Italy’s workforce is evolving to meet the demands of a fast-changing global economy. With a growing number of professionals skilled in artificial intelligence, cybersecurity, cloud computing, and digital marketing, it’s no surprise that American companies hiring in Italy are targeting roles in tech, business services, and product development.

For fast-growing companies in the United States, expanding into Italy can help access specialized talent while establishing a presence in the European market. Whether you are hiring for remote roles or looking to build a local team, understanding the local employment landscape is essential.

This guide explores how to hire in Italy, covering the most common hiring methods, legal requirements, and employer responsibilities. We also explain how Payoneer Workforce Management can help simplify the hiring process for companies that want to hire employees in Italy without setting up an entity.

Options for U.S. companies hiring in Italy

When it comes to how to hire and pay remote employees in Italy, there are several methods to consider. We break down the most common approaches below.

1) Set up a legal entity in Italy

Setting up a legal entity in Italy allows U.S. companies to directly hire employees in the country. To register a legal entity, companies need to file with the Italian Chamber of Commerce, appoint a local representative, and secure a tax identification number. You also need to open a local bank account and register for VAT. These steps can take several weeks to complete.

This approach can offer more control over operations and employees, but it is expensive and time-consuming. Additionally, there are significant administrative burdens involved in setting up and maintaining a legal entity. For companies looking for a fast or flexible solution, this option may not be ideal.

2) Hire contractors in Italy

Another option is to work with independent contractors in Italy. This model is suitable for short-term projects or clearly defined, limited-scope work. However, companies must take care not to misclassify employees as contractors. Misclassification can result in fines, back pay, and other penalties. It is important to follow Italian labor guidelines to determine the correct worker classification.

3) Use a workforce management platform

Typically, an employer of record (EOR) may help in foreign countries; however, the EOR model may not be permitted or recognized in Italy, so you can use a workforce management platform like Payoneer Workforce Management instead.

A workforce management platform is a third-party service provider that acts as the legal employer for talent in Italy, while your company manages day-to-day operations. This approach allows you to hire employees in Italy without setting up an entity. The workforce management platform helps take care of legal, tax, payroll, benefits, and compliance matters, mitigating the risks of non-compliance with Italian employment laws. 

This can be a great option for U.S. companies hiring in Italy, as it helps simplify the process and reduces the administrative burden.

Learn more about how a workforce management platform can help.

Where to find employees in Italy

Now that we’ve covered how to hire employees in Italy, let’s look at the best ways to source candidates.

Popular job boards in Italy

There are several platforms where you can advertise open positions in Italy:

• LinkedIn: A popular platform for professionals in Italy, LinkedIn allows you to post job openings and directly engage with potential candidates.
• Indeed Italy: A widely used job board, Indeed is an excellent option for reaching a large audience of job seekers.
• Monster Italia: This platform is also a go-to resource for businesses looking to hire in Italy.
• InfoJobs: One of the largest job search engines in Italy, InfoJobs is ideal for reaching candidates across various industries and experience levels.
• Jobrapido: A job aggregator that pulls listings from multiple sources, Jobrapido helps you expand your reach quickly.
• TrovoLavoro: Operated by Corriere della Sera, it caters to job seekers looking for white-collar and office-based roles.
• Bakeca: A general classifieds site in Italy that also includes a robust job section, suitable for entry-level and blue-collar positions.

You can explore more job boards specific to Italy for tailored recruitment strategies.

Work with local recruitment agencies

If you need to source employees quickly or want help navigating the local job market, working with a recruitment agency in Italy can be a great option. Local agencies have deep insights into the talent pool and can help you overcome language barriers and cultural differences. However, it’s important to note that using a recruitment agency adds an extra cost to your hiring process.

Recruit with the support of a workforce management platform

For companies that prefer not to handle recruitment and compliance on their own, partnering with someone like Payoneer Workforce Management may help simplify the process. Your company still manages candidate selection and drives the recruitment process, while Payoneer Workforce Management helps handle tasks such as employment contracts, onboarding, and payroll. This can save time and reduce the risk of non-compliance, especially when you’re hiring employees in Italy without setting up a local entity.

Onboarding employees in Italy

Once you’ve selected your candidate, it’s time to onboard them. Below are key elements to consider when onboarding employees in Italy:

• Prepare required documents: Ensure that employees provide necessary documentation such as identification, address proof, and education or employment certificates.
• Cultural tips: Familiarize yourself with Italian work culture to build better relationships and set realistic expectations.
• Bilingual materials and training: If you’re hiring employees who speak Italian as a primary language, consider offering bilingual training materials and documents.
• Set up payroll, benefits, and leave systems: Ensure that payroll and benefits systems are ready to handle local regulations and entitlements.

Key employment laws and requirements in Italy

U.S. companies that hire employees in Italy must understand the legal framework that governs employment. It is important to be aware of key employment laws to manage contracts, benefits, payroll taxes, and terminations correctly. Below is an overview of the most important aspects.

Employment contracts

Italian labor law requires that every employee be provided with a written employment contract prior to starting work. The contract is a critical document that outlines job duties, salary structure, working hours, and benefits. 

Some key elements of employment contracts in Italy include:

• Job title and a detailed description of responsibilities
• Agreed salary and payment schedule
• Working hours and the specified location of work
• The duration of the contract, whether permanent or fixed term
• Notice periods and probation periods, if applicable
• Details of benefits such as leave entitlements, healthcare, and pension contributions

Different types of contracts exist, including permanent, fixed-term, and part-time contracts, each with specific legal requirements. 

Employee benefits

Employee benefits in Italy are a critical part of the overall compensation package for any new hire. Some benefits, like paid leave and pension contributions, are mandatory, while others, such as meal vouchers or private health insurance, are commonly offered to stay competitive in the local job market.

To make the process of hiring employees in Italy smooth, you need to understand the statutory benefits that the law provides. These include:

• Vacation and PTO: Employees are entitled to at least 4 weeks of paid vacation per year.
• Sick leave: Up to 180 days, employees on sick leave are generally entitled to compensation through Italy’s social security system (INPS).
• Maternity leave: Female employees are entitled to 5 months of maternity leave, which is usually paid, with 80% reimbursed by INPS, usually split into 2 months before and 3 months after childbirth.
• Public holidays: There are 12 national holidays in Italy, during which employees are generally entitled to time off.
• Pension and social security: Employers are required to contribute to Italy’s social security system, which covers pensions, unemployment, and other benefits.

Working hours and overtime

The standard working day in Italy is typically 8 hours, and the standard working week is 40 hours. Any time worked beyond this is considered overtime and must be compensated according to applicable agreements. The maximum daily working time cannot exceed 13 hours, including overtime (capped at 250 hours per year), rest, and breaks.

Tax obligations

When you hire employees in Italy, you are responsible for withholding and contributing to several taxes on behalf of your employees. These include:

• Income tax, known in Italian as L’Imposta sul reddito delle persone fisiche (IRPEF): Employers must withhold income tax from employee salaries based on progressive rates. Learn more about the current rates on the Agenzia delle Entrate website.
• Social security (INPS): Contributions fund pensions, healthcare, unemployment benefits, and other protections.

In addition to national taxes, employers may also be required to pay regional and municipal taxes depending on the employee’s place of work.

Termination and severance

Terminating employment in Italy involves adhering to a regulated process that ensures the rights of both the employee and the employer are respected. Italian law requires that terminations be based on either just cause or justified business reasons. Employers are required to provide clear documentation and follow set procedures in the event of termination, which may include offering severance pay.

Notice periods typically range from 15 days to several months, depending on the employee’s role and seniority. Dismissals are permitted for just cause, business-related reasons, or serious misconduct.

The concept of severance in Italy, known as the end of service allowance, is calculated based on factors such as length of service and earnings. It is important for U.S. companies hiring in Italy to understand the grounds for dismissal and the associated obligations.

Employees who wish to resign must follow a formal resignation process, typically submitted online through the official national portal.

Payoneer Workforce Management helps hire employees in Italy

Hiring employees in Italy doesn’t have to be complicated. With Payoneer Workforce Management, you can hire, onboard, and pay employees in Italy quickly and compliantly, without the need to set up a local entity.

Payoneer Workforce Management helps simplify the process by handling the complexities of hiring, payroll, taxes, benefits, and compliance in over 160 countries. Our platform allows American companies hiring in Italy to:

• Onboard employees in Italy efficiently
• Run global payroll with just a few clicks
• Stay compliant with local employment laws
• Manage taxes, benefits, work permits, and more

Request a demo today.

FAQs

1) Can a U.S. company employ someone in Italy?

Yes, U.S. companies can hire employees in Italy. There are various options for U.S. companies hiring in Italy, including setting up a legal entity, hiring contractors, or partnering with a workforce management platform.

2) How to hire and pay remote employees in Italy as a U.S. company?

To hire and pay an Italian employee for a U.S. company, you can either set up a local entity in Italy, hire them as a contractor, or use a workforce management platform. Each method has its own benefits, depending on the size of your company and how quickly you need to onboard talent.