The European Union is a popular location for companies looking to expand. And rightfully so, it provides a diverse economic landscape and a plethora of countries to support businesses specific needs. Its high-quality working conditions create a competitive market that drives economic growth, and these considerations for well-being benefit both employees and employers. From annual leave, flexible working hours, to social security plans, Europe’s mandatory employee benefits are some of the best in the world.

Countries and businesses in the European Union also profit from the free movement of workers, as it allows for free range through 27 different countries. This includes non-discrimination and equal treatment to all EU citizens; a few exceptions involving jobs in the public sector.

However, part of creating an exceptional work environment and a productive workforce, is by forming labor laws that protect employees and provide them with the necessities to thrive. So, although Europe is a premier location for businesses, it’s also home to intricate and complex labor laws that you should know.

United Kingdom

The UK is an EU nation that remained outside the Economic and Monetary Union choosing to maintain its pound sterling. Today, it is one of the largest economies in all of Europe and the world, as well as a financial center and trading power.

Changes and implications will arise once Brexit takes place.

Advance Notice: – Workers must be provided either the notice stated in their contract or the statutory minimum notice period, whichever is longer.

Fair Dismissal: – A valid reason must be made for dismissing an employee. Reasons include:

• Redundancy
• Capability & conduct
• Legal barriers

Redundancy Pay: – Workers are entitled to statutory redundancy pay if they have been working for their current employer for 2 years or more. Entitlement:

• Half a week’s pay for each full year worker is under the age of 22
• One week’s pay for each full year worker is between the ages of 22 and 41
• One and half week’s pay for each full year worker is 41 years of age or older

Length of service is capped at 20 years.

Weekly pay is capped at £525 If worker is made redundant on or after 6 April 2019. The maximum statutory redundancy pay a worker is eligible to receive is £15,750. The amounts will be lower if the worker is made redundant before 6 April 2019.

Payroll Cycle:

• Salaries are paid either bi-weekly basis or monthly. If paid on monthly, payday is the last working day of each month.

Payment Schedule:

• Pay date for monthly payroll is between the 25th- 30th of the month.

For further information our United Kingdom payroll and benefits guide outlines all the key criteria for a company looking to hire or open an office in the U.K. For companies looking to hire but without opening a local registered entity should view our U.K PEO service 

Italy

As one of the founding members of the European union, Italy has a very strong manufacturing sector, and is a powerful exporter, that attracts a surfeit of tourism.

Italian employment law is comprised from local law, EU law and collective labor agreements.

Contract: Written contracts are only mandatory for fixed-term, part-time, temporary, or apprenticeship contracts.

Working Hours: Employees work an average of 40 hours a week and are not to work more than 48 hours weekly including overtime. However, employers must provide employees specifics on their work within 30 days from when they hired.

Termination: Dismissal is done by the employer giving a notice (period of length is agreed with the collective agreement), or by providing a pay in lieu.

Social Security Contributions: Employers contribute 29%-32% of workers wages towards funds for unemployment, sickness, maternity, temporary employment compensation, social mobility and other minor funds.

For more detailed information see our Italian payroll and benefits guide

Germany

The German economy is the largest in Europe and the fourth largest in the world. It is also one of the largest exporters in the world, leading in machinery, vehicles and chemicals.

Germany doesn’t have one unified labor code but instead has labor standards for various acts. German employment laws come form federal law, collective bargaining agreements and European Union legislation.

Contracts: The Proof of Employment Act requires that employers present an employee with written terms of employment within a months’ time of the employees agreed start date for fixed term employment and apprenticeships.

Notice: Period for end of employment – Notice during a trial period (0 – 6 months) is 2 weeks. Notice after trial period is:

• 7 months – 2 years = 4 weeks
• 2 years = 1 month
• 5 years = 2 months
• 8 years = 3 months
• 10 years = 4 months
• 12 years 5 months
• 15 years = 6 months
• 20 years = 7 months

Employees should be given a written itemized statement (payslip) that show their gross and net pay.

Payroll Cycle:

• Salaries are paid monthly.

Payments Schedule:

• Salary payment must be made by the end of the month. Commonly paid around the 25^th of the month.
• Social insurances – paid no later than three business days before the end of the month. Specific schedule will be communicated with each month’s payroll.
• Wage tax – must be paid by the 10^th of the following month.

For further information see our Germany payroll and benefits guide

France

With almost 90 million visitors yearly, France is the worlds most visited country in the world, helping boost its economy. Other key contributors to their economy is, energy, transportation, and aerospace and defense industries.

Employment law in France is built on international law, EU law, and domestic law. The domestic law for employment comes from collective bargaining agreement, contracts, and The French Labor Code.

Working Hours: the legal working week is 35 hours and must not exceed 48 hours. Working days may not exceed 10 hours, and a break is required for 4.5 hours of continuous work.

Contracts: Written contract is required for fixed-term and part-time employment. EU law requires that an employer present an employee with details regarding their work; working hours, payment, paid leave, and notice period.

Termination: All employers must provide a notice when dismissing an employee unless the dismissal is due to mutual consent or gross misconduct.  

Notice Period: The length of the notice period is determined based on job title and length of service.

• 1-2 months for most employees
• 3 moths for executives

Payroll Cycle:

• Salaries are paid monthly.

For more detailed information our France payroll guide outlines paid time off, taxes, termination, payroll cycles

Spain

Spain’s unique location, allowing it to be accessible to Europe, Africa and the Americas, makes it attractive to businesses. Spain also boosts a qualified workforce alongside low labor costs.

Spanish labor law is regulated by the Spanish Civil Code and the Spanish Workers Statute.

Contracts: Contracts are provided in writing or verbally depending on what the parties request. Fixed-term contracts must be written.

Working Hours: Fulltime employment is considered 40 hours weekly, and 9 daily hours (maximum unless agreed otherwise).

Overtime: Employees are not allowed to work more than 80 overtime hours annually.

Social Security Contributions: Employers must contribute a fixed rate of 29.9% of workers’ wages.

Termination: Employees dismissed on disciplinary grounds are not required to receive notice of dismissal. In cases of redundancy, dismissal can be based on economic, organizational, technical or productive reasons. Termination notice must be provided in writing, and the notice period is agreed upon in employment contract.

Notice Period: Employers should provide 15 days of notice, and if notice isn’t given, payment in lieu shall be given.

Payroll Cycle: Monthly

For more detailed information our Spain payroll guide outlines paid time off, taxes, termination, payroll cycles