An overtime lump sum is commonly referred to in Italy as "straordinario forfettizzato". It is a fixed monthly payment intended to compensate a specific, foreseeable amount of recurring overtime work on a flat-rate basis.
As a general rule, overtime refers to working hours performed beyond normal working time. In Italy, normal working time is generally 40 hours per week; however, the applicable collective bargaining agreement may provide for shorter working hours or specific rules. Even where an overtime lump sum is agreed, statutory and collectively agreed limits on working time must always be observed.
An overtime lump sum may be useful where an employee regularly performs a limited and predictable amount of additional work. It is important that the arrangement is clearly regulated in the employment contract or in a separate addendum.
In particular, the agreement should specify:
A lump-sum payment does not automatically cover any amount of overtime. If the employee works significantly more overtime than the amount covered by the lump sum, an additional payment entitlement may arise. The employer should therefore continue to record the hours actually worked.
Special care is required if the lump sum is paid for a long period regardless of whether overtime is actually performed. In such cases, it may be treated as a stable salary component or as a so-called "superminimo", meaning it may no longer be freely reduced.
An overtime lump sum can be a practical tool, but it must be drafted clearly and monitored over time. The applicable collective bargaining agreement, the actual working hours and a clear contractual arrangement are decisive.