Compliance in Hiring and Payroll Abroad to EU, EEA and Switzerland

Arletti & Partners supports Italian and foreign companies in managing international hiring and payroll activation in the EU, EEA and Switzerland, so that your human resources can correctly manage workers operating in a country other than that of the employer or carrying out cross-border activities.  

The establishment of an international employment relationship may take place through different legal and organisational structures, including direct hiring, secondment by means of an assignment letter, procurement contracts or service supply agreements. The choice of the most appropriate solution depends on the structure of the relationship, the parties involved and the actual way in which the activity is performed.  

Approach and Operating Methodology  

Our service is based on a structured preliminary analysis that includes:  

• profiling of the employment contractual relationship, based on the headquarters of the company and the employee’s country within the EU, EEA or Switzerland;   

• identification and analysis of the contracting parties, including the employee, the formal employer, the entity benefiting from the work performance and any other person involved;   

• assessment of the operational and organisational structure of your project.   

This phase allows us to determine the most suitable and compliant contractual solution, reducing legal, tax and social security risks.  

Applicable Employment Law Solutions  

Based on the specific features of the case, we can support the structuring of the employment relationship through:  

• secondment or assignment letter;   

• procurement or service supply agreements;   

• temporary agency or staff leasing arrangements, where applicable;   

• direct hiring with activation of local payroll in the EU, EEA or Switzerland.   

Social Security  

With regard to social security, the service includes an assessment of the applicable social security regime within the EU, EEA and Switzerland, taking into account the structure of the employment relationship and the way in which theactivity is carried out abroad.  

 Where applicable, the analysis includes:  

• identification of the competent social security legislation;   

• verification of contribution obligations in the host country;   

• application of EU Regulations, including Regulation 883/2004, in cases of intra-EU mobility and the related management of coverage certificates, such as the A1 certificate;   

• application of social security coordination rules with EEA countries and Switzerland;   

• analysis of contribution obligations in the absence of applicable international coordination rules.   

Taxation and Ongoing Compliance  

The establishment of an employment relationship abroad within the EU, EEA or Switzerland inevitably involves the management of recurring tax and social security obligations, which may include, depending on the case:  

• preparation and management of local payslips or shadow payroll;   

• support with obligations relating to the payment of taxes and social security contributions;   

• assistance during the hiring and termination phases of the employment relationship;   

• monitoring of reporting obligations in the host country;   

• coordination of compliance with legal obligations across multiple jurisdictions.  

Immigration  

For immigration-related aspects, we assess the entry, stay and work authorisation requirements in the EU, EEA country or Switzerland where the activity will be carried out, taking into account the type of assignment, its duration and the structure of the employment relationship.  

This analysis allows us to identify in advance the necessary requirements to ensure full compliance of the international assignment.  

The assistance may include the verification and management of:  

• entry visas and residence authorisations where applicable;   

• work permits and the related application procedures;   

• registrations with the competent local authorities;   

• any further administrative authorisations required by the host country.   

Focus on the Employee Timesheet  

Our analysis and operational support are also based on the management of employee timesheets, an essential tool for:  

• correctly qualifying the employment relationship and the actual way in which the work is performed;   

• verifying physical presence in different EU, EEA and Swiss jurisdictions;   

• monitoring applicable tax and social security obligations;   

• managing and mitigating permanent establishment risk.   

Our Operating Process  

The service is based on a structured process that allows us to collect relevant information, carry out a multidisciplinary analysis of the case and identify the most suitable legal and operational solution.  

The activity begins with the collection of information relating to the worker, the employer and the international project through our dedicated channels. The data collected is then analysed by teams specialised in employment law, international taxation, social security and immigration.  

Based on the analysis carried out, we prepare a customised proposal for classification and services, which is presented during a dedicated follow-up call aimed at sharing possible operational solutions and related compliance requirements. 

Objective of the Service  

The objective is to ensure that companies manage international employment relationships within the EU, EEA and Switzerland in a structured, compliant and sustainable manner, guaranteeing:  

• correct identification of the most suitable contractual structure;   

• employment law, tax and social security compliance;   

• reduction of the risk of multi-jurisdictional disputes;   

• ongoing operational management of obligations connected with international mobility.