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11. Employee Benefits
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11. Employee Benefits

Social Security

In order to benefit from the pension system, employees are required to provide social security authorities (INPS – National Social Security Authority) with social security contributions. Employers make contributions to the social security authorities for the sector of business in which the company operates. Contribution amounts are around 30% of the employee’s monthly gross salary. In addition, the employer withholds approximately 9% of the employee’s monthly gross salary for social security contributions. Payment of contributions is mandatory, and the parties cannot make any agreements to the contrary.

The maximum salary threshold (determined year by year by INPS) beyond which social security contributions are no longer due exists only for workers registered for the first time with INPS after 1 January 1996, or employees registered with INPS prior to 1996 who elect to take a pension under the contribution system.

Healthcare and Insurances

The duty of the employer to safeguard workers derives from Sections 32, 35, 38 and 41 of the Italian Constitution and from Section 2087 of the Italian Civil Code. The employer is required to adopt all measures which, in light of the specific type of business activity performed, past experience, and techniques used, are necessary to safeguard the psychological and physical integrity of the employees.

Injury at work

The employee is entitled to keep his/her job position after an accident at work. The duration of this leave is set forth in the applicable NCBA.

During such period, the employees are entitled to receive from the employer (i) their full salary for the day on which the accident occurred; (ii) 60% of the salary from the second to the fourth day after the accident.

For any additional period of absence from work, he/she receives from INAIL (National Institution for Insurance Against Work Related Accidents) an indemnity equal to 60% of the salary for the period from the fifth day until the ninetieth day and 75% of the salary for the following period.

To this extent, it is mandatory for the employer to obtain INAIL insurance to cover employees suffering from work related injuries or illnesses. All risks deriving from the working activity are covered by the INAIL insurance, including temporary disability, total or partial permanent disability and death of a worker. The amount of the relevant premium varies according to the type of activity carried out by the employer.

To be eligible for worker’s compensation benefits, the injury has to have occurred during work. Moreover, mandatory insurance covers the injury in itinere, that is, injuries that occur during the commute to and from work; during the travel between two different workplaces (if the worker has two work relationships); and during travel between work and a place of habitual meal consumption (in case of lack of a business canteen).

Professional illness

The worker is indemnified provided that the illness is contracted during the execution of covered activities, the illness is the consequence of progressive damage to the worker’s health, and there is a direct relationship between the illness and the working activity.

When injury or illness occurs, the employee is entitled to receive health benefits (such as medical and surgical treatments and prosthesis devices) and financial benefits. Financial benefits consist of a monetary payment (una tantum) to the employee or their survivors for lost wages due to disability or death.

In general, Italian law provides that the employer is not liable for the accident or injury unless the employer is convicted of a criminal offence for the conduct that caused the injury. In cases where the employer is liable, the worker is entitled to demand damage that was not compensated by INAIL and is entitled to act for restoration against the employer.

Required Leave

Holidays and Annual Leave

Section 36 of the Italian Constitution and Section 2109 of the Italian Civil Code provide for the employees’ right to annual paid vacation. The employee cannot waive this right.

Legislative Decree no. 66 of 8 April 2003 states that the minimum length of paid vacation is four weeks per year. The applicable NCBA may provide for a longer vacation period.

The four-week period have been used for almost two consecutive weeks during the year of time accrued, and the other two weeks (or the remaining higher period provided by the applicable NCBA) must be used within the eighteen months starting from the end of the accrued year. Payment by the employer of the relevant indemnity in lieu of the accrued holidays is not allowed unless the employment relationship terminates.

Under Italian law, employees are also entitled to 11 days of bank holidays.

Maternity / Paternity / Parental Leave

Maternity Leave

According to the ‘Maternity and Paternity Protection’ Legislative Decree no. 151 of 26 March 2001, a mother has the right to paid leaves of absence in order to attend pre-birth tests or medical examinations.

Thereafter, the aforementioned Legislative Decree regulates the periods of mandatory and optional suspension of the performance of work for a pregnant employee.

There is a ban on working during the two months prior to the expected date of confinement (this period may be longer in cases of serious complications in the pregnancy, or in case the working activity is performed in environmental conditions deemed to be harmful to the pregnant worker), and for three months after the actual date of the confinement. During this period, the mother is entitled to an INPS indemnity equal to 80% of the salary. Some NCBAs require the employer to pay the remaining 20% of salary.

The law provides flexibility in the application of the above-mentioned term. Indeed the employee (mother) has the right of abstention from work starting from the month preceding the expected date of birth provided under certification of leak of any prejudice to the health and safety of the mother or the child issued by a doctor of the National Health Service or other relevant doctors.

Furthermore, Law no. 145 of 30 December 2018 provides that, with the above-mentioned certification, the employee (mother) has the possibility to abstain from the work for the whole period of five months following the date of the birth.

Paternity Leave

During the maternity, the working father is entitled to compulsory abstention from work as an alternative to the mother in the following situations: (1) if she does not benefit from it; (2) if she dies or she is affected by a serious illness; (3) if she abandons the new-born baby; or (4) if the father has exclusive custody of the new-born baby.

During this period, which is called alternative paternity leave, the father – as well as provided for the mother – is entitled to an indemnity equal to 80% of the salary.

In addition (even in case the father has benefited from the aforementioned alternative paternity leave), the father is also entitled to compulsory abstention from work: according to the latest law provisions (Legislative Decree no. 105 of 30 June 2022) the working father (also adopting father), from two months prior to the presumed date of birth and within five months thereafter, shall abstain from work for a period of ten working days, also on a non-continuous basis. The leave is also applicable, within the same time frame, in case of perinatal death of the child. The father can decide to access such leave also during the working’s mother maternity leave.

In case of multiple births, the duration of the abovementioned paternity leave shall be increased to twenty working days.

Parental Leave

Under Legislative Decree no. 151 of 26 March 2001, employees are ensured a number of special guarantees during the post-confinement period.

Each parent, during the child’s first twelve years of life, is entitled to parental leave. The overall period of parental leave to which parents, jointly considered, are entitled cannot exceed ten months (save the case in which the father abstains from work, uninterruptedly or fractionally, for at least three months: in this case, the joint maximum leave is increased to eleven months). If there is only one parent, he/she is entitled to a maximum period of 10 months of parental leave.

During this period, until the child is twelve-years-old, the mother and the father are entitled, for three months each, to an indemnity equal to 30% of the salary, raised, alternatively among parents until the child is six-years-old, for the duration of up to one month at the rate of 80%. Additionally, they are entitled to a further three months granted with the same indemnity of 30% to be enjoyed alternatively.

The above parental leave is extended to up to three years of duration for the working mother or father (including an adoptive mother or father) of a severely disabled child.

Moreover, during the first year of life of the new-born baby, the working mother is entitled to two paid break times per day (if the mother’s daily working time is under six hours, she is entitled to one break). Each break time is one-hour long, and the working mother is allowed to leave the enterprise’s premises. When there is a kindergarten or another similar structure inside or close to the enterprise, each break is reduced to thirty minutes.

Such break times are doubled in case of multiple births.

The father is entitled to break time as an alternative to the mother in the following cases: (i) when the child is in his care; (ii) when the mother does not exercise her right; (iii) when the mother is not an employee; (iv) in case of death or serious illness of the mother.

Moreover, during the period of pregnancy, and up to seven months after the child’s birth, it is forbidden for the female employee to be assigned tasks of carrying or lifting weights, or to carry out dangerous, or unhealthy tasks.

Until the child is 3 years old, either the mother or the father is entitled to unpaid leave for the entire duration of the child’s illness; if the child is between 3 and 8 years old, such unpaid leave is limited to five days per year for each parent.

Sickness Leave

According to Italian Labour Law, in case of sickness the employee is entitled to keep his/her job position for a certain period of time that varies accordingly to the applicable NCBA, and it generally lasts one hundred and eighty days in the space of one year (the ‘periodo di comporto’). This period is a suspension of the employee’s contractual obligation to carry out his/her working activity. In case of dismissal not for ‘just cause’ served during the sickness leave, the notice period due to the employee shall begin from the end of such protected period.

During this period, the employees may be entitled to receive their full salary. A portion of the salary is paid by INPS, and the applicable NCBA may require the employer to pay the remaining portion. The NCBAs provide the length of such period and the rate of salary to be paid. They may also require that the protected period is included in calculations of the length of service for seniority and social security purposes.

With regard to the executives, sick leave payments are totally borne by the employer.

In case of absence of a NCBA applied to the employment relationship, Section 2110 of the Italian Civil Code states that the length of such period is determined in accordance with equity.

Disability Leave

Disabled employees may take paid leave of two hours or more per day, for a maximum total leave of three days per month. INPS pays an indemnity to such employees. A complicated system of paid and/or unpaid permits is provided by law for the relatives who assist disabled people.

Any Other Required or Typically Provided Leave(s)

Bereavement Leave

Ministerial Decree no. 278 of 21 July 2000 entitles the employee paid leave when the employee certifies the death of one of his/her family members. This leave may be granted for a maximum period of three days per year. Employees also have the right to leave for the death of a wife or husband, child, or other relatives up to the second degree.

Family Leave

Family leave is available when one of the employee’s family members has a serious infirmity or illness, and the employee documents the need to assist the family member. This leave can be used continuously or in part for not more than two years for the whole period of the working relationship. The applicable NCBA may provide additional leave.

Marriage Leave

Any employee, except during the trial period, is entitled to a special paid leave in case of marriage. Duration of the leave is fifteen days for white-collar employees and eight days for blue-collar employees. Almost all the applicable NCBAs provide for fifteen days of paid vacation. The employee can elect to take compensation in lieu of marriage leave. Marriage leave is compensated at the employee’s regular rate of pay.

Pensions: Mandatory and Typically Provided

Until 31 December 2011, in Italy there were two types of pensions, the old age pension and the length of service pension.

Except for certain categories of employees (e.g., employees carrying out the fatiguing activities set forth by law such as miners), the old age pension accrued when all of the following conditions were satisfied:

  • the employee reached age 65 for men and age 60 for women;
  • the employee had made twenty years of contributions to INPS; and
  • employment terminated.

The system for the calculation of the old age pension varied according to the number of years the worker had contributed as of 31 December 1995. There were three ways to calculate benefits:

  • the contributions system, for those who were firstly employed after 31 December 1995;
  • the salary system for those who as of 31 December 1995 had a total length of service of eighteen or more than eighteen years;
  • the mixed system (salary and contributions), for those who as of 31 December 1995 had a total length of service of less than eighteen years.

The length of service pension was payable prior to the age for the old age pension. The necessary requisites were as follows:

  • the employee made thirty-five years of contributions to INPS;
  • the employee was 60 years old (or 59 years old and forty years of contributions had been made);
  • employment terminated.

In addition, the length of service pension could only be taken during specific dates or ‘exit windows’.

In July 2009, the quota system was adopted. Under this system, a person obtained the right to a length of service pension upon reaching a certain sum between chronological age and contribution (at least thirty-five years of contributions).

As of 1 January 2012, the only applicable system of calculation of pension is the contributions system (i.e., based on the contributions actually paid by the employee over his/her entire working life).

In addition, the length of service pension has been repealed and substituted by a so-called anticipated pension (requiring forty-one years and ten months of contributions for women and forty-two years and ten months of contributions for men).

The requirements to obtain an old age pension are as follows:

  • the employee must be 67 years of age (men and women); these age requirements are yearly increased based on the life expectancy;
  • the employee has paid contributions for at least twenty years;
  • employment terminates.

On an experimental basis for the three-year period 2019-2021 the government has introduced a new calculation system to accrue the right to the pension. It is called ‘quota 100’, and it has been issued by Law Decree no. 4 of 28 January 2019.

The requirements to obtain the pension under the above provisions, to be met within 31 December 2021, were as follows:

  • the employee must be 62 years of age (men and women);
  • the employee has paid contributions for at least thirty-eight years;
  • employment terminates.

Those employees who have met the requirements within 31 December 2021, may exert their right to access ‘quota 100’ even after 31 December 2021.

Starting from 1 January 2022, ‘quota 100’ has been replaced with ‘quota 102’.

The requirements to obtain the pension under the above provisions are as follows:

  • the employee must be 64 years of age (men and women);
  • the employee has paid contributions for at least thirty-eight years;
  • employment terminates.

On an experimental basis starting from 1 January 2023, “quota 103” has been introduced replacing “quota 102” (pursuant to Section 14.1 of Law Decree no. 4 of 28 Jan. 2019, as introduced by section 1, para. 283 of Law no. 197 of 29 December 2022).

The requirements to obtain the pension under the above provisions are as follows:

  • the employee must be 62 years of age (men and women);
  • the employee has paid contributions for at least forty-one years;
  • employment terminates.
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