PLAYROLL BLOG

Insights into global expansion & employee retention

Published: October 19, 2021

5 HR Compliance Challenges for Hiring In the EU

Expanding business into the EU? You’re surely looking forward to potential riches in a 500+ million consumer market with low trade barriers and attractive business costs.
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Here’s the catch—as it should, the EU gives the same careful consideration to its people as it does to organisations that want to hire them and sell to sell to them.

It’s a bitter-sweet opportunity; an economic opportunity with a few footnotes and caveats.

Here are 5 compliance challenges for hiring in the EU

Already Started Your EU expansion…?

Before we start, we should mention it’s not too late if you’ve already started hiring in EU countries the hard way.

If you’re reading this thinking “Blast! I had no idea I could bypass local-payroll compliance costs and multi-country HR admin!”—it’s not too late.

Create a Playroll account, for free, and use our HR expansion calculator to start planning massive cost savings for your next EU hires. We won’t bill you anything until you hire your first Playroll employee.

1. Hiring in the EU: Work-Life Balance Obligations

EU countries enjoy relatively high employment rates compared with the rest of the world—and work-life balance is a big deal to candidates.

If your work culture and terms of employment become rigid and inflexible once you’ve hired your new EU talent, you’ll likely lose them to The Great Resignation.

To retain your EU hires, familiarise yourself with work-life balance policies that differ by country. That way you’ll get off on the right foot by negotiating work contracts diplomatically and setting candidate expectations in the right context.

2. Payroll Admin and Management

Monthly payroll is pretty much the standard across the EU. ‘Pretty much’ because it varies slightly by country and industry.

  • Payslips must be issued to employees (Playroll automates payslip delivery).
  • Local language on payslips can be mandatory.

The French payslip

Hiring in France? The French payslip is notorious. Up to 40 lines of text with details of countless deductions. After the introduction of the PAYE tax system, further lines have been added— and French employers now face yet more tax collection and reporting obligations.

3. Hiring in the EU: Employee Rights and Benefits

It’ll come as no surprise that hiring in the EU will mean getting to know the intricacies and complexities of employee rights and benefits by country.

Create a Playroll account, for free, and you can use Playroll’s built-in country encyclopedia to get the granular by-country detail.

For now, here are a few basics that apply to all EU countries:

Holiday and paid leave

Minimum paid leave = 4 weeks.
Average annual leave and public holiday = 34 days.

Additional benefits

‘Work perks’ are fully or partly paid by employers.

Work perks are common throughout the EU including private healthcare, paid days off for special occasions and compassionate leave, paid transport passes and gym membership.

Unions, work councils and collective bargain agreements

In short, the EU talent you hire has the right to join them.

  • Pay rates
  • Overtime conditions
  • Benefits

Just a few of the things employee unions in the EU can impact. This is something to be welcomed. Openly backing work-council incentives can be a huge talent attractor, so get on board.

4. Hiring in the EU: Work Permits

If your candidate can prove EU citizenship, they won’t need a work permit.

Hire through your Playroll dashboard and you won’t need to worry about work permits—we’ll take care of all of that.

If they can’t prove EU citizenship, you’ll have to look into things country-by-country—the Schengen ‘work visa’ covering multiple European countries doesn’t exist.

Do some Google searching. If you hit a brick wall, come back and create a Playroll account. You’ll find by-country work permit details right inside your Playroll dashboard.

Work permits: France

If you’re hiring well-qualified third country nationals in France, you can use a multi-year ‘passeport talent’

Work permits: Hungary

In Hungary, even hyper-qualified talent hires must be approved by the Labour Office.

Work permits: Germany

As with Hungary, Germany requires hyper-qualified new hires to be green stamped by the Federal Employment Agency. If your candidate meets all local employment requirements—they’ll green-stamp provided no ‘priority rights’ German nationals are available to fill the role.

Work permits: Switzerland

Switzerland makes a specific and changing number of work permits available to third-country nationals—and they’ll need express permission before they can start.

5. Hiring in the EU: Data Privacy ( The GDPR)

Fun fact: it’s The GDPR, not just GDPR. That’s as fun as GDPR gets.

The General Data Protection Regulation (GDPR) affects any business operating in the EU that handles EU citizens’ personal data – HR departments included.

Those who already adapted to the GDPR when it came into effect in May 2018 remember the pain of just trying to understand how it impacted data-protection liabilities.

If you’re an employer facing the GDPR for the first time, here’s what to know.

  • You must appoint a Data Protection Officer.
  • The GDPR must be reflected in privacy policies.
  • Payroll managers must properly store and control access to individuals’ personal info.
  • You must report data breaches within a specific timeframe.

The GDPR penalties

Slip up with conscious or unconscious GDPR breaches and you could be hit with a fine of up to 4% of annual global turnover.

Hiring in the EU? Skip the new-office setup and EU payroll compliance maze

Don’t be alarmed by all the ‘ifs’ and ‘buts’ of expanding into EU markets. The details we’ve covered aren’t so many HR roadblocks to EU expansion—they’re just challenges you’ll need to invest time and thought to. The EU growth opportunities are worth it.

If we’ve put you off with all the caveats, don’t scrap your EU expansion plans just yet—it’s possible to hire, land and expand without facing the gauntlets of EU employment-compliance caveats.

Get started with Playroll as your Employer of Record partner. We’ll be your express ticket past all the potential local-compliance headaches.

Work permits, accurate locally-compliant payroll, benefits and contributions—we’ll take care of everything with our ‘plug and play’ fully owned network of physical EU employer entities.

Download our Ebook - How to handle HR Compliance
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