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Organizations with a global presence are exposed to various compliance risks. Hiring, employee onboarding, paying taxes, processing payroll, issuing payslips… The rules and regulations governing these activities are different in each country. And as if complying with all of these rules at the moment you hire a new remote employee wasn’t enough of a burden on your compliance teams, their task is made even more complicated by the fact that employment law is constantly changing.
The more countries you expand your business to, the more work there is for your compliance team to keep track of the changes to all the different labor laws. Not only does this increase your compliance costs, but it also exposes your business to an increasingly high compliance risk. This is especially true in Europe.
In this blog post, we’ll take you through some of the key changes in employment law in 2021 and 2022, focusing on the major European countries.
The State Of Work
One of the major changes to Belgium employment law in 2022 is a new regulation under which employees will soon be allowed to request a four-day week from their employers. Under the new scheme, employees will be able to work their weekly 38 hours over the course of four days and thus extend their weekend over three days.
Another novelty is the official introduction of the employee’s right to be offline which must be respected by companies with more than 20 employees. In 2021, Belgium furthermore extended paternity leave from 10 to 15 days - another extension to a total of 20 days is planned for 2023.
Planning to hire a new employee in Belgium? Our Belgium Hiring Guide will tell you everything you need to know about local employment law.
At the end of 2021, Cyprus amended its maternity leave law. According to the amendment, employees in Cyprus are now allowed to take extended maternity leave for their second and any subsequent child. The new rules grant mothers the right to take 22 weeks of maternity leave for the second child and 26 weeks for any subsequent child. Maternity leave entitlements for the first child remained unchanged (18 weeks).
Planning to hire a new employee in Cyprus? Our Cyprus Hiring Guide will tell you everything you need to know about local employment law.
In July 2021, a change in French labor law came into effect which grants fathers of newborn children the right to take 28 days of paternity leave, i.e. 3 days of childbirth leave plus 25 days of additional paternity leave. Childbirth leave will still be paid by the employer, but the additional 25 days will be paid via the social security system.
The new regulations have doubled the paternity leave entitlement which previously was 14 days. Plus, one week of paternity leave is now mandatory. With the new rules, the French government aims at creating more equality between men and women.
Planning to hire a new employee in France? Our France Hiring Guide will tell you everything you need to know about local employment law.
There are several changes in German employment law which have already come into effect in 2022 or are expected to enter into force later this year. For instance, the obligation for employees to present their employers with a physical medical certificate of incapacity will disappear as of July 2022.
From July on, employers will be able to retrieve the relevant data on their employee’s incapacity directly from the respective health insurer. Minimum wages in Germany are also increasing. In January of this year, the hourly minimum wage reached EUR 9.82. A further increase to EUR 10.45 per hour is scheduled for this July.
Planning to hire a new employee in Germany? Our Germany Hiring Guide will tell you everything you need to know about local employment law.
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2021 has been a year of major changes in Greek employment law. Law 4808/2021 introduced several changes concerning the relationship between employee and employer, including leave regimes. Under the new rules, fathers of newborn children now have the right to take 14 days of paid paternity leave - instead of only two days.
The regulations for parental leave have also changed. While the total leave duration of four months per parent remained the same, the first two months are now paid. In addition, parents of children under 18 now get four days of additional leave which they can use to check on their offspring’s progress at school.
Other changes brought about by Law 4808/2021 include a right to flexible work arrangements for parents with children under 12 and extended overtime limits - now 150 hours per year instead of 120.
Planning to hire a new employee in Greece? Our Greece Hiring Guide will tell you everything you need to know about local employment law.
In March 2022, Ireland’s cabinet approved the new Sick Leave Bill. Under the new law, employees in Ireland will be entitled to 3 days of paid sick leave. Upon presentation of a medical certificate, employees who have been working for their employer for more than 13 weeks will receive sick pay from their employer. The amount of sick pay to be provided by the employer is fixed at 70% of the employee’s usual wages. However, sick pay is limited to 110 euros per day.
Since Ireland still lags behind its European neighbors on the sick leave front, the government has already announced plans to gradually increase the statutory sick leave entitlement. In 2024, employees will get 5 days sick leave. In 2025, it will be 7 days and in 2026, the number of paid sick days will rise to 10.
Another change in Irish employment law is due to enter into force this summer. From July onwards, parents with children under two will be entitled to 7 weeks of paid parent’s leave each. Currently, parent’s leave is limited to 5 weeks per parent.
Planning to hire a new employee in Ireland? Our Ireland Hiring Guide will tell you everything you need to know about local employment law.
There are a number of changes to Dutch employment law which entered into force earlier in 2022 or are due to take effect later this year. Some of the changes concern the ratio of women and men in management positions. According to the new rules, a company’s supervisory board must now be composed of at least one third male members and at least one third female members.
Another major change is the increase in paid parental leave. The Paid Parental Leave Act is due to enter into force on 2 August 2022 and provides for nine weeks of paid parental leave for each parent. The leave will be paid at a rate of 50% of daily wages. Currently, parental leave in the Netherlands is unpaid. Other amendments to Dutch labor law include the introduction of an untaxed home office allowance and an increase of the statutory minimum wage to EUR 1,725 per month (applicable to employees over 21).
Planning to hire a new employee in the Netherlands? Our Netherlands Hiring Guide will tell you everything you need to know about local employment law.
On 1 January 2022, Poland’s wide-ranging amendments of its tax system entered into force, also known as the Polish Deal. The new tax rules have a direct impact on payroll processes in Poland as they entail an increase of the individual tax-free amount to PLN 30,000 and shift the income threshold for the first income tax bracket from PLN 85,000 to 120,000 - among other measures.
With regard to employment, 2022 will see some major changes in the rules that govern parental leave. The Polish government has announced that it plans to extend parental leave from the current 32 weeks to 41 weeks, with at least 9 weeks being reserved for each parent.
Planning to hire a new employee in Poland? Our Poland Hiring Guide will tell you everything you need to know about local employment law.
Companies with a presence in the UK who are looking to hire independent contractors to support their business should be aware of the amended IR35 rules. The IR35 sets the rules for off-payroll working, i.e. taxation of independent contractors. Following an amendment in April 2021, it is now the company’s responsibility to determine the employment status of a worker - before it was up to the individual to decide on their IR35 status.
Employers are further required to document their decision on a worker’s classification and inform the HMRC, which is the UK’s Revenue Office. Another change impacting employers in the UK is the rise of the national minimum wage rate which is now set at GBP 9.50 per hour for employees aged 23 or older (changes entered into effect on 1 April 2022).
Further changes to UK labor law include amendments to allow employees to request flexible working arrangements from day one, thus removing the 26-week waiting period.
Planning to hire a new employee in the United Kingdom? Our UK Hiring Guide will tell you everything you need to know about local employment law.
Employment rules and regulations change all the time. For companies with a presence in multiple jurisdictions, legislative changes can put quite a strain on compliance teams. As your business keeps expanding, you have to invest more and more resources on keeping track of the latest employment law updates in each geography. Failing to do so may result in high fines and penalties for non-compliance - or even lawsuits in the worst case.
A global employment solution like Lano is designed to take the compliance burden off your shoulders. Our network of Employer of Record partners allows you to compliantly hire full-time talent in over 150 countries. The Employer of Record will take on the role of your employee’s legal employer, thus providing a local employment contract and benefits package, while you keep in control of your employee’s day-to-day activities and focus on your business.
Reach out to our sales team to find out how Lano can help you hire remote employees around the world without compliance worries.
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