Leave, Working Hours and Overtime: India vs Italy

Indian leave policies usually combine earned (privilege) leave, sick and casual leave, and a list of national and festival holidays set by state law and company choice. Italy has fewer categories but stronger rules: a minimum of paid holiday that cannot be paid out while employed, a fixed list of public holidays, extra leave from the CCNL, and sick leave paid largely by INPS. Full comparison on Italy vs India .

India: leave under the OSH Code and state law  

• Earned leave: under the Occupational Safety, Health and Working Conditions Code, 2020 (in force from 21 November 2025), a worker who has worked at least 180 days in a year earns one day of leave for every 20 days worked; the threshold was 240 days under the Factories Act. The code also allows encashment at year end and carry-forward up to 30 days. This applies to establishments covered by the code.
• State Shops and Establishments Acts set leave for most offices: earned leave, sick or casual leave, and a number of national and festival holidays. Figures vary by state.
• Company policy usually adds casual leave, sick leave and optional holidays.

Italy: paid holiday (ferie)  

Under art. 10 of Legislative Decree 66/2003 and art. 2109 of the civil code:

• Every employee is entitled to at least four weeks of paid holiday a year. Many CCNLs give more or express it in days.
• At least two weeks must be taken in the year they accrue (consecutively if the employee asks), and the rest within 18 months of the end of that year.
• The minimum four weeks cannot be replaced by payment while employment continues. Payment in lieu is only possible for unused leave when employment ends.

That is a real difference from Indian encashment practice. Unused statutory leave in Italy is a compliance problem, not a perk.

Public holidays  

Italy has a fixed national list (Law 260/1949 and later laws): New Year’s Day, Epiphany, Easter Monday, Liberation Day (25 April), Labour Day (1 May), Republic Day (2 June), Assumption (15 August), All Saints (1 November), St Francis of Assisi (4 October, restored from 2026 by Law 151/2025), Immaculate Conception (8 December), Christmas and St Stephen’s Day: 12 holidays that can fall on a working day, plus Easter Sunday and the patron saint’s day of the town. If a public holiday falls on a Sunday, many CCNLs give extra pay. Holidays are on top of the four weeks.

There are no optional festival holidays as in India. If your Italian employee wants Diwali off, it comes out of their holiday.

CCNL leave hours: ROL and ex-festività  

Most CCNLs add paid leave hours, often called ROL (riduzione orario di lavoro) and ex-festività (compensation for holidays abolished in 1977). Under the commerce CCNL, for example, this adds up to several dozen hours a year. Unlike statutory holiday, unused ROL may be paid out under the CCNL rules.

Sick leave  

Italy has no “casual leave”. There is sick leave, which is paid and protected:

• The doctor sends a medical certificate online to INPS; the employee gives the protocol number to the employer.
• For employees in most private sectors, INPS pays an allowance from the fourth day (50% of average daily pay to day 20, 66.66% from day 21, up to 180 days a year; white-collar staff in industry are paid by the employer instead); the CCNL usually requires the employer to top up to full or near-full pay, and to pay the first three days.
• The job is protected for a period set by the CCNL (the comporto). Dismissal for illness during that period is not allowed.
• INPS can send a doctor to check the employee at home during set hours.

Working hours and overtime  

For an Indian IT company used to India-hours overlap and late calls with US clients, the Italian rules matter. Regular late-evening calls count as working time and may trigger overtime. Plan overlap windows (Italy is 3.5 or 4.5 hours behind India, depending on daylight saving) instead of extending the day.

Right to disconnect and smart working  

Italy’s “lavoro agile” law (Law 81/2017) requires an individual agreement for hybrid work, which must address rest periods and the right to disconnect. If your Italian employee works from home some days, the agreement and a notice to the Ministry of Labour are needed.

Policies that need rewriting for Italy  

• Leave encashment. Paying out unused statutory holiday each year is not allowed. Encourage employees to take leave instead.
• “Use it or lose it” by 31 March. Statutory leave does not lapse on your financial year; it follows the 18-month rule.
• Casual leave on short notice. There is no direct equivalent. Short absences are covered by holiday, ROL hours or CCNL leave for specific reasons (bereavement, marriage, medical visits).
• Comp-off for weekend work. Weekend work must respect weekly rest and is usually paid with the CCNL premium; compensatory rest may also be due.
• Holiday approval. The employer can set the timing of holiday after considering the employee’s wishes, but cannot deny the minimum entitlement.
• August. Many Italian businesses slow down around mid-August. Plan sprints and client deliveries with that in mind.

What this means if you hire through an EOR  

The EOR tracks leave balances on the Italian payslip, applies the CCNL leave and ROL rules, processes sick leave with INPS and pays overtime when reported. You approve leave and working hours as the day-to-day manager. Two things to agree up front: how overtime is authorised and reported, and an Italian holiday calendar for your project plans.

See the cost calculator , the Italian employment contract guide, or contact us .

Related guides for Indian companies  

• Maternity and parental leave
• Labour Codes vs Italian civil code and CCNL
• EPF/ESI vs INPS/INAIL

General information, not legal advice.