Italian employees hired by foreign companies with a local contract must carefully evaluate the social security obligations which vary according to the country where the employee is hired.

In such circumstances, a distinction must be made between:

• EU countries, countries adopting EU legislation via specific agreements with the European Union countries with which Italy has entered into full Totalization Agreements: the employee is required to pay contributions in the host country as per the local legislation
• Countries Italy has entered into partial Totalization Agreement with: the employee is required to pay contributions in the host country in accordance with local legislation. In addition, the employee is obliged to pay “minor” social security contribution in Italy
• Countries Italy has not entered into Totalization agreements with: Italian employees hired in countries without Totalization Agreements with Italy are subject to a minimum protection, with registration in specific mandatory pension schemes and the consequent obligation to pay the related contributions as per Law n. 398/1987.

The individuals affected by this law are Italian employees hired by foreign companies

Finally foreign employers must undertake the contribution obligations regarding the following insurances:

• invalidity, old age and survivors’ insurance
• involuntary unemployment insurance
• health insurance
• maternity insurance
• insurance against accidents at work and occupational diseases;
• guarantee fund for severance pay.

Finally, in order to reduce the contribution burden resulting from the possible payment of local contribution in the foreign country, 10% discount in the Italian social security rates is allowed.

For any questions please contact us