Employer of Record: Not necessary for hiring remote employees in Europe

Did you know that companies can hire remote employees across Europe without using an Employer of Record (EoR) or setting up entities? Companies can hire remote employees across Europe, directly, as a foreign employer. 

We’ve learned a lot about solutions to scale a globally distributed remote team during the last few years. We know all about misclassification. How costly and slow it can be to set up entities in every country you want to hire. And we know all about the Employer of Record solution. But did you know that companies can hire remote employees across Europe without using an Employer of Record (EoR) or setting up entities? Companies can hire remote employees across Europe, directly, as a foreign employer. 

 

Contracting an Employer of Record in Europe


Contracting an Employer of Record (EoR) to hire European-based employees is completely unnecessary. In fact,
the EoR model is non-compliant in some European countries. Spain for example does not accept the EoR model and there is no tweaking that can be done to get around that. Using an EoR to hire your remote team members in Spain puts everyone at risk of penalties for non-compliance.

 

By using an Employer of Record rather than hiring direct, you are in fact outsourcing the employee relationships of your own team. That means, should any disputes arise (we hope they don’t), you are not the legal employer. So any contracts that have been signed between you, the employer, and your remote worker may not have any legal basis. On top of this, you may jeopardise IP. There is no legal contract of employment between you and your own employee (an employee who is, technically, employed by someone else).


We don’t want to rain on the parade of EoR’s because they are an amazing solution. One that has revolutionised how companies can hire. While enabling job seekers to get hired by the best companies in the world, wherever they are based. But you just don’t need to use them in Europe.

 

Hiring remote employees as a foreign employer


Hiring a remote employee in Europe as a foreign employer ticks all the boxes for compliance, cost-effectiveness, and IP protection. It is similar to setting up an entity in another country but without the corporation tax liabilities, or the bureaucracy.

When registered as a foreign employer in each country where you have team members, the company is now an employer in that country and has obligations under local legislation as an employer. Such as providing statutory employee benefits, providing safe working conditions, and protection of their data, etc. For that reason it’s recommended to work with specialists who have expertise across Europe, to guide and advise you to ensure you remain compliant as an employer.


International companies can hire across Europe as a foreign employer, in the EU 27 + Switzerland, Iceland, Norway, Liechtenstein & the UK.


We are supporting global companies to hire remote employees in Europe. We support you as an employer in each country. By taking care of all the payslips, contracts of employment, social security liabilities, fiscal representation, and statutory benefits.


Interested to learn more? You can schedule a free strategy call with our team.