How to Hire Remote Workers in Europe And Stay Compliant in the Process

If you plan to expand your company internationally or just want to hire from a larger talent pool, hiring remote workers in Europe is a great option. It’s no secret that businesses of all sizes, from new startups to major corporations, have been hiring remote workers in Europe for quite some time. 

However, hiring remote workers in other countries, especially those in Europe, can seem a bit daunting. If you’re based in the U.S., how do you pay them in a new currency? If you need to establish a subsidiary, what laws and regulations do you need to follow? Let's dive in.

What are the benefits of hiring remote workers in Europe? 

1. Larger Talent Pool

One of the many benefits of hiring remote employees and building a remote team in Europe (and abroad more generally) is that you have a larger talent pool to choose from. Across Europe, employers can find candidates with specialized skills that meet their specific talent needs.

2. Cost-Effective

Remote hiring in Europe is also a cost-effective way to hire employees, especially if they can work from home. In general, hiring remote employees saves employers time and money with both the recruiting and onboarding process. You can use all the power of the internet to search for the right candidates and fill open roles seamlessly through remote job posts. 

3. More Flexibility

Most importantly, you will give your remote workers more flexibility to work their own schedules based on where they live. While navigating time zones can be challenging, having employees across the globe can be beneficial in the long run, as your team will be faster to respond to urgent requests. 

4. Language Skills

Many Europeans speak and read more than one language, including English, which is a huge advantage for U.S.-based businesses. Many companies in Europe conduct business in English. 

Five Considerations for Hiring Remote Workers in Europe 

Although hiring remote workers in Europe is similar to hiring remote employees in the United States, there are some key differences that you should keep in mind. 

1. Decide Between Full-Time Employees and Contractors

When hiring remote workers in Europe, the first thing you need to decide is if you’re planning to classify the worker as a full-time employee or an independent contractor. Although both options have their respective benefits, most businesses opt to hire independent contractors remotely in Europe. 

This makes the relationship between the business and the worker a contractor agreement and not an employment agreement. It means one company (the business) is entering into an agreement with another business (the contractor) to perform a service or duty. 

The remote contractor will be subject to taxes based on their local country and must keep track of what they are paid so that they can make their own tax payments to their government. 

Hiring full-time remote employees in Europe without external support involves handling all the essential HR duties, including complying with the intricacies of paying employees in their home country. Alternatively, you can consider growing your global team effortlessly by teaming up with Justworks, as we offer global employer of record solutions. 

2. Know the Specific Country’s Tax and Employment Laws

Whether you plan to hire and pay full-time remote European employees or independent contractors, you will need to understand the tax and employment laws that govern the specific country you’re planning to hire in. 

Almost all countries in Europe have strong social security systems in place, especially compared to the US. Most Europeans receive healthcare benefits, pension, and paid time off, as guaranteed by the individual country. 

Taxes in Europe are calculated differently than taxes in the United States. European countries have more robust social security systems and benefits for citizens, so workers pay more in taxes. When hiring remote employees in Europe, you should be familiar with all of the necessary payroll and tax laws and regulations. 

3. Understand European Benefits Requirements 

If you work with remote independent contractors in Europe, you will not need to pay their employee benefits. Either the worker or the government will be responsible for administering benefits like pension or healthcare. However, if you plan to hire full-time remote employees, you will need to offer all of the benefits mandated by the government. 

Some countries, like Spain and Portugal, require employers to give their in-person and remote teams large chunks of paid time off. Other countries, including Germany and the United Kingdom, have strong social security benefits and taxes that employers are required to pay as a part of each employee’s compensation and benefits package. 

Even if you plan to only onboard remote independent contractors, you should still be aware of what workers are entitled to in their home country. Most importantly, if an employee is working full-time remotely but misclassified as an independent contractor, they can sue your company for any benefits they are owed. 

4. Remote Workers and U.S. Visa Laws

According to U.S. law, remote employees in Europe don’t need a visa to be employed by a U.S.-based company as a remote worker abroad. Foreign workers don’t need a work permit or visa to be employed by a U.S. company, as long as they aren’t performing any duties on U.S. soil. However, if you are employing a remote worker in another country, that employee will need a visa in order to legally live and work in the other country. 

5. Consider Cultural and Language Differences

Although hiring remote employees in Europe has many advantages, you should still consider time zone and language differences for your remote workers abroad. Some employees may have their regular work hours at the opposite time of standard U.S. work hours.

When you choose to hire employees in Europe, you should also be aware of the cultural differences that separate United States culture from different countries in Europe. Many countries in Europe highly value a strong work-life balance, so if you want to make the jump to hiring there, be respectful and do some research about how people go about their day-to-day lives in the country you plan to hire in.

Most importantly, you should strongly consider what language and cultural differences may exist. Many US-based employers are surprised when they hire employees in the UK and discover that, despite sharing a language, the country has a radically different culture. In countries where English isn’t the official language, the cultural differences can feel even more pronounced.

How Justworks Provides International EOR Services for Small Businesses

Focus on building your team, and leave worrying about the essentials of HR and international compliance to Justworks.

Our team of local experts ensures that your small business always remains compliant while expanding internationally. We handle the HR tasks and burdens so you can focus on what matters: managing your team. 

Ready to learn more? Get started with Justworks today!

FAQ

How do I hire remote employees in another country? 

To hire remote employees in another country, you will need to establish a legal entity, onboard them as independent contractors, or work with an EOR service like Justworks that already has established entities. 

Can you work a remote US job in Europe? 

Most of the time, you can work a remote US job from Europe. You will need to make sure you have the proper visas and pay attention to the taxes and other regulations in the country you’re living in. 

Can a U.S. company employ and pay someone in another country? 

Yes, a U.S. company can employ and pay someone in another country. Workers can be based in Europe but working for a U.S. company. You will need to hire them as either full-time employees or independent contractors. However, you will need to know the laws about establishing an entity in another country, as well as the tax and employment laws in the country the employee lives in. 

Can I live in Italy and work remotely for a US company? 

Yes, you can live in Italy and work remotely for a US company. However, if you're an American, you will need to have the proper visas and work permits as well as know the taxes and regulations as a foreigner living in Italy.