As your company grows, you may hire globally to meet new demands and growth goals. Many employers turn to independent contractors to complete projects and improve internal processes, but this classification must...
Read MoreAs your company grows, you may hire globally to meet new demands and growth goals. Many employers turn to independent contractors to complete projects and improve internal processes, but this classification must follow the law. Learning about independent contractors and your responsibilities as an employer can help you drive your success in new countries.
Reading Time: 3 minutes
As your company grows, you may hire globally to meet new demands and growth goals. Many employers turn to independent contractors to complete projects and improve internal processes, but this classification must follow the law. Learning about independent contractors and your responsibilities as an employer can help you drive your success in new countries.
Independent contractors can offer a range of specialized skills for your company, but you must understand various conditions to ensure a fair and legal relationship.
According to Italian Civil Code, an employee is defined by:
Independent contractors often cooperate with a company and commit to remuneration, but their operations should not be under the employer’s control. Other distinguishing features of an independent contractor include:
While independent contractors in Italy are not entitled to most mandatory benefits outlined in the labor laws or in collective agreements, they are entitled to parental leave.
Misclassifying employees as independent contractors interferes with their entitlement to statutory benefits. In the event of a misclassification, an employer will be required to pay past-due social security contributions, damages, and fines associated with the error. Employers may also have to establish a formal employment relationship and add the contractor to their official payroll.
The contractor hiring process should involve three key steps.
Interviews with employees often involve questions about character traits because these individuals will contribute to company culture. Independent contractor interviews are more similar to business transactions. Focus your questions on skills and experience that can contribute to the project, as interest in personality traits may indicate a more permanent relationship.
When creating your advertisements for the job, make it clear that you’re searching for an independent contractor to attract the right individuals. You can also use your ads to describe the project, the duration, and practical skills for completion.
Instead of a contract of service, employers must create a contract for service. This service agreement will lay out any terms of the professional relationship and ensure clarity between both parties. Terms to include are:
Extensive training programs can signify employer control over project completion, but you may offer a brief introduction to your company for your contractors. After establishing your service agreement, you can introduce your contractor to key players in the project, company tools they may use, and essential workflows.
Payment arrangements will depend on the terms established in the service agreement. Many contractors will request a lump sum for completing the specified project, but there may be other stipulations to work with.
Employers are still responsible for deducting income tax from independent contractor pay, and their remuneration will also include Value Added Tax (VAT). However, employers are typically not responsible for making social security contributions for these individuals. Generally, independent contractors will pay their own social security contributions.
In some cases, employers may be responsible for making a small social security contribution.
Independent contractors generally do not receive any termination protections. In some cases, notice or payment in lieu of notice may be required. Employers can outline termination expectations in the service agreement regarding notice, written notifications, or other stipulations.
As an extension of Globalization Partners’ Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere, for both short- and long-term projects. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
–
THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE.
You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.
If you’re ready to grow your business, or you have questions about a specific country, complete the form. One of our experts will be in touch shortly.
