What do I need to hire people in Italy?
I need an employer
First of all, a foreigner Company who wants to hire people in Italy must decide what kind of employer would be suitable for its business purposes.
The main options are the followings:
- Subsidiary: the foreign Company may set up a new legal entity in Italy under Italian law. The NewCo might be 100% owned by the foreign mother-company
- Branch: the foreign Company may set up a permanent establishment (according with OSCE definition): the PE will be part of the foreigner legal entity but it may operate business in Italy like an Italian company
- Representative Office or «Light Branch»: the RepOffice is just an administrative registration to the Italian Companies’ Registrar. It may be a cost-centre under a tax point of view but it is not allowed to perform any manufacturing or trading activity: the RepOffice is only aimed to make studies and collect information about the local market in order to make easier to a foreigner company to enter into the Italian market; the RepOffice may also offer information to the Company’s clients or potential clients
- Foreigner employer: the foreigner employer may also
SSR: out of the cases of the subsidiary and of the branch, the Company must also appoint a Social Security Representative in Italy or «SSR». The SSR will act in the name and on behalf of the employer Company towards the Italian bodies involved in the management of employment and payroll. The SSR will be jointly liable for the compliance of the Company to its social security duties.
I need an employee
Of course any employer needs to have an employee.
Any person may work as an employee in Italy but non-Italian citizens must comply with the Italian immigration laws.
The immigration department of our firm may assist through this process also. Please find more detailed information on italianvisa.it
I need an employment contract
The employment contract in Italy may be stipulated even orally but it is very strongly recommended to make it in writing.
Many special agreements, in fact, are null and void if not agreed in writing; and any other content of the employment agreement will be much more sure and enforceable if clearly written.
The employment contract in Italy must respect several rules given outside of the agreement between the parties:
- Non-Italian laws and jurisdictions: the parties may like to apply to their employment contract any foreigner law and jurisdiction. Such a choice would be not enforceable in most cases and a wide part of the employment regulation will be subjected as well to the Italian mandatory rules.
- Italian laws: Italy has a wide set of laws regulating the employment relationship most of which may be not excluded by the choice of a foreigner law. The European rules are also applicable of course.
- CBAs: Italy has also many collective bargaining agreements, called «CBAs» or «CCNL». Most of CBAs rule a specific sector (e.g.: manufacturing, trading, textile, etc.) or category (e.g.: executives of the trading sector, etc.). The CBAs are stipulated by the trade unions of the employees and of the employers and they usually have effect fro a period of three years after which they are re-negotiated. Each CBA has its national agreement, applicable to the entire Italian territory; and its regional and/or local agreement; each company may even agree its own CBA with the local or company’s trade unions.
I need to comply with the mandatory Italian payrolls system
Last but (really) not least any employer in Italy must comply with several duties and fulfilments.
The main bodies involved are the followings:
- Agenzia delle Entrate: this is the homeland revenue agency and it is the collector of all the income taxes. Employers – with only limited exceptions – must operate as withholders on behalf of the Agenzia and withhold from all the employee’s salaries the income taxes he/she is obliged to pay and directly pay them to the Agenzia
- INPS: this is the National Social security body. Employers must pay to INPS the mandatory social security contributions
- INAIL: this is the National Health and safety insurance body. Employers must ne registered to INAIL and pay the annual fees for the compulsory insurance against accidents at work
- Employment Office: it is called «Centro per l’impiego» and is organized on a regional basis. Employers having more offices in several Italian regions may deal with one office only (e.g.: the Milan one)
- National Employment Bureau: the «Ispettorato Nazionale del Lavoro» is a department of the Government with several duties the main of which is to control the compliance of employers to laws and payments.