Thanks to globalization and remote work, it’s now possible for companies to hire virtually anywhere in the world. For roles that are in high demand and thus difficult to fill, such as software development and IT management, it makes sense to look overseas for remote talent. Companies in North America, for instance, might look to Europe because it’s known for its rich talent pool, especially in technology.
Yet, hiring across borders isn’t simple or straightforward. While the advantages still outweigh the challenges for most employers, there are still complexities involved with hiring in foreign territories. To avoid the complications of setting up a separate business entity, most companies looking to hire in Europe, turn to an employer of record (EOR) in Europe. The European talent pool is easier to navigate with their help—here’s how.
EORs in Europe
A European employer of record is a third-party organization that assumes the role of employer for legal and tax purposes. This allows your company to operate overseas and hire staff in Europe legally. EORs perform both legal and human resources functions. These organizations can oversee taxes, payroll, compliance, and benefits for your remote workforce. EORs also take responsibility for formal employment tasks, which enables your company to hire quickly and efficiently in global markets.
While using an EOR in Europe allows you to tap into the region’s talent pool without the usual headaches of global employment, it can still pose some challenges if you intend to hire in more than one country. Each country has its own employment laws. For instance, the labor laws in Spain are not the same as those in the U.K. Working with an EOR in several different countries simultaneously may therefore become extremely complicated. Fortunately, Oyster can help make it easier.
Oyster’s global employment platform makes hiring across borders simple by handling all aspects of employment for you, including:
- Compliance with local laws
- Onboarding
- Payroll
- Benefits
- Time off management
- Offboarding
Check out Oyster today to see how our global employment platform can help you onboard team members from Europe without having to worry about the legal and logistical details.
A few things to know about hiring in Europe
Many European nations are members of the European Union (EU) which has the ability to adopt European legislation, including those related to labor and working conditions. This may be affected by the EU adopting “directives,” which require member states to implement the content into their local laws, or by “regulations,” which are directly enforceable on all member states. In addition, each member state has its own local labor laws.
The U.K., on the other hand, left the EU in 2021, and so U.K. laws will undoubtedly start to diverge from the EU legislation, when adopting their own new local labor laws. Navigating Europe’s regulatory landscape can therefore be extremely complex. Here are a few basic principles to consider.
Contracts
Based on the EU Directive on Transparent and Predictable Working Conditions, by 1 August 2022, employees in the EU need to be informed of some essential terms of their employment in writing within the first week of employment. Written contracts outlining the terms of employment are common in most European countries.
Working hours and vacation
Based on the EU Working Time Directive, the EU member states have been obliged to implement limitations on working hours into their national laws, requiring that a workweek not exceed 48 hours (including overtime). Depending on national legislation and/or collective agreement, the 48-hour average may be calculated over a certain reference period.
The same directive also guarantees that in the EU, national laws should grant employees paid annual leave of at least 4 weeks. Sweden has implemented an annual leave of 25 days, unless collective agreements provide for more. Ireland provides 20 days, while in Italy all employees other than executive-level employees are entitled to 26 days of vacation per year.
Advance notice/termination
Employers in Europe must give notice in advance of termination of employment which may differ by country. For example, the notice period in Spain amounts to 15 days, while in France it's one to two months for most employees and three months for executives.
Moreover, at-will termination does not exist in Europe, so a valid reason for termination must be provided in order to terminate employment.
Redundancy pay
In some countries in Europe, workers are entitled to statutory redundancy or severance pay after termination. In the U.K., for example, workers are entitled to redundancy pay based on their age group after two years of service:
- Half a week's pay for each full year if they're under the age of 22
- One week's pay for each full year if they’re between 22 and 41
- One and a half week's pay for each full year after age 41
In the Netherlands, employees are entitled to a so-called statutory transition payment in case the employment is terminated at the initiative of the employer. This payment amounts to ⅓ of a monthly salary per year worked.
As you can see, the legal landscape becomes even more complex when you're looking to hire across multiple countries. Oyster removes the complexity by managing all of the legal aspects of employment for you. Learn more about how we alleviate the hassle of hiring across borders with our global employment platform.
About Oyster
Oyster is a global employment platform that enables visionary HR leaders to find, engage, pay, manage, develop, and care for a thriving, distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve without the usual headaches and expenses.
Oyster enables hiring anywhere globally—with reliable, compliant payroll and great local benefits and perks.
