Types of contracts to work in a startup: what to know

Fixed-term employment contract: the special scheme

For innovative startups, the fixed-term contract provides for a special regime that provides benefits on both the duration and renewal of the contract itself. This allows the startup to be dynamic even in hiring, always ensuring flexible on-boarding of young talents. In fact, the usual stop period provided to companies in the event of expiry of the determined contract, which provides for a duration of at least 10 days before renewal (for 6 months) or 20 (for 12 months), does not affect innovative startups. Not only that, but innovative startups are also excluded from the application of the maximum limit of 5 extensions of fixed-term contracts over a 36-month period. At the end of the 36 months, these contracts can be renewed but only once and for a maximum of 12 months on one condition: they must be stipulated at the provincial labour directorate competent for the territory. After 48 months, the employee will only be able to continue working at the startup if they are given a permanent contract.

Permanent employment contract: tax relief

With the 2023 Budget Law , even for startups, the open-ended contract can be administered, favoring the startup to enjoy a certain contribution relief: in the case of hiring women or under 36 , the tax burden is significantly lower. In fact, the startup obtains a deduction of 100% of contributions up to the threshold of eight thousand euros per year; with a duration of 36 months for the former and 18 months for the latter. Above these thresholds, the relief ceases to exist. Specifically:

• For those under 36, it must concern a new hire or transformation of an old fixed-term contract carried out between 01/01/2023 and 31/12/2023; For the employee, it must be the first permanent contract ever. This also includes part-time employment relationships of indefinite duration, in which case the relief will have to be reproportioned according to working hours
• For women, they must be over 50 years old and have been unemployed for at least 12 months (six, if they fall within some special regions where funding from the Structural Funds is eligible). On the other hand, they can be of any age, even if they have not been in a regular paid job for at least 12 months.

Professional apprenticeship contract

An apprenticeship is to all intents and purposes an open-ended contract. In fact, once the apprenticeship period is over, the administration will automatically become indefinite, without having to proceed with the stipulation of any “card”. Unless the employer wants to continue, i.e. at the end of the apprenticeship no longer wants to cooperate. In this case, the employment relationship will end in the form of an apprenticeship, without becoming indefinite and without just cause. To be administered, the apprentice must be between 19 and 29 years old and must be followed by a tutor within the startup appointed by the employer. The vocational apprenticeship contract has a minimum duration of six months and a maximum of three years (five in the case of craft professions). It should be noted that these apprentices will have to undergo compulsory training, otherwise their benefits will be forfeited. These benefits for the startup are tax and contribution:

• deduction of expenses and contributions from the IRAP tax base (the F24 will be “lighter”)
• apprenticeship is not included in the calculation of collective agreements (for example, the startup will not have to include them in the calculation of AWU (Work Units per Year) due to the obligation to hire certain protected categories)
• Lower starting salary than that of a normal employee: this then increases over time through “increments” and based on the type of collective agreement.

Occasional collaboration contract: flexibility and autonomy

We had explored the occasional collaboration contract in this article. This type of contract can be extremely useful for a startup in different situations: it offers flexibility and convenience for both parties involved, allowing the startup to get the support of qualified professionals without having to hire full-time staff. The collaborator can also carry out other jobs with permanent contracts or through a VAT number. The occasional collaboration contract can be particularly advantageous for a startup for short-term projects, if the startup needs to complete a specific project or face a temporary peak of work. This allows the startup to save on training, hiring, and firing costs, while reducing the risk of having to retain an employee long-term when they are no longer needed. Or in some cases, the startup may need specialized skills that aren’t available internally. For example, you may need a digital marketing expert for an advertising campaign or legal counsel for contract review.

Internship contract: opportunities for learning and entering the sector

The internship contract is a form of work, or rather a particular training-work contract that can have different facets: it can in fact be curricular, without being subject to remuneration but only to the recognition of a quantity of credits useful for the academic world. Or it can be paid and in this way take advantage of some benefits, such as those provided by
the Youth Guarantee
. In fact, with the 2012 labor reform (Monti Government) it is no longer possible for companies to offer free internships for those young people who have completed a training cycle. And we should therefore talk more about internships than internships. If the young person has completed their academic career, the startup will have to offer them other types of contracts, or initially start a Youth Guarantee internship aimed at training: the latter type allows the startup to be able to recover a percentage of the salary paid to the trainee (in the form of 30% per year) at the end of the training course. The internship contract can be classified into three types on the basis of its duration:

• a maximum of six months in the case of training and orientation internships;
• no more than 12 months in the case of placement and reintegration internships;
• Traineeships for disadvantaged people for no more than 12 months: in the case of traineeships for disabled people, no more than 24 months.

Project-based work contract: use your skills flexibly

The provisions governing the project employment contract were repealed by the D. Lgs. 15 June 2015, n. 81. This type of relationship concerns a multitude of workers, usually de facto included in the company organization but not formally recognized as subordinates and, therefore, lacking the typical guarantees of this type of employment relationship. Over the years, the various regulations have regulated this type of contract (e.g. Co co co co or Co co pro) making it increasingly part of that of parasubordinate contracts. Today, on the other hand, the regulatory discipline identifies them as coordinated and continuous collaborations in which the mainly personal activity is carried out without subordination to the client. It is therefore characterized by the autonomy of the subject who carries it out. The collaborator’s activity must be attributable to one or more specific projects determined by the client and managed independently by the collaborator. For the collaborator, the advantage is the possibility of not opening a VAT number, while for the employer not to make use of a useful figure only for a certain period of time and without being subject to the payment of contributions, holidays and illnesses provided for by a specific or indefinite contract.

Freelancer with VAT number: when it’s convenient

We also dealt with the opening of a VAT number in this article. The startup hires employees with a VAT number because they generally involve professionals who are very competent in a certain area and sector (e.g. designers, writers, programmers, project managers, etc.) and for whom the administration of a subordinate would involve an excessive cost, especially in the early stages of the startup’s life. In fact, the renewal of the contract does not provide for certain particularities. However, it must be emphasized that the employer will not be able to condition the professional by treating him as his own employee and therefore obliging him to submit to a certain time or presence/absence: otherwise, it will be to all intents and purposes a subordinate contract. In fact, the professional with a VAT number is paid for the project he carries out, and not for the time in which he carries it out: this applies only to subordinate work. (Photo by Annika Wischnewsky on Unsplash)

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