The fixed overtime allowance (straordinario forfettizzato) is a fixed monthly payment through which a certain amount of overtime work that is expected to occur on a regular basis is compensated on a flat-rate basis.
The fixed overtime allowance is also paid if the employee does not perform any overtime or performs fewer overtime hours in a specific month. It therefore represents a fixed additional remuneration component and is not dependent on overtime actually being performed every single month. At the same time, agreeing on a fixed overtime allowance does not mean that the employee is obliged to perform unlimited additional working hours.
Overtime is generally understood as working hours performed beyond the normal working time. In Italy, the statutory normal working time is generally set at 40 hours per week; however, the applicable collective agreement may provide for shorter working hours or specific rules. Even when a fixed overtime allowance applies, statutory and collective agreement limits on working time must still be respected.
When is a fixed overtime allowance permitted?
A fixed overtime allowance can be appropriate when an employee regularly performs a limited amount of additional work and such additional work can be predicted. It is important that the allowance is clearly regulated in the employment contract or in an additional agreement.
In particular, the following should be specified:
- which position or activity is concerned;
- which amount is paid monthly;
- which expected number of overtime hours is intended to be covered by the allowance;
- that the payment is made regardless of the actual number of overtime hours performed in the individual month;
- that statutory rest periods and working time limits continue to apply.
What needs to be considered in practice?
The allowance does not automatically replace any type of overtime work. If the employee continuously performs significantly more overtime hours than those covered by the allowance, an additional remuneration claim may arise. For this reason, the employer should continue to record the actual working hours performed.
Particular caution is required if the allowance is paid over a long period independently of a specific contractual arrangement or without a connection to an actual expectation of overtime work. In such cases, it may legally be considered a fixed salary component or a so-called superminimo and may therefore not be reduced without further requirements.
Conclusion
A fixed overtime allowance can be a practical instrument for contractually regulating regularly expected additional work. It represents a fixed monthly remuneration component that is due even if no overtime hours are actually performed. However, a clear contractual regulation, compliance with the applicable collective agreement and regular monitoring of actual working hours remain essential.