Italy’s Law 76/2025 introduces employee participation in business, but with no binding obligations it risks being ignored
A long-awaited reform, but with no binding force
After eighty years of silence, Italy has finally implemented Article 46 of its Constitution with Law 76/2025, which came into force on June 10. For the first time, a legal framework has been introduced to regulate employee participation in business life, aiming to make companies more democratic and inclusive. However, according to Unimpresa, the law has structural limitations that may prevent it from achieving real impact.
The four types of participation defined by the law
The law outlines four forms of worker participation: managerial, economic and financial, consultative, and organizational.
- Managerial participation allows employee representatives to join company boards, but only voluntarily, if company statutes provide for it. Not even publicly controlled companies are obliged.
- Economic participation includes temporary tax incentives: profits up to €5,000 taxed at just 5%, and bonus-related dividends 50% tax-exempt up to €1,500. But only in 2025.
- Consultative participation enables workers to express opinions through committees and consultations—non-binding.
- Organizational participation is mentioned, but left undefined.
The main issue: everything is optional, nothing is mandatory
The key weakness, according to Unimpresa national advisor Marco Pepe, is the voluntary nature of the law. Companies are not required to implement any of the participation measures. Everything depends on corporate statutes and collective bargaining.
Bolder proposals, such as the Cisl’s idea to allow workers to allocate up to 15% of their wages into participatory tools with up to €10,000 in tax deductions, were discarded. The adopted incentives largely reflect existing provisions with slightly raised thresholds.
An opportunity for a few or the start of a new model?
Forward-thinking companies might seize this law as a chance to improve employer branding and retain talent through broad-based share ownership plans. Currently, there are already around 200 second-level agreements on worker participation.
However, without stronger regulatory push, the risk is that this law will widen the gap between advanced companies and those stuck in the past. Its success will depend on companies’ willingness to take initiative and unions’ ability to evolve into true partners rather than mere opposition forces.
10 frequently asked questions (FAQ)
1. What is Law 76/2025?
It’s Italy’s first law implementing Article 46 of the Constitution, focusing on employee participation in companies.
2. What forms of participation does it include?
Managerial, economic and financial, consultative, and organizational participation.
3. Is participation mandatory?
No, all measures are optional and based on voluntary implementation.
4. What tax incentives does the law offer?
5% tax on profits up to €5,000 and 50% exemption on bonus-related dividends up to €1,500, valid only for 2025.
5. Are public companies obliged to apply it?
No, even publicly owned companies are exempt from mandatory compliance.
6. What does Unimpresa say about the law?
Unimpresa believes the law is weak due to the lack of mandatory implementation and short-term incentives.
7. What were the more ambitious original proposals?
The Cisl proposed allowing workers to invest up to 15% of their salary into participatory tools with up to €10,000 in deductions.
8. What is broad-based share ownership?
It enables employees to become shareholders, promoting loyalty and engagement.
9. How many agreements currently exist on participation?
According to Cisl, nearly 200 second-level agreements already address the issue.
10. What risks does the labor market face?
A growing divide between participatory and passive companies, undermining social cohesion and innovation.
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