17 March 2008

Better Know A Strange Labor Law: Italy

This is the first installment of our new series "Better Know A Strange Labor Law".

The labor laws in your own country may not always make sense to you, but at least you're used to them. If you start working in another country however, you will encounter labor laws which may seem a bit strange.

(Please also read the disclaimer at the bottom of this post)

Italy: The Country
Italy is a country in Southern Europe and looks like a boot. The Italians (back then Romans) were famous for their bloody entertainment long before Hollywood (gladiators and lions). Italians are crazy about football but you mustn't mention the word "soccer". Awesome food, beautiful women, great weather.

: The Crazy Labor Law
"Trattamento Di Fine Rapporto" (TFR) is difficult to translate, but "end-of-service payment" comes quite close.

If an employee leaves your company, you will have to pay the equivalent of roughly one monthly salary per year of service. Some consider this a severance payment, but the money is also due in case of resignation.

If you start a company in Italy, make sure that your local adviser doesn't only explain the costs for base salary, social security and pension, but also ask him about the different mandatory accruals and their consequences.

Since 2007 companies with 50 or more employees must pay the TFR into a pension fund, which is easier to understand.

I ain't no lawyer. This doesn't constitute in any way, shape, form or size legal advice. I got all my information from Google ads and TV commercials. If you really, really need serious advice, contact a lawyer. But first tell him your favorite lawyer joke. If he laughs, find a real lawyer.

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