freedom
The third: Trade union activity
The fourth: Miscellaneous and general provisions
The fifth: Placement
The sixth: Final and penal provisions
This is clearly a very extensive source of legislation and, even though it was enacted 50 years ago, it continues to be one of the main regulatory points of reference in labour matters.
Law No. 604/66
Here we are going to talk specifically about a law that deals with the thorny subject of individual dismissals. This is a complicated subject both on a human and legislative level, since over the years, several legal provisions have overlapped.
These are the main points:
– Prohibition of dismissal without just cause.
– Prohibition of discriminatory dismissal.
It is important to emphasise how, under Law 604/66 alone, dismissal without just cause is provided for, but not in fact the obligation to reinstate, considering instead economic compensation. Instead, reinstatement is provided for in Article 18 of the Workers’ Statute but is limited to companies with more than 15 employees.
Law 223/91
We are still about redundancies, but this time we are talking about collective redundancies and cover the following topics.
- Redundancy fund
- Mobility
- Unemployment treatments
- Implementation of European directives
- Start of work
The issues most strongly addressed by this law therefore concern all those wage supplementation measures of an extraordinary nature aimed at supporting workers as well as the main provisions to be implemented in the event of collective redundancies.
The Treu Law (196/97)
This is the law that introduced the first forms of flexible work in Italy with the aim of combatting unemployment.
The law directly regulates certain institutions such as apprenticeships and temporary work, providing provisions on future legislative production and other provisions referring to social bargaining. It regulates more comprehensively the figure of socially useful work and introduces the coordinated and continuous collaboration contract and the project contract.
The Biagi Law (30/03)
Summarising the main contents and innovations with respect to the Treu law, we can say that the themes are:
- Flexibility of employment contracts
- Supply contracts
- Apprenticeship contracts
- Insertion contracts
- Coordinated and continuous collaborations
What Must Be Considered for Foreign Employees in Italy?
Citizens of the European Union, the European Economic Area or Switzerland don’t need a visa to work in Italy.
A non-EU citizen needs:
- A Visa
- A work permit
- A residence permit within eight days of entering Italy
Understanding Payroll in Italy
The payroll and tax system in Italy is different from many other European countries, making the Italian regulatory environment uniquely challenging to navigate.
To administer accurate and compliant payroll in Italy, you’ll need a firm understanding of the regulations that govern payroll processing and reporting.
Currency
The euro (EUR) is the official currency of Italy.
Payroll cycle
There is no required frequency for wage payments in Italy. Wage payments must be accompanied by a payslip that itemizes deductions. Employers may pay by check or direct deposit into a bank account.
Income tax
Corporate entities in Italy are subject to an income tax of 24% plus a regional production tax of 3.9%. Non-operating entities are subject to a 34.5% corporate tax rate.
Effective since Jan. 1, 2022, Italy’s national personal income tax rates and minimum and maximum amounts of annual income for each tax bracket are as follows:
- Up to €15,000: 23%
- €15,001 – €28,000: 25%
- €28,001 – €50,000: 35%
- More than €50,000: 43%
Regions and municipalities collect an additional income tax of up to 3.33% for regions and up to 0.9% for municipalities.
Italian payroll requires that all employment wages, tax and social security contributions are reported in a yearly document called the Certificazione Unica dei Redditi (CUD). By February 28 of each year, employers must provide all employees with two original CUD documents for the previous reporting year.
Each year a new model of the CUD is released by the Ministry of Finance, due to the introduction of new tax provisions.
Social Taxes in Italy
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.
Generally, employers contribute 35% of gross earnings. Employee contribution rates vary by employment category, but the common rate is 10% of gross earnings.
Holidays in Italy
Italy observes 12 national holidays, which are generally treated as paid leave for employees:
- New Year’s Day
- Epiphany
- Easter
- Easter Monday
- Liberation Day
- Labor Day
- Date of the Founding of the Republic
- Assumption Day
- All Saints’ Day
- Feast of the Immaculate Conception
- Christmas Day
- Stephen’s Day
- Each locality also observes one additional holiday to honour its patron saint.
Employees receive an additional day’s pay if a public holiday falls on a weekend, and employees who must work on a holiday receive overtime pay.
If you have any questions about payroll in Italy or need assistance with your recruitment project, please feel free to contact us.
