Guide to living and working in Italy

Italy

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Country Overview

 

Population

58.1m

Unemployment Rate

5.9% (11/07)

Average annual unemployment rate 1992 – 2007

9.9%

GDP

€1,417bn / $2,054bn

GDP per head

€20,929 / $30,340

Capital

Rome

Major language

Italian

Life Expectancy (UN)

78 years (men)

83 years (women)

Monetary unit

1 euro = 100 cents

Internet domain

.it

International dialing code

+39

 

Italy has a diversified industrial economy. There is a clear distinction between the developed and industrialised North, which is dominated by private companies and the less-developed, welfare-dependent, agricultural South, with 20% unemployment. Italy imports than 75% of its energy requirements and most raw materials for industry. Over the past decade, Italy has pursued a tight fiscal policy in order to meet the requirements of the Economic and Monetary Unions and has benefited from lower interest and inflation rates. Italy's national debt remains above 100% of GDP, the government has not been able to bring the budget deficit down to a level to decrease it. The economy is to growing less than the Euro-zone average and growth is expected to decelerate from 1.9% in 2006 and 2007 to under 1.5% in 2008 as the Euro-zone and world economies slow.


The Economy

 

Industries include: tourism, machinery, iron and steel, chemicals, food processing, textiles, motor vehicles, clothing, footwear, and ceramics.

 

Pay

 

 

Human development Index

 

Ranking:  20th
Index value:  0.941

The Human Development Index combines statistics on GDP, adult literacy, average years of schooling and life expectancy to provide an indicator of human development. The HDI shown here gives the ranking of 24 countries among 177. See http://hdr.undp.org/en/ for more information.

 

Getting a job

Overview of the labour market:

Lazio region: In Lazio the participation rate in the labour market is 63.3%, the employment rate 58.4% and the unemployment rate 7.7%. These figures are similar to national average levels. Self-employment is concentrated not only in agriculture (55.4%) but also in building and construction (36.8%). Part-time work is conducted mainly by women (27.2% of women have part-time contracts, compared with 6.6% of men), especially in services (27.9%), in which 91% of female jobs are concentrated. Fixed-term contracts are also more likely to be held by female workers (13.5%, compared with 9.8% for men) and are most common in agriculture, building construction and services. Employment in the service sector has predominated in the Lazio Region for many years and currently accounts for 79.8%, against the national average of 65%.
In terms of educational qualifications, unemployment is highest among those with the lowest educational levels. There is also higher unemployment for those with qualifications based on longer periods of study (7.2%, against 6.8%).

When analysing the regional labour market by province, Rome occupies a unique position. On an economic-sector basis, services account for the highest proportion of jobs in Rome, while representation of the services sector in Frosinone is 61%. Frosinone also has the highest proportion of people employed in industry. Latina, on the other hand, is the province with the highest proportion of agricultural jobs (4.6%), while it is in second highest place in terms of industry (25.8%), closely followed by Rieti Province (25%).

Applying for a job:

You can apply for a advertised position or send in an application on spec. Sometimes your first contact may be by telephone, either directly with the company or the person responsible for recruitment (employment services, private agencies, staff recruitment companies etc.) Your CV should be written using the standard European format, accompanied by a covering letter. Unless specifically requested, you do not need to include a photo or any qualifications, references etc. For smaller businesses (especially it the hospitality and retail industries), it may be a good idea to turn up in person and leave your CV with the human resources or general manager. Getting many jobs in Italy really does depend on who you know. If you have friends, acquaintances or other contacts talk to them about the fact you are looking for work, they may be able to help.

 

Conditions and rights

Employment law:

The Italian constitution recognises the central role of work in the social life of the country and there is a strong legal framework for working conditions, the right of association and equality of opportunity. In Italy there are many different instruments that may be used to introduce a new legal requirement - from 'Decreto Legge' that last for only three months to 'Delega Legislativa' that are frequently mistaken for full legal statutes, but are actually just blueprints for a potential law (Decreto Legislativo). On top of these parliamentary measures are regulations (regolamento) in five different forms, ranging from 'Derecto del Presidente della Repubblica', which do not require prior authorization by a law, to 'circolare', which simply instruct civil servants how to operate.

Working hours:

Standard hours: The normal working day is set at 40 hours for each seven day period. Collective contracts may agree a normal working period of less than 40 hours. The number of hours worked per week cannot exceed 48 hours, including overtime. This limit is calculated over a seven day period, within an averaging period of no more than four months.

Holidays and leave:

Holidays (paid leave) are usually defined in collective agreements, but typically workers get four weeks of paid leave for every full year worked.
Female and male workers are entitled to paid leave of three working days per year in the event of serious illness or death in the family. Continuous or discontinuous leave of up to two years may be allowed for serious, documented family reasons. The worker is not entitled to receive a salary and the period is not taken into consideration when calculating service seniority for social security purposes.

Maternity leave: Women may stop working two months prior to and three months following the expected date of childbirth. During maternity or paternity leave, a daily allowance is granted equal to 80% of the last salary paid through the social security system [INPS], including any other sickness allowances due.

Parental leave: During the first 8 years of the child’s life, the parents are entitled to take up to 6 months of the year off work. During the period of parental leave, a daily allowance equal to 30% of the last salary payment is paid for up to six months. During the working day, special paid leave is granted to attend prenatal tests and check-ups.

Leave due to child’s illness: During the first 8 years of a child’s life, the parents are entitled to be absent from work when their child is ill. A working mother is entitled to a daily rest period for breast-feeding upon application to her employer.

Public holidays: 1 January, 6 January, Easter Monday, 25 April, 1 May, 2 June, 15 August, 1 November, 8 December, 25 December and 26 December.

 

Contracts

Types of employment:

The minimum age for starting work in Italy is 15. There are three main types of contract:

  1. Permanent and temporary subordinate employment contracts with obligatory working hours, workplace and duties. This type of contract may be extended only once.
  2. Extendable employment contracts, which are flexible forms of temporary employment.
  3. Freelance employment contracts for professionals, consultants and professional activities, including manual trades, with full autonomy over working hours and methods.

Employment contracts:

An employment contract is compulsory by law in Italy. The following information must be given: 

  • worker’s details 
  • tax information
  • worker’s qualifications 
  • professional profile

The system of direct employment is applicable in Italy for any type of working relationship for all employees (with the exception of non-EU workers). Working agreements are drawn up without the aid of public departments. The employers must send compulsory notifications to the Job Centre covering the place of work, on the day before the hiring date. The employer must also give the worker a signed statement containing data recorded in the company employee register giving information on the financial and legal employment conditions applied to the current working relationship. The employment contract may only be amended to improve the worker’s conditions, and then only with his or her consent.

 

Visas and work permits

Visas:

Residents of the EU/EEA, the United States of America, Canada and a number of other countries do not require a visa to enter Italy. Residents of other countries do need a visa. In most cases a passport must be valid for at least 6 months past the date on which the visa will start.

Italy is a member of the Schengen signatory countries. The 15 Schengen countries are: Austria, Belgium, Denmark, Finland, France, Germany, Iceland, Italy, Greece, Luxembourg, Netherlands, Norway, Portugal, Spain and Sweden. With a Schengen visa, you may enter one country and travel freely throughout the Schengen zone.

Passport holders from the following countries do not need a visa to visit Italy or other Schengen countries: Andorra, Argentina, Australia, Bolivia, Brunei, Bulgaria, Canada, Chile, Costa Rica, Croatia, El Salvador, Guatemala, and Honduras. Israel, Japan, Republic Of Korea, Liechtenstein, Malaysia, Mexico, Monaco, New Zealand, Nicaragua, Panama, Paraguay, Romania, San Marino, Singapore, Switzerland, United States, Uruguay, Vatican and Venezuela.

Nationals of countries not mentioned above will need a visa to visit Italy.

Work permits:

A foreign resident who wants to work in Italy must obtain a work permit. A work permit will only be granted to a skilled worker, with no criminal record,  and who will not present a threat to local employment or employment of EU workers. Work permits are granted when the applicant is outside Italy when the application is made. The work permit is granted for a maximum of one year, after which it can be extended if necessary and with the continuation of employment.

EU residents: do not require a visa to work in Italy, but need a residence permit.

‘New’ EU Member Countries: Italy does not apply any restrictions on the access to its labour market by citizens of other EEA countries including the ‘new’ EU Member Countries (Estonia, Latvia, Lithuania, Poland, Slovenia, Hungary, Slovakia and the Czech Republic).
Non-EU citizens: must obtain a work visa or permit to work in Italy. 

 

Tax, social security and healthcare

Taxation system:

Taxation of an individual's income in Italy is progressive: the higher the income, the higher the rate of tax payable. In 2008 the income tax rate for an individual is 23-43% depending on the level of earnings. In addition to direct taxation (IRPEF), there is also local tax (IRAP), which is not payable by foreign residents employed in Italy.

There are reduced rates of tax and tax exemptions available for low income earners and special cases.

The standard rate of Italian corporate tax (IRPEG) has been reduced and in 2007 it is 31.4% (standard 27.5% + local tax (IRAP) 3.9%).

An individual is liable for tax on his income as an employee and on income as a self-employed person. Tax is payable on income earned in Italy and overseas by an individual who resident in Italy. A foreign resident who is employed in Italy pays tax only on income earned in Italy. To be considered an Italian resident: you must be living in Italy more than 183 days a year in Italy and be registered at the census office.

In regards to taxable income from outside Italy, a "tax credit" is granted for tax deducted outside Italy. In the case of income from a salary, the employer is obligated to deduct the amount of tax payable on a monthly basis. A self-employed person must prepay income tax that will be offset on filing an annual return. The advance payment is determined on the basis of the return made for the previous year. In the event of a new business, the advance will be calculated on the basis of estimates made by the owner of the business.

Italy individual income tax rates 2008:

Income Band (€)

Tax (%)

0 – 15,000

23%

15,001 – 28,000

27%

28,001 – 55,000

38%

55,001 – 75,000

41%

75,001+

43%


Social security system:

People must normally be in employment before gaining access to the Italian welfare system. The employer pays contributions and deduct the employee’s contributions directly from wages. The INPS (National Social Security Institute) is the national welfare institute responsible for social security and welfare benefits. Social security benefits are determined on the basis of compulsory insurance payments that are funded by the collection of contributions (old age pension, pension for seniority, survivor’s pension, disability allowance, pension for the unskilled and pension agreed by international convention for work performed abroad).

Welfare benefits are designed to supplement income: unemployment, sickness, maternity, workers’ benefit fund, severance payment and family allowance. For employees, the employer must complete all the paperwork required to register with the welfare department. The workers’ contributions are deducted from the gross wage. Self-employed workers must register and pay contributions to a separate social security fund or directly to the INPS.

Health system:

In Italy, all citizens, residents and foreigners in possession of specific requirements have the right to general medical assistance provided by a general practitioner, and for those under 14, a paediatrician. A citizen of a European Community country arriving in Italy with a European Health Insurance Card has the right to receive urgent medical treatment free of charge (this system is not meant to support regular medical care or the treatment of chronic conditions). If they present their card to the relevant local health authority they can receive medical treatment equivalent to that available to an Italian citizen. At the time of registration with the national health system, a health card is issued which must be presented in order to receive future health services.

 

Lifestyle:

Italy is one of the most beautiful countries in the world, with cities and countryside that has made it world wide tourism favourite. As an ex-pat, though, rather than a tourist, you will be exposed to some the frustrations associated with living and working in a Mediterranean country with a mixed performing economy and political instability.  Speaking Italian is almost essential for success here. There are large numbers of ex-pats living in cities across the country and it is a popular destination for holiday home owners, so the number of foreigners swells in summer.