ItalyDiscover an employer’s guide to employment laws, regulations, and Employer of Record (EOR) in Italy.
Looking to hire in Italy? An EOR can help
Aiming to expand into Italy? An Employer of Record (EOR) service enables you to recruit, onboard, and manage employees without the need to establish a local legal entity.
As your team’s official employer in Italy, the EOR will handle onboarding, payroll processing, benefits administration, and tax compliance—all in accordance with Italian labor laws—while you focus on growing your business.
How to hire in Italy
Step 1: Choose between an entity and an EOR
When hiring in Italy, you have two options: 1) Establishing a local entity or 2) Utilizing an EOR.
Although setting up a local entity can be time-consuming, expensive, and complex, it provides more control over your operations in the long run. You have to register your business with the Italian government, appoint directors, and comply with intricate tax regulations.
This process can take weeks or even months, significantly delaying your hiring plans. Additionally, establishing an entity means you are directly responsible for ensuring compliance with all local employment laws and regulations.
With an EOR, you don’t need to navigate the complexities of Italian employment laws. You can onboard new talent swiftly and automate essential HR functions.
Generally, if your headcount surpasses a certain threshold and you aim to establish a substantial presence in the region, you might consider creating a local entity. However, if you seek a faster, simpler way to hire in Italy, an EOR is the better choice.
Step 2: Finding the right EOR
You must carefully consider several key factors when selecting the right EOR for your business. Choosing the wrong provider can lead to compliance issues, unnecessary costs, and a poor experience for your new hires. Here’s what to consider:
- Legal compliance. Ensure the EOR has a thorough understanding of Italy’s labor laws, employee protections, tax regulations, and local benefits. Investigate their track record and inquire about their experience with industry-specific scenarios.
- Customer service. Evaluate whether the EOR offers continuous support. For example, look for providers such as Multiplier, which offers 24/5 personalized support (no automated systems) and assigns dedicated managers to handle all your requirements.
- Transparent pricing. Be cautious of EOR services with low initial costs but hidden fees or complicated pricing structures. Make sure to clarify all associated costs upfront before making your decision.
- Total cost of ownership. The cheapest option isn’t always the best as less expensive solutions can end up costing more if they prove ineffective. Ensure that the EOR you choose offers quality service that fits within your budget without sacrificing essential features.
Step 3: Employing and onboarding in Italy
Send over a contract
After selecting the ideal candidate and the right EOR, the next step is to send a locally compliant employment contract to your new hire.
Multiplier can produce contracts that fully adhere to Italian law in less than five minutes. You can tailor the terms of employment, including job duties, working hours, salary, and termination conditions. Then, once the contract is finalized, we will securely send it for signatures.
Enhance compensation with competitive benefits
Looking to include an attractive benefits package? Sorting through local vendors can be a hassle. An efficient EOR simplifies the process by presenting several locally managed packages. Multiplier can also organize the necessary IT equipment for employees to start their jobs.
Get all your documentation in order
You will need to gather the new hire’s tax and banking details. An EOR like Multiplier will automatically collect this information to set up payroll. Multiplier will manage all required documentation directly, ensuring a seamless process without the paperwork headaches.
Onboarding employees in Italy might seem challenging, but an EOR makes it straightforward and stress-free.
Step 4: Run payroll for employees based in Italy
Managing payroll for employees in Italy demands close attention to local tax laws and required contributions. Italy has progressive income tax rates, ranging from 23% to 43%, depending on income levels.
Employers must also contribute a significant percentage of each employee’s salary to the Italian social security system, which funds retirement benefits, unemployment insurance, healthcare, and other social services.
The complexity and time required to navigate these regulations can be overwhelming, especially for multinational companies with a workforce in Italy.
An EOR like Multiplier can simplify this process, handling precise and timely salary payments, managing all local taxes, and ensuring compliance with contributions and withholdings.
Multiplier’s global payroll solution lets you oversee payroll for all your international employees from one platform, eliminating the need to juggle multiple local payroll providers.
Employment laws and regulations in Italy
Italy has several sets of regulations for hiring employees. The legal framework governing these rights is primarily derived from the Constitution and the Civil Code which outline core requirements for employment agreements, including employee protections, holiday entitlements, and dispute resolution processes.
To ensure well-being and workplace safety, Italy provides employees with rights to a safe and healthy work environment, transparent pay practices and minimum wage compliance, equal pay, and protection from discrimination.
Notably, the labor code in Italy mandates a minimum daily rest of 11 consecutive hours. Employees are also entitled to flexible working arrangements, ensuring that men and women receive equal pay for equal work under various Italian labor laws.
An EOR like Multiplier understands worker rights and protections in Italy. You can partner with us to avoid compliance issues when hiring and managing a workforce in Italy.
Employ top talent in Italy through an EOR
Onboard, pay, and manage all your international employees
Employee benefits and compensation
In Italy, the minimum wage is not set at a national level but is determined through collective bargaining agreements for different industries. Labor laws also mandate several standard job benefits in Italy:
- Pension contributions. Both employers and employees contribute to pension plans, which are part of Italy’s social security system.
- Annual bonus. Italy mandates bonus payments (13th salary), usually on occasions such as Christmas.
- Annual leave. Employees are entitled to at least 20 days of paid annual leave, which can increase based on seniority or specific company policies.
- Sick leave. Employees are eligible for paid sick leave, with compensation rates determined by the national collective agreements. Generally, employees receive between 50% to 100% of their salary during sick leave, funded through social security contributions.
- Parental leave: Italy provides extensive parental leave options, including five months of maternity leave at 80% of salary and up to 10 months of parental leave that can be shared between parents, with a varying rate of compensation.
- Accident insurance. Employers must provide insurance for work-related accidents through the Istituto Nazionale per l’Assicurazione contro gli Infortuni sul Lavoro (INAIL).
To attract and retain top talent, employers often offer additional benefits beyond these statutory requirements. Explore Multiplier’s global benefits administration to deliver locally compliant and competitive benefits to your international employees.
Termination and offboarding procedures
Employers must adhere to regulations regarding notice periods and severance pay when ending employment in Italy.
Notice periods generally range from one to three months, depending on the employee’s length of service and the terms of the employment contract. Severance pay is determined by collective bargaining agreements and the employee’s tenure with the company.
Specific rules also apply for terminations due to redundancy, such as business restructuring or economic challenges. Employers can offer payment in lieu of notice, but this must be clearly outlined in the employment agreement.
Navigating these procedures can be complex, especially for international employers unfamiliar with Italian labor laws.
An EOR, such as Multiplier, can simplify this process by managing the termination and offboarding procedures. This ensures compliance with local regulations and provides a seamless transition for both employers and employees.
Visa and work permit assistance
Hiring international employees in Italy requires obtaining the appropriate visas and work permits. Here are the main visa categories:
- EU Blue Card: For skilled workers from outside the EU with qualifications and experience in high-demand fields.
- Work Visa (Tipo A): For non-EU workers coming to Italy for specific job positions. This typically requires a job offer from an Italian employer.
- Seasonal Work Visa: For workers from certain countries to fill seasonal positions in industries such as agriculture or tourism.
- Intra-Company Transfer Visa: For employees being transferred within a company to an Italian branch or subsidiary.
For non-EU citizens, obtaining a work visa requires a Nulla Osta (authorization to work), which the employer must apply for. Italy operates a quota system for work visas, which means that the number of visas issued each year is limited. After entering Italy with a work visa, individuals must apply for a residence permit within eight days of arrival to legally stay and work in the country.
Multiplier offers comprehensive work permit and visa support as part of its Employer of Record (EOR) services. For more information on how we handle global immigration issues, visit our Global Immigration page.
Get started with Multiplier’s EOR services
With Multiplier EOR, you can hire, onboard, and manage your team in Italy without setting up a local entity.
We handle locally compliant contracts, manage payroll and taxes, and offer a range of customizable benefits tailored to Italian standards, so you don’t have to worry about compliance issues.
Book a demo today to learn more.
