How to hire in Italy through an EOR

Fixed-term contracts in Italy come with strict limits and need objective justification, like covering a temporary surge or a replacement. If you misuse them, courts will often convert them to permanent contracts, which means long-term obligations you didn't plan for.

Indefinite contracts are the default for most hires. They signal stability and can qualify you for hiring incentives, like a 50% cut on employer contributions for three years. Fixed-term contracts are riskier than they look. Stretch the duration or skip the justification, and you could end up with a permanent employee anyway.

What has to be in the contract

Italian law requires a written contract for every hire. It needs to cover the basics: start and end dates (if fixed-term), probation length, paid leave entitlement, main work location, job title, level, and category, such as executive or white-collar.

You'll also need to reference the correct national collective agreement (CCNL) for your sector. This sets the minimums for pay, notice periods, and more. Your contract can't go below those floors. Italian is the standard language for compliance, though you can use the worker's language if both sides agree.

Probation is typically 3 months, up to 6 for executives. During that period, either side can end things without notice. After probation, dismissals require cause and a proper process, or you'll owe severance.

Contractor vs employee

Italy draws a clear line between subordinate employees and parasubordinate workers, like co.co.co contractors. Courts look at control: do you set the hours, tools, and tasks? If the answer is yes, it's likely employment, regardless of what the contract says.

Getting this wrong is expensive. Misclassification can mean back wages, unpaid INPS contributions, and fines ranging from 1,500 to 18,000 euros per worker. On top of that, the relationship typically converts to an indefinite employment contract.

Non-compete clauses need to include compensation during the restriction period and be tied to real, demonstrable harm. Courts will only enforce narrow ones. For IP, employees own their inventions by default unless you've contracted otherwise, so it's worth getting that in writing upfront rather than sorting it out in court later.

Italian employees get a genuinely generous amount of time off compared to most countries, but there's a catch: the law sets a floor, not a ceiling, and what people actually expect is often higher. Here's what you need to know to hire and retain talent in Italy.

Annual leave: the numbers and how it works

The legal minimum is four weeks (20 working days) of paid annual leave per year. Many collective bargaining agreements push this to 26-32 days depending on the sector, so don't assume 20 days is what your hire will accept. Employees accrue roughly 2.16 days per month, starting from their first month if they work at least 15 days.

There's an important rule here: employees must take at least two consecutive weeks within the year they accrue the leave. The remaining days can carry over for up to 18 months (typically until June 30 of the following year), but if they're not used by then, you have to pay them out. That's not optional. You also can't force someone to take all their leave at once. You need to agree on timing together, though you can set company-wide closure periods like August shutdowns.

Public holidays are separate from annual leave and are fully paid. Here are the 12 statutory holidays:

All leave types: what's required and what it costs

Mandatory benefits: what the law requires

Social security contributions are mandatory. Employers pay roughly 17-18% of gross salary, and employees contribute about 9.19%. This covers pensions, healthcare, unemployment insurance, and disability. Healthcare in Italy is public and funded through these contributions, so employees get access to the national health system automatically.

Pension contributions are compulsory and go into the national system. There's no opt-out. Some employers also offer supplementary pension plans, which is becoming more common but isn't legally required.

One thing many companies overlook: meal vouchers (buoni pasto) aren't legally required, but they're standard practice in most sectors and collective agreements. Employers typically provide vouchers worth €5-8 per working day, and they're tax-advantaged for both sides. If you don't offer them, candidates will notice.

What people actually expect (and what will cost you talent)

The legal minimum of 20 days annual leave is a starting point, not a finish line. Most people in professional roles expect 25-28 days, especially if they're moving from a company that offered more. Offering exactly the legal minimum signals you're cutting corners.

Private health insurance is increasingly expected, particularly for management and professional roles. It's not legally required, but it's become a standard perk in competitive hiring markets. Employees value it because it means faster access to specialists and dental and vision coverage that the public system doesn't fully provide.

Remote work flexibility and flexible hours are now table stakes for attracting talent, especially in tech and professional services. It's not a legal requirement, but it's what people expect when evaluating offers.

Meal vouchers, on top of that, are practically expected if you want to be competitive. Skip them and you'll lose candidates to companies that offer them.

The gap between legal minimums and market expectations is real in Italy. You can hire with the bare legal package, but you'll get fewer applicants and higher turnover. If you want to attract and keep good people, budget for 25-28 days of leave, meal vouchers, and at least basic private health insurance.

Italy is one of Europe's most employee-protective countries when it comes to termination. You can't dismiss someone without solid legal grounds, and the consequences of getting it wrong are serious. If you're hiring through an EOR, they'll handle the compliance side, but you still need to understand the rules so you know what's actually possible.

Firing someone in Italy

There are three legal grounds for dismissal in Italy, and the burden of proof sits with you:

Just cause (giusta causa) is the most serious category. It covers significant breaches of contract like theft, violence, or gross insubordination, where continuing the employment relationship isn't possible even temporarily. You can terminate immediately, with no notice required.

Justified subjective reason applies to material breaches that are less severe than just cause, such as repeated minor misconduct or persistent poor performance. Notice is required.

Justified objective reason covers business-driven terminations: company closure, reorganisation, or redundancy. You must give notice and follow the correct procedures.

If you dismiss someone without one of these grounds, or you can't prove your grounds hold up, the dismissal is unlawful. For employees hired before March 7, 2015, that can mean reinstatement plus 12 to 24 months' back pay. For those hired after that date, you're looking at 6 to 36 months' salary depending on tenure and circumstances, though reinstatement isn't automatic.

Certain employees have extra protections. Parents on parental leave, employees with serious illnesses (cancer, chronic conditions, or 74%+ disability), and those on medical leave all have heightened protections. If you dismiss someone during or shortly after parental leave, the burden shifts to you to prove the dismissal was entirely unrelated to the leave and had legitimate grounds. Retaliation claims can cost you €2,000 to €10,000+ in compensation, plus back pay.

Recent case law (March 2026) shows courts take procedure seriously. An employee who fell for a phishing scam causing economic damage was lawfully dismissed. An employee dismissed for refusing to waive accrued vacation days was reinstated with full compensation. Fairness and process matter as much as the reason itself.

One thing worth noting: as of January 1, 2026, the legal threshold for individual dismissals may shift from "proper and weighty reason" to just "proper reason," which could ease termination slightly. Courts are still interpreting this, so don't treat it as a free pass.

Notice periods

The Italian Civil Code sets a baseline of 15 days' notice, but collective bargaining agreements (which apply to most sectors) override this. In practice, notice periods vary widely depending on industry and seniority.

The actual period depends on your employee's sector and role. Your EOR will know which collective agreement applies and make sure you're compliant. Dismissal for just cause is the exception: it's immediate, with no notice period.

Severance pay (TFR)

Severance is mandatory in Italy for all terminations, whether that's a dismissal or a resignation. It's called Trattamento di Fine Rapporto, or TFR.

To put that in context: an employee earning €30,000 per year with 5 years of service receives (€30,000 ÷ 13.5) × (1 + 0.075) = approximately €2,222 × 1.075 = €2,389 base, plus inflation adjustments.

Employers set aside a portion of each employee's salary into a severance fund throughout the employment relationship. There's no cap on TFR, it accrues for the full length of tenure. You can't avoid it through settlement agreements, though you can negotiate a higher lump sum in exchange for the employee waiving other claims (but not accrued entitlements or unused vacation).

Work permits and visas

If you're hiring a non-EU national through an EOR in Italy, the EOR can help move the process along, but sponsorship requirements are strict. Italy doesn't have a straightforward work visa route for most skilled workers.

Non-EU hires typically need one of the following:

Self-employment visa for freelancers and business owners, which requires proof of income and a business plan.

Highly skilled worker visa for specialised roles, though it's limited and requires employer sponsorship plus evidence the role can't be filled by an EU citizen.

Intra-corporate transfer if the employee is relocating within the same company group.

Digital nomad visa (introduced recently) for remote workers earning at least €2,400 per month, valid for one year and renewable.

An EOR can't directly sponsor a work permit, that's your responsibility as the employer. What the EOR can do is handle payroll, tax compliance, and employment contracts that support a visa application. The process typically takes 4 to 8 weeks and requires documentation of the job offer, employment contract, and proof of qualifications.

For EU/EEA nationals, there's no visa requirement. Freedom of movement applies.

Collective bargaining and recent changes

Most employees in Italy are covered by a national collective bargaining agreement (NCBA) specific to their sector. These agreements set minimum wages, benefits, notice periods, and working conditions. You can't go below NCBA standards, even in an individually negotiated contract.

As of October 2025, Italy passed a significant reform (Law No. 144/2025) requiring service contracts to meet NCBA minimum wage standards. This tightens wage floors across sectors and is being implemented through decrees expected by April 18, 2026. When you're hiring, the applicable NCBA for your employee's role and sector needs to be reviewed. Your EOR should handle this automatically.

Employees with serious illnesses gained new protections effective January 1, 2026: up to 24 months of unpaid leave (consecutive or intermittent), job security during that leave, and 10 hours of paid leave per year for medical appointments. This affects how you approach dismissal decisions and flexibility arrangements.

Italy is also implementing the EU Pay Transparency Directive in 2026, which requires clearer disclosure of pay structures and addresses gender pay gaps. Employment contracts must now specify job title, workplace, working hours, remuneration, applicable collective agreement, leave entitlements, and dismissal procedures upfront.