The Italian Economic Business Model
The Italians are still and have been famous for many things: Ferrari, Fiat, Pizza, Pasta, Roman Empire and Sophia Loren, but for business economics, they are not. In fact, like other nations, they are seriously close to defaulting and needing a bailout from Germany.
Many businesses(25%) in Italy try to remain small and find ways in being a creative bookkeeper for accounting. With unemployment of 10%, the Italian government it looking within for answers. They should because they are the ones that created the maze of law that force businesses into this mode.
About 66% of what an employer pays goes to social security and once your small biz hires the 16th employee, a series of laws enter into the equation. The worse one is that it becomes near impossible to fire\dismiss an employee for any reason. Another reason is that this magic number invites the unions into the labor picture. This mandates that employee reps get eight hours of pay when doing union related work per month. The Union reps are important because management must consult with union reps on all matters, even introduction of new technology into the workplace. Once #16 employee occurs, #17 must be disabled in some manner. So, by the 51st employee, your biz will have 7% disabled workers. It is law, not an option. By your 101st employee, your biz must now report gender dynamics in detailed fashion.
Italian law does have a few tax credits, for instance, if you hire a woman on a permanent position, under age 35, AND from one of the eight designated regions, your credit is 15,000 euros. If your biz is less than 15, you do not have to pay into the the national unemployment fund, and if you are in the tourist or retail trade, no payment into the fund until employee 51 his hired.
So, from a person's wage in Italy, 47% goes to the government before payroll.
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