Are You Protected by Italian Labor Laws
If offered a relocation or international assignment in Italy, it can be complicated to know what labor protections you are entitled to. There are many factors, but if you are working in Italy, Italian labor laws do apply.
Location Determines Law
Labor laws are dependent on the location. The law of the country where the work is physically performed, governs the employment relationship. If you are working in Italy, even for a US company, you fall under the Italian labor jurisdiction.
Employment Contract
The structure of the employment contract plays a significant role in determining which country’s labor laws apply to you. There are three types of arrangements for international assignments.
In a temporary assignment, you remain employed by the US company but are sent to work in Italy for a limited period. In this situation, your US contract continues, but certain Italian labor protections will still apply, specifically those that are mandatory under local or European Union law.
If you are locally hired by an Italian branch or subsidiary and reviewed a new Italian employment contract, your employment will be fully governed by Italian labor laws. This includes everything from working hours and wages to notice periods and dismissal rights.
In some cases, employees hold dual contracts, one with the US employer and another with the Italian entity. These situations can be complex, but if your work is performed in Italy, Italian law will apply to that part of your employment.
Mandatory Labor Protections in Italy
Italy provides strong legal protections for employees, many being non-negotiable and apply regardless of the terms of your original contract. For example, Italian law ensures workers receive minimum wage standards, which are typically set by industry-specific collective agreements rather than a universal statutory wage.
Employees are entitled to limits on working hours, mandatory rest breaks, and at least four weeks of paid vacation per year. There are also robust provisions for paid sick leave, maternity and paternity leave, and protections against discrimination in the workplace.
Severance pay accrues annually and must be paid out when the employment relationship ends, regardless of the reason for separation. Italian labor law also defines minimum notice periods for termination and prohibits unjust dismissal, offering substantial job security for employees.
Additionally, most employees in Italy are covered by a collective bargaining agreement, which establishes additional rights and benefits based on the industry and job category.
EU Posted Workers Directive
If you are temporarily sent to Italy under a US contract, the European Union’s Posted Workers Directive provides that you must still receive certain core protections. These include limitations on working hours and mandatory rest periods, as well as minimum requirements for paid vacation time.
Health and safety standards must also be upheld, and protections against workplace discrimination must be observed. In addition, you must receive the minimum wage applicable to Italy, regardless of your contract’s country of origin.
The directive ensures that foreign workers posted within the EU are not treated less favorably than local employees, even if their primary employer is located outside the EU.
Tax and Social Security Considerations
In most cases, you will also need to contribute to Italy’s social security system. However, the United States and Italy have a totalization agreement that may allow for certain exemptions, preventing duplicate contributions to both countries’ systems.
A tax treaty between the US and Italy is also in place to prevent double taxation.
Nevertheless, even if the treaty reduces your tax burden, you may still need to file returns in both countries. For this reason, it is recommended that you consult a tax advisor with experience in cross-border employment.
Working in Italy can also trigger tax and social security obligations. If you spend more than 183 working days in a calendar year in Italy, you may be considered a tax resident and have to pay Italian income tax on your global earnings.
Consult Leal or HR Experts
Given the complexity of international assignments, you should speak with your company’s HR department and, if needed, seek independent legal advice. Reviewing your employment agreement carefully, along with any assignment letters of local terms, is crucial.
In some cases, obtaining a legal opinion from an attorney familiar with Italian labor law can be helpful, particularly if you are negotiating the terms of your relocation or want to protect certain rights acquired under your contract.
Moving Forward
If your company relocates you to Italy, you will at least be partially protected by Italian labor laws. The extent of those protections depends on your contractual agreement, the nature of your assignment, and how long you will be in Italy.
In most cases, Italian standards related to working conditions, wages, leave, and termination will apply once you are working in Italy. By clarifying your employment status and understanding the legal framework in advance, you can ensure that your transition is smooth, compliant, and secure.
Madeleine Kiel
