Woman's niece regularly employed in Italian city (8)
I believe the answer is:
veronica
'woman's' is the definition.
'niece regularly employed in italian city' is the wordplay.
'regularly' means one should take alternating letters (regularly take one letter, leave next etc.).
'employed in' is an insertion indicator.
'italian city' becomes 'verona' (I've seen this before).
The alternate letters of 'niece' are 'ic'.
'ic' going within 'verona' is 'VERONICA'.
(Other definitions for veronica that I've seen before include "Saint who wiped Christ's face on the Via Dolorosa" , "Girl" , "Plant with spikes of blue or purple" , "Blue / purple flowering plant" , "Plant also called speedwell -- I've no car (anag)" .)