Italy's 2026 Labour Law Expands Fair Salary Standard

Law 112/2026, converted from the Labour Decree, introduces a "fair salary" benchmark in Italy. Employers must compare the total fixed and continuous remuneration of a worker with the remuneration set by the sector‑leading collective labour agreement (CCNL leader), rather than only the minimum tabular rates. The rule aims to enforce the constitutional guarantee of a dignified wage under article 36.

The 2026 Budget Law also provides two tax exemption measures: a 5 % substitute tax on wage increases resulting from collective contract renewals (2024‑2026) and a 15 % substitute tax on night, holiday, rest‑day and shift work allowances. A circular from the Agenzia delle Entrate (circolare 3/E/2026) clarifies that these benefits apply only when a CCNL is in force for the employment relationship. The 5 % benefit is limited to workers earning no more than €33,000 in 2025, while the 15 % benefit applies to those earning up to €40,000, with a maximum exemption of €1,500 per year.