For every U.S. and U.K. business expanding into Europe, compliance with local, regional, and European laws and labor regulations is vital. These laws constantly evolve and HR (Human Resources) compliance in Europe becomes a crucial foundation for seamless and successful operations.
If your HR policies and procedures don’t adhere to compliance, you could open your company to litigious risks, could face fines and red tape, or even be forced to close your operations in European countries.
Whether you have pre-existing European operations, are looking to expand into Europe, or have a strategized startup ready to launch in Europe, here’s what every business needs to know about HR compliance.
What is HR compliance?
Transparent communication, employee relations, talent acquisition and retention, and benefits implementation are all crucial components of the successful HR employee’s role. However, HR compliance is the bedrock of an effective and productive HR team.
HR compliance ensures that your company’s policies and procedures adhere to all of the labor laws and employment regulations in effect in your country of operations.
For example, if you expand a U.K. or U.S.-based company into Europe, the policies and procedures you have in place at your headquarters may need to largely change based on the municipality, city, and country where your expansion is planned.
How European labor laws impact HR compliance
The key differences between labor laws in the European Union and the U.K. and U.S. may change some aspects of your expansion strategies. An outsourced HR team with thorough knowledge and familiarity of the nuances in European labor laws may be your best bet to ensure you remain within compliance.
Although HR compliance and specific labor laws may vary based on country, there are general European variances Let’s take a look at some of the key European labor laws, according to the EU (European Union), that may be new to you:
- No employee can work over 48 hours per week (this includes overtime)
- Employees must have at least 11 hours of consecutive rest between work shifts
- Mandated breaks are given to all employees who work 6 or more hours per day
- Most European countries will not allow you to terminate an employee contract without just cause
- Employment contracts are required
How employment benefits may differ between Europe and the U.S.
Variances in laws and differences in HR adherence to legal compliance are extremely important to understand, and the aforementioned are just some examples.
Similarly, the mandated and voluntary employment benefits in Europe may look much different than what you may be used to offering your employees at home. For example, in Denmark, HR professionals will find very robust employee benefits that vary wildly from those in both the U.S. and U.K.
Some of the different employment benefits offered in Europe may include:
- Federal benefit laws that mandate universal health care coverage
- A required period of maternity, paternity, and parental leave — parental leave gives workers the right to take off for up to 4 months to care for children under the age of 8
- European countries mandate paid vacation/holiday time — typically between 20 to 30 days per year
- Required paid sick leave is required in most European countries
- Employer-provided pensions are paid, even if a pensioner leaves their home country and move to another EU member country
- Personal development training is often offered by employers
- Frequent, paid federally observed holidays
The GDPR and how it impacts HR practices
The General Data Protection Regulation (GDPR) law was passed into European Union legislation in 2018. According to the EU, it’s the strongest law of its kind to be enacted anywhere in the world. The law enables strict protections of personal data collection by companies or marketers.
The impact of GDPR on HR compliance in Europe cannot be overstated. GDPR applies to any company offering goods or services in the EU, and can impact your HR compliance in the following ways:
- In order to remain within compliance of the regulation, companies must report all data breaches to authorities and inform impacted employees
- Companies must have a Data Protection Officer in place to oversee the personal data of employees
- Only essential personal information from employees may be kept by an employer
- Employees can select or delete non-essential personal data from their company files
- HR must have an Employee Privacy Notice in effect
- Companies must inform employees of where and how long their personal information will be stored
- HR teams that are found to be noncompliant with the GDPR can face fines of up to €20 million
Immigration compliance
If you’re planning on moving any employees or executives to oversee your European operations, your HR team will need to adhere to Europe-specific immigration compliance requirements as well.
Your foreign team can work for up to three months without a European work visa. However, each member will be required to cut through the extensive red tape it takes to obtain one. It’s vital that you have an HR team that thoroughly understands the immigration to work laws and who can adhere to compliance.
HR can help ensure compliance by instructing workers to fill out the work permit applications, managing any related documentation, and filing with the appropriate government organizations.
HR compliance in employment contracts and terminations
European labor law has many crucial safeguards in place to protect worker’s rights.If you own a U.S.-based business, mandatory employment contracts and termination requirements may be new to you and your team.
It may be strategic to choose to hire an outsourced HR team based in Europe and with demonstrated success in contract creation. You might find this step will prove pivotal in protecting your business and ensuring your employment contracts and terminations remain within legal compliance.
Contact Europe HR Solutions
HR compliance is paramount for any company considering European expansion. You may find that building an inhouse HR department at home to act as the foundation of your European operations will present numerous challenges, including compliance.
Every business needs to know the nuances of European labor laws in order to experience a successful transition. The outsourced team of HR professionals at Europe HR Solutions has a proven track record of reliable support and customized solutions for countless clients.
We help U.K. and U.S.-based small, mid-sized, and large companies remain within compliance as they expand or launch startups in Europe. We’re passionate about helping you successfully grow your business.
Contact us to explore how we can help you take your business to the next level as we provide your HR outsourcing needs.
