Contract work in Italy: essential tips and recommendations
Moving to Italy, learning a new language, finding an apartment and looking for a job can take a toll when starting a new life abroad. Even after finally landing a job in Italy, you might feel tempted to just sign the employment contract and get it over with. However, a good foundation in the basics of Italian work contracts will go a long way to making that new life a bit easier.
Requirements and Eligibility for Working in Italy
As always, the first thing you should know is whether or not you are eligible to work in Italy and what the requirements are. Non-European job seekers will first need to find a job—in most cases even before arriving in Italy—so they can apply for a work permit.
Employment Contract Basics
In Italy, every staff member needs to have an employment contract (contratto di lavoro). The employment contract describes in detail the specifics of the working relationship between both parties, the employer and employee. It has to include: job title, salary, responsibilities, duties, sick pay, holidays and notice periods. Most employment contracts can be made in any language. What’s important is that both parties understand the content of the contract’s terms and conditions.
There are two main kinds of contracts. The first is a permanent employment contract (contratto a tempo indeterminato) and the second is a fixed-term employment contract (contratto a termine or contratto a tempo determinato). Both types are bound by the general rules established by the Italian Civil Code. New legislation has been recently passed with the intent to encourage companies to offer permanent employment contracts and discourage the use of fixed-term employment contracts, imposing several constraints to the latter. This is clearly a new course for Italian law, considering that regulations from 2015 were, instead, aimed at easing the use of fixed-term employment agreements, in a call for higher flexibility in the job market.
National Collective Agreements
Each industry in Italy has a National Collective Agreement (NCA) that regulates the employment relationship. Because of this, Italian employment agreements normally take the form of a simple hiring letter. This letter refers to the items required by the law such as the identity of the parties, place of work, start date, trial period, duration of employment (if the contract is fixed-term), employee’s duties and the provisions specified in the relevant NCA.
Permanent Employment Contracts
The permanent employment contract governs the more traditional employment relationship in Italy. This type of contract has an indefinite time period and guarantees the employee more protection than any other form of Italian employment contract because there is no end date and the conditions necessary to be fired are strict. As such, it is more coveted than the others.
Companies can also hire employees with a fixed-term contract for an established, but limited period of time. A fixed-term contract can last up to 12 months and can be extended up to 24 months in specific cases. The limits are typically set by national collective agreements (NCA). Italian law states that the general number of fixed-term contracts may not exceed the 20% threshold of the workforce who are hired on a permanent basis. Since this contract lasts for a specified period and terminates automatically neither party needs to give notice.
A fixed-term contract can be renewed, but before renewal the employment relationship must be interrupted for a period of 10 days (for contracts up to 6 months) or 20 days (for contracts over 6 months). If the parties fail to do so or if the employment relationship endures beyond the end date (and beyond a “grace period” of 30 or 50 days depending on the duration of the contract), the contract automatically becomes permanent. The previously mentioned “grace period” entitles the employee to a salary increase of 20% and extends up to 40%.
Fixed-term contracts cannot be used to replace workers on strike or to replace employees temporarily laid off or involved in recent collective dismissals.
Part-time contracts must be drawn up in writing and specify the employee’s working hours. Any pay and other entitlements are pro-rated according to full-time employees carrying out the same job. An employer can add specific ancillary clauses, either elastic clauses (clausole elastiche) or flexible clauses (clausole flessibili) to increase working time or vary working hours during the day.
With On-call contracts an employee declares their availability to work over a certain period of time. During these times the employee can be called in on short notice. This contract must be drafted in writing. In some cases, the contract may state that the employee is bound to work if called in by the employer. If this happens, the employee is eligible for an additional percentage of the wage set by the corresponding National Collective Agreement.
An apprenticeship is an open-ended contract focused on vocational or occupational training. An employer can hire apprentices within certain quantitative thresholds which usually depend on the number of employees hired. The employer is responsible for ensuring that the apprentice acquires the relevant professional skills and qualifications over the course of employment.
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When Everything Looks Good
If you agree with all the terms and conditions as well as the type of contract the employer offers you for that new job in Italy, you can sign off with peace of mind and begin your new life in Italy.
Check out our video about regime forfetario below, and about partita iva, and wether or not you should always open partita iva.
Want to read more? Check out also our articles about filing your taxes in Italy, managing payroll of employees, and freelancing in Italy.
After moving back to Italy from the United States in 2013, I realized how much an accounting and tax firm was needed to help expats living in Italy to comply with the local tax regulations.