Compensation and benefits are 2 of the most critical parts of any contract or offer letter negotiation. In Italy, you’ll need to pay even closer attention to compensation and benefits laws to make sure you meet the statutory minimums as well as any additional benefits outlined in Collective Bargaining Agreements (CBAs).
Italy compensation laws
Italy does not currently have a national or regional minimum wage. There are several national CBAs related to the different sectors of business, and every national CBA provides a mandatory minimum salary in order to guarantee the workers a decent lifestyle.
Many CBAs provide for the payment of 2 additional monthly salaries. The 13th-month salary is due in December and the 14th-month salary is due in June every (calculated pro rata).
Guaranteed benefits in Italy
Every employee in Italy needs to receive certain guaranteed benefits. For example, taxes from both employers and employees fund Italy’s national health insurance, which the National Health Service (SSN) manages. Every employee gets a health card that entitles them to free or low-cost treatment.
Employees also are entitled to paid annual leave based on their applicable CBA. Under the trade sector CBA, employees are granted a minimum of 22 days of vacation called “ferie” (25 is the minimum provided for executive levels).
In addition to the vacation days, employees are entitled to hourly paid leave as follows:
- For employees with seniority of up to 2 years: 32 hours per year
- For employees with seniority of up to 4 years: 78 hours per year
- For employees with seniority of 4+ years: 104 hours per year
Vacation days are in addition to the 11 public holidays granted to employees each year.
It’s important to note that in Italy “ferie” days don’t expire, and if they are not used the days will be accrued and paid out at the end of the employment relationship.
Furthermore, employees must take at least 2 consecutive weeks (not fractionated) of vacation time. The remaining vacation days can be taken at the discretion of the employee throughout the year.
On the other hand, PTO hours that are not used within the first 2 years of employment expire and are paid within the 18 months following their accrual.
Pregnant employees are entitled to 5 months of maternity leave. The employee can decide how to distribute this time: 2 months before the birth date and 3 months after the birth date, 1 month before the birth date and 4 months after the birth date, or all 5 months after the birth date.
Italy benefits management
Making sure employees in Italy receive both guaranteed benefits and any supplemental benefits is an essential part of benefits management. Guaranteed benefits are either set by the national standard or dictated by a CBA. Supplemental benefits encompass anything that is not required but is common in Italy and expected from workers.
Some traditional supplemental benefits are:
- Private health insurance
- Company car
- Mobile phone
- Meal voucher
- Additional training
Benefits and compensation restrictions
You’ll also need to follow several restrictions on benefits and compensation. For example, CBAs regulate everything from rest breaks to the appropriate overtime pay. Before you stipulate these terms in an employment contract, it’s best to cross-reference any relevant CBAs to determine the minimum level of compensation and benefits required.
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