Article
7 min read
Author
Kate Moerel
Published
April 19, 2024
Last Update
June 27, 2024
Table of Contents
What does HR and payroll compliance include?
Compliance challenges in Europe, Middle East, and Africa
Examples of HR and payroll compliance diversity around EMEA
How Deel’s customers navigate EMEA compliance with success
Forget compliance issues in EMEA with Deel
Did you know that:
In a global business environment, you must stay up-to-date with such laws and regulations in the countries you hire from and implement adequate policies to protect your company from liability, financial penalties, and damaged reputation.
This task becomes more complex and carries more risk when you hire globally, as each region or country has its own set of labor laws, tax regulations, and employment standards. On top of that, HR and payroll laws are subject to frequent change: in 2022, there were over 61,000 regulation changes worldwide.
This article will guide you through the basics of HR and payroll compliance in different European countries, the Middle East, and Africa.
HR and payroll compliance means adherence to legal regulations, standards, and requirements governing human resources management and payroll processing within a company. This ongoing process entails a wide range of obligations, such as employment laws, tax regulations, social security contributions, data protection laws, and employee benefits.
Compliance ensures that businesses operate ethically, legally, and responsibly while protecting the rights and interests of employees.
For businesses operating in multiple regions, payroll and HR compliance is crucial for several reasons:
Here are the key components of HR and payroll compliance:
💡Read more: 3 Cost-Effective HR Compliance Solutions for HR Managers
Complying with regulations in Europe presents unique challenges for businesses, particularly due to the complexity of European Union (EU) regulations and the diversity of legal systems across different countries.
The three most significant compliance challenges in Europe include:
The General Data Protection Regulation (GDPR) is one of the most stringent data protection regulations globally and applies to all organizations processing personal data of individuals within the EU. Noncompliance with these laws can expose your company to serious legal risks, including lawsuits in case you fail to protect employee data privacy.
Key challenges businesses face in GDPR compliance include:
Deel is fully committed to ensuring GDPR compliance. We maintain the highest standards as outlined in the GDPR and follow all frameworks, policies, and processes required.
Although a single continent, Europe isn’t a homogeneous market nor can it be viewed as a single legal environment. Operating in multiple European countries adds layers of complexity to compliance efforts due to the diversity of regulatory frameworks, cultural differences, and language barriers.
Cultural nuances may also impact HR practices, communication styles, and business norms. Understanding and respecting these cultural differences is crucial for compliance and building successful operations in each country.
Language differences pose challenges for businesses operating in multiple European countries, particularly when translating legal documents, communicating with employees, and understanding local laws and regulations.
💡Read more: Doing Business in Europe: A Comprehensive Guide
In the Middle East and Africa, there may be significant economic disparities across the region, with some countries having advanced economies and others facing economic challenges.
Businesses operating in less developed countries may face resource constraints, including limited access to legal expertise and compliance resources, which can hinder their ability to ensure compliance.
Changes in government policies, regulations, and enforcement practices can create uncertainty for businesses operating in the MEA region, requiring them to stay informed and agile in their compliance efforts and potentially have a market exit plan ready.
An employer of record (EOR) provides higher flexibility in market testing, scaling your workforce up and down, and even closing down your operations in a specific market. It makes sure all payroll and HR processes are carried out in full compliance with local regulations, allowing you to react quickly to what’s happening in the region.
Below, we’ll share a few examples of how employment and payroll laws can vary depending on the country you hire from. From record-keeping requirements to annual leave, you must know all these regulations to ensure full compliance in any given country.
Note: Since the UK left the EU, the employment laws that apply to the union don’t necessarily need to be followed in the UK.
At Deel, our network of entities in 150 countries is made up of local HR experts, lawyers, and a team of writers who work to analyze hiring data and help ensure global compliance. Deel’s robust knowledge base has been built up over time to provide a vetted source of information for all clients.
Whether you're a small startup or a larger enterprise, you can now ask questions about global employment, benefits, and more and get instant answers on local laws in over 150 countries.
💡See also: Get Global HR Compliance Consulting with the AI Assistant
Note: The minimum statutory notice period for employees in Germany is four weeks prior to either the 15th or the last day of the next month.
Note: Unlike in most other countries, where the standard working hours are 8 hours per day, 40 hours per week, in France it’s 7 hours per day, 35 hours per week.
Note: In Italy, 13th and 14th salary are included in the employee’s gross salary and are paid in December and June.
Note: Employees in the Netherlands receive a holiday allowance. This cost is included in the employee’s annual salary.
Note: Ireland has the Pay As You Earn (PAYE) tax system, meaning that employers are required to deduct tax and social security contributions from wages as employees earn them.
Note: In Belgium, there are no probation periods.
Note: In Switzerland, the standard workweek can vary from 38.5 to 42.5 hours.
Note: In the UAE, employees pay no income tax. However, certain employees may be subject to social security contributions.
Note: In Nigeria, there is no statutory requirement to provide a notice period. However, best practice includes 30 days notice for non-senior employees and a minimum of 30 days for senior employees.
Get more details about 150+ countries in our Global Hiring Guide.
Deel has already helped thousands of businesses ensure HR and payroll compliance around the world, including within the EMEA region.
Take Us2.ai, for example. This company used Deel’s EOR to hire compliantly across Europe because opening their own office around the world would have taken too much time and required “numerous compliance regulations, legal works, admin tasks, and associated fees.”
We helped the APAC-based startup navigate statutory requirements in EMEA, enabling them to hire eight international workers with ease and securely digitize, store, and organize key HR documents on the platform.
An efficient approach to compliance allows our clients to improve their time to market. Like Zoomo, an Australian business that hired workers from Spain, Germany, and France, with an onboarding process of several business days at most.
Deel has made international hiring a breeze! Deel has made it incredibly easy for us to hire talent internationally. They have knowledgeable people in each country so that you can ensure compliance with each hire.
—Jasmin Lebrock,
Sr. HR Generalist, Stayntouch
Outsourcing compliance to experts is the most secure way to reduce legal and financial risks when hiring across EMEA countries.
Deel’s EOR, independent contractor management, global compliance and payroll management, HRIS, visa application assistance, and other services enable you to hire anyone, anywhere, without worrying about whether you’re adhering to local employment and tax laws.
Our in-house legal team of 200 experts and unique Continuous Compliance feature keep you up-to-date with applicable regulations and policies in over 150 countries, mitigating any noncompliance risks that could hinder your growth.
Simplify onboarding and offboarding of global talent and get ahead of your competitors in EMEA. Schedule a demo with our team to learn more about how our platform works.
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