In Italy, pensions are operated by INPS and fed by salary-based contributions paid by both the employer and the employee. For employees who started working after January 1, 1996, the amount of salary to be taken into account for the purposes of calculating the pension contributions is capped at an annually determined amount depending on cost of living increases. Receipt of pension benefits is contingent upon payment of the social security contributions provided for by the law. For employees, the pension is linked to the amount of contributions paid as a percentage of the employee’s global salary during an entire working life.
In certain specific cases provided for by law (e.g. periods of leave), in order to allow the employee to reach the minimum pension requirements, the contribution is directly paid by the government. In other cases, such as the interruption or the termination of work (from lack of work during one’s working life or retirement before retirement age) the contribution due by law can be directly paid by the employees.
Healthcare and Insurances
Protection of workers who suffer accidents or occupational illness is primarily controlled by the INAIL (National Institution for Insurance Against Work Related Accidents).
There are approximately 11 public holidays in Italy and an additional four days that used to be public holidays, but are now working days on which workers are paid double time.
Under Italian law, employees are entitled to annual holidays and establishes that the minimum length of annual holidays is four weeks per year, but the applicable NCBA may provide for a longer term. The four-week period must be used for at least two consecutive weeks during the same year, if requested by the employee, and the remainder of the weeks must be used within 18 months of the end of the accrual year.
Except in the case of the termination of employment, an employer cannot replace the right of the employees to benefit from the minimum annual holiday entitlement with payment in lieu thereof. On the other hand, it is possible for the employer to pay the indemnity in lieu only with regard to the annual holidays exceeding the above-mentioned minimum period of four weeks.
Female employees cannot work during the 2 months prior to the planned birth of the child (3 months in case of dangerous jobs, listed by the Minister), and during the 3 months following the birth. Upon permission released by the competent doctor, the maternity leave can start 1 month before the planned birth and finish 4 months later. During the maternity leave, the employee is entitled to 80% of her regular salary, which is paid by the employer who then claws back such amounts from INPS. At the end of the maternity leave, the mother has the right to come back to the same job position she left and at the same/better conditions, and until the child is one year old, entitled to work in the same office or at least, in the same city.
The father is entitled to paternity leave, on the same terms and conditions as in the case where the mother is seriously mentally injured, and for the residual duration if the mother dies or abandons the child.
During the first 12 years of the child, each parent is entitled to a period of absent from work of 6 months. If both parents take the parental leave, then they are entitled to a maximum period of 10 months combined. If there is only one parent, he/she is entitled to a parental leave of 10 months. If the parental leave is taken during the first 6 years of age of the child, INPS provides an indemnity equal to 30% of the regular salary for a maximum period of 6 months of parental leave, combined between both parents.
During the first year of age of the child, the mother is entitled to 2 paid hours a day to feed the child (1 paid hour a day if the working day lasts less than 6 hours). Such time off is granted to the father if: the child is in his care, the mother does not take them, the mother does not work, the mother is dead or is seriously mentally injured. The above rights are granted in case of adoption as well.
Sickness Leave and Disability Leave
In case of sickness and disability, the employee is entitled to a period of sick leave and during this time, the employee cannot be dismissed, unless for just cause or closure of the company. At the end of the leave, the employee is entitled to come back to the same job position he/she left and on the same/better conditions.
Pensions: Mandatory and Typically Provided
In 2010, the Italian pension system introduced the “floating window” which means that, effective as from January 1, 2011, the government will start paying the pension to a retired employee only 12 months after the date on which such individual achieved the requirement for retirement eligibility and actually elects to retire. In 2011, another reform to the pension system was enacted, providing for the following:
For individuals working prior to January 1, 1996
“Pensione di vecchiaia” – termination of employment (possibility to work as self-employed); attainment of age 65 and 7 months for women or 66 and 7 months for men (from January 1, 2016); and a minimum period of contributions paid over 20 years.
“Pensione anticipata” – Law No. 214/2011 changed the requirement for length of contributions with the pensions system to achieve the pensione di anzianità, providing a minimum contribution of 41 years and 10 months for women and 42 years and 10 months for men.
For individuals who started work on or after January 1, 1996
“Pensione di vecchiaia” – termination of employment; attainment of age 66 and 7 months for men or 65 and 7 months for women, along with a minimum contribution term of 20 years; or attainment of age 70 and 7 months for both women and men, along with a minimum effective contribution term of 5 years.
“Pensione anticipata” – a minimum contribution of 41 years and 10 months for women and 42 years and 10 months for men; or attainment of age 63 and 7 months for both women and men, along with a minimum effective contribution term of 20 years.