Employer of Record in Italy
Skuad’s Italy EOR (Employer Of Record) solution assists your business to expand into Italy without an entity setup. Its global HR platform makes the onboarding of remote teams, managing their payrolls, etc., a seamless process.
Skuad’s international network helps you grow your business in the country by adhering to all the local laws. Italy’s skilled population and robust economy make it an ideal destination for businesses seeking to grow into new markets. With Skuad’s experience in the Italian industry, you can now get your team in Italy up and running faster than ever before.
Italy at a Glance
Population: 60.4 million (2019)
Capital city: Rome
Languages spoken: Italian, French
GDP per capita: 33,228.24 USD (2019)
Employment in Italy
The Italian labor market is closely regulated and disproportionately prejudiced towards employee rights, making it difficult to navigate. Employers must comply with a plethora of regulatory provisions based on the form of employee and contract in question, and compliance with Italian labor and work legislation is often expensive and a tedious process. However, the global economic crisis has compelled Italian legislators to support fiscal, social, and legal changes to improve labor market flexibility in Italy.
In Italy, employee contracts of employment and labor associations are governed (in order of precedence) by:
- The Italian Constitution
- The Civil Code Employment and labor matters governed under Section III (‘On the employment relationship’), Articles 2094-2134
- Italy has comprehensive employment and labor legislation established by the Italian parliament.
- Regulations assigned by officials other than the parliament and government
- Italian Collective Bargaining Agreements
- Custom and practice for issues not governed by statutory provisions or by mutual agreements. Customs are more favorable to employees over statutory provision but do not prevail over individual employment agreements.
Knowing these rules will help an organization save a lot of time and effort in its expansion process in Italy. Hence, partnering with an Employer of Record (EOR) in Italy like Skuad can help you gain an advantage while hiring a workforce in Italy remotely.
Contractors vs. Full-Time Employees
Full-time employees are employed by your firm and devote their working hours to your tasks. They are not paid on a project basis but rather on a set salary, and they often use your company's resources to do their task. In exchange, the employer must pay income tax as well as social and other benefits to the employee and manage their day-to-day operations. In most cases, if you wish to discontinue your working relationship with your employee, you must provide a termination notice.
Contractors, on the other hand, typically operate on a freelance basis, which means they only work when needed and have other clients. They are paid by the project and just work for you for the hours that are required. As a result, they are liable for their own taxes, and you are not required to pay any benefits to them. They also often employ their own resources, which keeps their clients' costs cheap. Depending on the contract, work can frequently be canceled at any moment or with only a short notice period.
Both alternatives have a lot of advantages. Individual demands must be considered while determining the best option for your company.
Hiring a contractor is generally the best option if you need an overseas contractor fast to assist with a temporary job. On the other hand, if you need long-term assistance for entering a certain market or maintaining expertise in-house, you should consider employing a full-time employee.
All employment contracts in Italy must be in writing. Furthermore, Italy is a member of the European Union (EU), which means it adheres to all the EU directives and legislation.
According to the European Union Directive No. 533/91, it is mandatory to provide information on all the terms and conditions of employment. The employee receives the employment contract within 30 days of recruitment. It is compulsory to mention all the terms and conditions of the company in the employment contract.
Individual employment contracts in Italy must specify the following points:
- Parties to the job contract.
- The starting date of a job, and the entire duration of the probation period, if any.
- An expiration date for a fixed term of employment in Italy.
- Method of calculating payrolls, payment frequency, and other terms and conditions related to salary.
- Daily work hours.
- Paid leaves, if any.
- Employee responsibility and related work category, according to Civil Code under article 2095.
Whatever path you choose, you are not required to walk it alone. Employers of record firms that offer global employment solutions handle all legal concerns associated with recruiting overseas employees on your behalf. Talk to us if you want to know more about Skuad’s Employers of Record service.
Hiring In Italy
The recruitment process in Italy is straightforward. Once the hiring needs are identified, and the job description is announced, employers must either use an internal team or partner agency to find suitable talent for the role. Professional social networking apps such as LinkedIn are immensely popular with recruiters for finding the best talent for every role.
Some other well-known websites include,
- Info jobs
- The local.
Italy follows a straightforward procedure while hiring candidates:
- Candidates who fulfill all the criteria mentioned in the job description go through a primary background screening before being shortlisted.
- The shortlisted candidates are interviewed through a series of panels, like technical rounds and HR rounds, to better evaluate their aptitude for the job and analyze if they are a perfect match for the company and its culture.
- After a final evaluation, the most suitable candidates are selected and offered a letter of intent or employment letter. Finally, upon successful negotiation and signing, the candidates are onboarded as rightful employees of the company.
Hiring through an employment website, social media posts, or advertisements in Italy has its advantages, such as the availability of many prospective candidates from a diverse set of experience pools. It takes away the risk of not finding the right candidate or a shortage of talents in the job pool.
On the flip side, organizations may have to go through a monotonous procedure of filtering several applications and selecting prospective candidates most suitable for the job. This is usually a challenging process, especially during initial screening.
Apps like LinkedIn and Monster still have an inadequate influence in Italy and cannot be the sole platform to source talent, especially if you need talented and experienced professionals.
Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record like Skuad in Italy is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you ramp up hiring using their knowledge of domestic employment practices and virtual onboarding tools. The best EORs also facilitate the e-signing of documents to enable faster onboarding.
Not only does Skuad help in rapid recruitment, but it assists in other Human Resources-related functions such as:
- Payroll management
- Time management
- Expense management
- Security and compliance
- Tax filing.
These features make up a faster, affordable, and more seamless experience for the organization and the candidate.
Skuad and its local partners also handle all legal procedures on your behalf as an Employer of Record. As a local third-party organization, we become the legal employer of your new talent as well, while you continue to manage the employee's day-to-day operations.
We make certain that your new employee meets all local legal requirements, including the payment of taxes and social security benefits. This enables you to satisfy your worldwide employment demands with utmost ease while hiring individuals in countries where you do not have a legal company.
Learn more about Skuad’s Employer of Record solutions here.
Probation And Termination
An Employer of Record is the perfect way to access the Italian workspace without having to set up a subsidiary unit. It has many benefits, including eliminating the need to create a separate entity, opening up time and money to concentrate on other facets of growth plans, and simplifying legal compliance.
With Skuad’s experience, company expansion becomes a cost-saving and quicker process without having to create a separate team responsible for all workforce management processes. Although companies may set up an organization to engage their personnel, the management of employees, payroll management, and navigating regulatory obstacles can be time-consuming. Why wait? Book a demo now to know how you can leverage Skuad’s solutions for your business.
Outsourcing employment through an EOR in Italy
Working with an Employer of Record will save you the time required in the whole recruiting process, such as payroll processing, tax management, and other similar processes.
Some additional benefits of working with an EOR of repute such as Skuad include tailor-made contracts, establishing all processes in compliance with local laws, easy amendment of existing contracts, and convenient e-signing of documents.
Types Of Visas In Italy
As an EU member, Italy permits people from other EU member states to work without a visa or permit. European Economic Area (EEA) country citizens are also free to work in Italy. Any workers who are not citizens of the European Union or the EEA need a ‘Nulla Osta (invariable visa)’ working visa.
In Italy, a working visa, also known as a national or D-Visa, falls under the ‘long-stay category.’ It is worth noting that an Italian work visa only allows workers to enter the country. They will need to obtain a residency permit on arrival to remain in Italy.
Trust Skuad to take care of your work permit requirements. Call us to know more.
Payroll And Taxes In Italy
To set up payroll in Italy, you must be mindful of the local laws and the acts that regulate those rules. Knowing your employee profile is important, and it will help you understand which laws are applicable and need to be complied with.
Taxation is another necessary process that you need to be vigilant about. Working with an EOR such as Skuad will help you save precious time and initial expenses so that you can focus on the expansion of your business operations.
Taxation in Italy
Bonuses are generally given at the discretion of the employer as a 13th month salary at Christmas, but are sometimes mandated by contracts or collective bargaining agreements as well, for example, a vacation pay in the summer.
Incorporation: How to Set Up a Subsidiary in Italy
A foreign company seeking a work permit for its employees in Italy must first establish its Italian subsidiary/branch/representative office. After that, this Italian entity can apply for a work permit.
The entire procedure consists of three steps:
- Authorization requests are made by the employers to the Immigration Single Desk (ISD).
- Visa requests are made by prospective employees in their home country.
- The work permit is requested and delivered.
These steps require a thorough knowledge of the entire process and an understanding of the workings of the local authorities to avoid any reworks in the application process. Companies providing EOR solutions, such as Skuad, can be of great help in this case.
Talk to us now to learn more about our EOR solutions.
Professional Employer Organization (PEO)
A Professional Employer Organization (PEO) provides human resources services such as recruiting, payroll management, pension administration, and workforce management. However, where it differs from an Employer of Record is that a PEO acts as your co-employer and all final decisions regarding human resource management still rest on your shoulders. An EOR, on the other hand, is a third-party organization that acts as the legal employer of your employees in the country of expansion and takes over the burden of Human Resources management for you.
Skuad offers PEO services as well as EOR services. As a PEO affiliate, companies influence the decision-making processes when partnering with Skuad. EOR solutions in Skuad do not require organizations to have an agency in the expansion country. Skuad completely takes over the hassles of working through the various stages of documentation and employment contracts.
The most important part of setting up a remote team in Italy while conducting business expansion is knowing the local laws and how they affect all employment processes. The method of growth is based on several factors and rules:
- Various categories of employees.
- Variations in legislation.
- Understanding the Italian negotiation process.
- Establishing payrolls and tax complexities.
However, instead of setting up an entirely new entity and knowing the consequences of every law on the employment process, it is simpler to work with a trusted and experienced partner who can take care of your HR needs.
This step ensures that the organization’s human resources policies are consistent with the local legal codes and that you are never in error. The multinational teams and expertise of Skuad make it easy to recruit skilled personnel in Italy and effectively manage your payroll and pensions. It also supports you with a unified employment platform for compliance and taxation.
Skuad has succeeded in building trust among many distinguished organizations and is looking for ways to make your preparations for expansion easier. Book a demo today and get the boost you need for your company’s growth plans.