Hiring employees worldwide can be an exciting opportunity for a growing business. However, expanding into European markets from the UK requires navigating a wide range of employment laws, tax obligations, payroll requirements, and employee rights.
While Europe and the UK share many employment fundamentals, they are no longer identical. Within the EU, no single employment law applies the same way across all member states. Instead, EU legislation establishes a minimum set of standards, and each country implements its own additional national laws.
With such variation, global hiring can quickly become challenging. At PeoplePay Global, we are committed to making international hiring quick and simple. In this guide, we discuss how UK businesses can consider expanding into the EU, along with the key laws you need to know during the employment process.
UK vs EU Employment Laws:
When hiring internationally, it’s important not to assume that every employment contract or HR policy will match UK standards. Employment laws differ across countries, particularly on working hours, family leave, employment contracts, annual leave, employee termination, and social security obligations.
Some of the key areas UK businesses must consider when hiring within the EU include:
- Employment contracts:
Before starting their contract, UK employers must provide employees with a statement setting out their employment regulations. The contract will generally include information such as expected pay, working hours, holiday entitlement, probation arrangements, and benefits.
In the EU, requirements can differ because the ‘Transparent and Predictable Working Conditions Directive’ sets minimum requirements, including employment information and probation periods.
Each requirement will differ by country, so some laws may not apply where you hire; however, you must still be aware of these varying rules.
For UK businesses hiring in Europe, this can mean UK contracts may need to be adapted to meet the legal requirements of the employee’s country.
- Working hours:
Working hours are another factor which can often differ across European countries.
Under the current EU rules, employees have a right to an average maximum working week of 48 hours, including overtime. EU rules also provide at least four weeks of paid annual leave, though this is often more generous in individual countries.
While the UK also operates under an average 48-hour weekly limit under the ‘Working Time Regulations’, rules on breaks, overtime, and reference periods can vary. If a UK business hires across multiple European countries, it must be aware of and check any relevant local requirements, rather than relying solely on its own practices.
- Annual leave and public holidays:
Annual holiday entitlement is another difference between UK and European employment laws.
In the UK, many employees are legally entitled to 5.6 weeks of paid holiday each year, equivalent to 28 days for those working five days a week, including bank holidays.
Within the EU, the minimum entitlement is generally four weeks of paid annual leave, though individual EU member states can often provide more generous holiday rights.
When creating a benefits package for a new employee, it can therefore be incredibly important to note the employee’s country’s rules and regulations. This also includes any local public holidays, which can vary across European cities.
- Family leave and entitlements:
Under current EU employment legislation, there is an established minimum standard for maternity, paternity, and parental leave, including carers’ leave and other flexible working rights. Each country will also provide employees with additional rights through its national legislation.
Depending on the UK business’s current parental leave policies, it is therefore important to review any additions before creating an international workforce. Employers may also need to consider locally expected benefits, such as pension contributions, healthcare support, and insurance, which may be an important part of attracting and retaining international talent.
- Termination/redundancy:
When ending employment in the UK, employers must follow the required notice period and comply with dismissal or redundancy requirements.
However, within European countries, there can be many additional rules and regulations to comply with. EU employment rules can cover areas such as collective redundancies and employee rights during business transfers. National legislation then determines how the rules operate in each country.
Therefore, some European employment systems may involve more formal procedures than UK businesses are used to, making it important to handle the process correctly, as issues can create financial and legal complications.
- Right to work/immigration:
One of the biggest issues since Brexit is the distinction between employing someone in the UK and someone in the EU.
For example, EU citizens do not automatically have the same right to work in the UK that they once did. Since Brexit, European employees must have a right-to-work check completed before they begin employment and, in certain cases, an immigration permit.
The situation is similar in reverse. A British citizen wishing to work within the EU must be able to meet that country’s immigration and work-permit requirements.
To get the right support for an international move, global mobility support can ensure all checks are completed easily, making relocation as simple as possible.
- Payroll, social security and tax:
Businesses must also navigate a variety of obligations, such as global payroll, local tax, and social security contributions.
Each country has its own rules and regulations around payroll requirements and tax complications, so employers must understand the variations to stay compliant with each law. Rules and regulations can also vary within each country, making it important for UK businesses to account for the relevant local requirements where the employee is working.
Using a global payroll provider can help businesses stay compliant throughout the process, pay employees correctly, and ensure legal payments are made.
- Data protection and employee information:
All UK businesses must also be aware of how they store, transfer and collect their employees’ information. For example, the UK operates under the UK GDPR, while EU countries operate using the EU GDPR. Although they share the same principles, UK businesses must still meet certain requirements.
Currently, the UK benefits from EU adequacy decisions, which means personal information can flow from the EEA to the UK without additional safeguards. However, international businesses must still assess how they process and transfer employee data, especially if global HR or payroll systems operate across multiple borders.
How Can Businesses Simplify Hiring In Europe?
For businesses beginning the transition to international hiring, it can often feel overwhelming because of the number of regulations and administrative rules they must follow.
Rather than managing each aspect of international employment internally, businesses can work with a global mobility partner for support with employee management, including global payroll, mobility services, and global HR, benefits, and compensation.
A global mobility service helps businesses manage employees across borders while navigating local employment requirements throughout the process. At PeoplePay Global, we support international relocations, work permits, employee agreements, and relocation support to help your business manage the practical challenges of international hiring with ease.
For businesses that do not currently have an established legal entity in their chosen country, we can also provide EOR support as a simple way to hire employees without immediately setting up a local entity, subject to current circumstances. Additionally, we also offer a registration format known as a ‘Non-Resident Employer’, where, in many EU countries, we can register clients without the need for a legal entity. Essentially, we allow employers to register directly with the local tax authority purely as an employer for payroll, so the business can run compliant local payroll without a branch or office on the ground.
Hiring Internationally Made Simple:
Expanding your business globally can be an exciting adventure, opening doors to new talent and markets, but it can also create compliance issues and complex regulations.
When you begin your international hiring process, remember that EU employment law is not a simple extension of UK employment law. While there are many similarities, there are many differences between contracts, working hours, family leave, termination, holiday entitlements, payroll, tax, etc.
Without a single set of rules applied across each EU country, the process can be much more difficult. Businesses must understand each national requirement to manage their employees correctly.
By working with a global payroll and HR specialist, businesses can make international hiring more straightforward and reduce the administrative burden of European expansion. International expansion should be exciting for a business; take the stress away and see for yourself how exciting EU hiring can be.
For more information, contact us today and gain reliable, trustworthy support for your business expansion.