Employment rules vary in each country, so your employment contract should reflect local employment legislation and UK laws. Your employee might effectively need two employment contracts. 

 

Compliance requirements will vary, depending on the countries in which you operate. This can include trade and supply chain regulations and codes of conduct. Professional and ethical expectations can also differ. Your employees might require further training to understand the UK business environment. Data protection requirements are also a consideration. This applies to your employee’s data and when they’re handling other personal or financial information for your business. 

 

Rights to work and eligibility for employment could change according to countries of residence or employment. There are many European standards for health and safety but you might have to address local variations. Your employers’ liability insurance might not cover someone working remotely in another country and other insurance requirements might also vary. 

 

Social security laws in European countries could mean you must provide additional documentation. This might include a certificate of home state liability which will prove an employee doesn’t live in the UK. This will depend on the agreements in place between their home country and the UK. If your employee changes their country of residence their contract might need updating. 

 

Temporary or permanent cross-border working arrangements in their country of residence will affect an employee’s tax position. If your employee generates revenue you could find you have unintentionally set up an office in another country for your business. 

 

UK employers don’t have to advise employees about personal tax but you might have responsibilities in parts of the EEA. As part of your payroll arrangements, you’ll need to check requirements for deducting personal income tax and social security contributions. 

 

The employee benefit package you offer in the UK might not be available for an employee in another European country. European employees might also expect certain benefits that you don’t currently provide. You will want to consider whether you should offer a standardised benefit package to all your employees. If a European employee moves to another country in the EEA their rights might change. 

 

Before you make employment decisions you should research expectations about salary levels and payment arrangements. When setting a salary, the implications of currency exchange rates will have an impact. 

 

Most of these issues will still need addressed if you’re considering working with self-employed people and contractors. IR35 rules could apply to contractors engaged through a personal service or limited company. 

 

Someone’s employer of record is legally responsible for them. They must make sure employees receive their employment rights in the country of employment according to local laws and regulations. 

 

You might consider working with an Employer of Record as the legal employer in a certain country. They will take care of compliance, including payroll, taxes, statutory benefits, and employment contracts. 

 

There’s a lot to think about and sometimes it can help to discuss your ideas. Please get in touch if you’re thinking about taking on employees in Europe.