Frequently Asked Questions

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Welcome to our FAQ section!

EOR - Employer of Record general FAQ

1. Who is the employer - WorkMotion or are we the employer?

WorkMotion is the employer, not your company.

Employing talent abroad is linked to several compliance risks: on the corporate level (Permanent Establishment), and related to the employee directly (employment taxes, social security, labour law).

WorkMotion’s clients do not want to take on those responsibilities. WorkMotion can provide access to a global network of WorkMotion’s legal entities in over 140 countries. Those legal entities will then hire your talent, i.e. your employees will receive an employment contract by the local company. The local company takes on all of the responsibilities of an employer:
  • issuing the employment contract
  • setting up payroll
  • local registrations of the employee with authorities
  • calculating monthly payroll
  • payments to the employee, tax-authorities, social security, etc.
  • ensuring compliance with local labour regulations
  • etc.

2. Can existing contractors be brought into WorkMotion? Would they remain as contractors or become employees?

We currently do not offer management (e.g. payments, time-tracking, contracts) of contractors.

In the case you want to convert contractors to become employees, this is obviously not a problem for us.

3. We may want to hire a number of people in a given country and later set up an entity there, can these individuals then be converted to our employees?

Absolutely yes.

Many of our clients use WorkMotions’s Employer of Record model, to be able to quickly hire compliantly in a country. If your commitment to a country becomes more serious, e.g. you have more than 10 employees or want to do more business in the country, setting up a legal entity might be a good idea. In this case we will help to transfer the employees form our employment contracts to your company in a seamless way.

4. Are there any differences/benefits/increased risks in employing people in the EU versus anywhere else?

No.

WorkMotion covers 140+ countries and we treat all engagements the same, independently from the country.

Countries, of course, vary sometimes in terms of labour regulations (e.g. France vs. USA) or benefits that are statutory.

5. Is there a maximum length of time someone can be employed by WorkMotion?

It depends.

We always have to assess the regulation in the country, in which the work will be performed by your employee.

For example, in Germany, employee leasing is limited to 18 months. There are a handful of countries where similar rules apply.

In most countries, however, there is no maximum length.

6. Who bears any legal risks, costs or claims?

WorkMotion (in most cases).

WorkMotion is your compliance partner for employment abroad. We assume most risks associated with the employment of your talent.

When it comes to termination of employment, however, the “financial consequences” (e.g. severance payments, etc.) are borne by you (please refer to our guidance on terminations as well).

7. Some employers give additional flexibilities for people to spend time outside of their countries of employment within the EU - are you familiar with such setups?

Yes.

Please talk to us, as this is a very interesting topic, that requires a better understanding of needs/plans.

For example, we can help you set up flexible work policies for your company.

Work Permits & Visa

1. What systems do you have in place for monitoring the right to work in particular countries?

During the onboarding of a new employee we will check the work status. As the local Employer of Record we are responsible for employees having work permits.

Benefits

1. Can employees receive options, ESOP or RSUs?

This service is currently unavailable but it is under our prioritized development.

As a first step, you will have to look into the details of your own equits program: Can options / Virtual share be allocated to non-employees (eg. consultants, advisors, etc.). If this is the case, we can implement your program and tie it to the employment contract.

RSUs are a bit different, since normally they are taxed with income tax as they vest. We then have to check the regulation of the respective host country and will find a solution for you.

2. What kind of benefits does WorkMotion offer? Can we align to our benefit scheme?

WorkMotion always provides the necessary, statutory benefits in the host countries. In cases where benefits differ substantially from your country, we will flag that and offer options.

Example: In the US, where health-insurance is not statutory, you will have access to a wide range of health & dental insurance packages, pension, etc.

We can also align to your benefit scheme. A typical example is holidays: most of our clients prefer to offer the same amount of holidays abroad as they do in their HQ-country.

Employment contract

1. Does WorkMotion have standard notice periods or can we use our ones?

Both.

We do have standard notice periods in all of our countries, and they are the statutory ones. In case you want your company’s standard notice periods to be applied, you can let us know in the onboarding process of an employee using the WorkMotion platform. We will check if your standard notice periods are compliant with local regulations and then apply them to all your future hires via WorkMotion.

2. What is the termination process of an employee under WorkMotion’s Employer of Record model?

The termination of an employee’s contract is an unavoidable part of business that no one enjoys. Moreover, while domestically the legal framework around “hiring & firing” might be straight forward, abroad this process can look significantly different. Consequently, prior to hiring a new employee, it is imperative that an employer is aware of the local legal situation of their Employee for contract termination. Failure to adhere to the local laws and regulations could result in avoidable reputation damage and costly legal action. WorkMotion can provide you with support and guidelines in each respective country in order for you to be aware of the local stipulations and make a well informed decision.

Another great benefit of using WorkMotion as an Employer of Record is that we will ensure that in the hiring contract all the necessary clauses are specified and the procedure to terminate a contract is compliant with the local law. Therefore, WorkMotion takes responsibility for all international employee management tasks, including contract termination.

Timing

There are usually three points in time specified in a contract during which the termination procedure can differ, which lead to termination processes, that usually grow in complexity:

  1. Termination before the start of employment
  2. Termination during the probationary period
  3. Termination during continued employment

In any case, we strongly advise our clients to immediately inform WorkMotion about any conflict or development that could eventually lead to the requirement to terminate or dismiss a candidate, so that a joint strategy to achieve the same with the least damage to parties can be developed.

Steps

The general steps of the process for contract termination are as follows:

Step 1: Notification to WorkMotion that a contract has to be terminated

  1. A clause in our MSA (Master Service Agreement) looks as follows: “If Client is experiencing a performance-related issue with a specific Employee, Client agrees to notify WorkMotion as early as possible and prior to conducting any negative performance evaluation or initiating a termination action against the Employee so that Client and WorkMotion can work to minimize the termination costs and any other possible negative consequences of such action.

Step 2: Once you inquire about a termination of contract, WorkMotion will ensure that the local termination conditions shall be met and the notification period will be kept. To this end, we will inform you about the necessary next steps to be taken for each country, because every process has different nuances, depending on the local law

  1. Some examples:
  2. Austria - no grounds for dismissal required and employees with less than six months of employment have no protection against unfair dismissal
  3. France - termination of an employment contract is permissible only in limited and restricted circumstances.
  4. Czech Republic - statutory two months’ notice period
  5. Denmark - statutory one month’s notice period
  6. etc.

Step 3: Extra effort and the submission of relevant documents are frequently required, which we will then request from you when the time comes; these are specified in the country guides, which we can provide you with for the respective countries. For example, in the case of Germany, a written notice of termination is required, which needs acceptance in writing by the employee.

Step 4: We will schedule a session to sit together and brief you on the process to meet all the necessary requirements for the respective process, including deadlines that have to be met, rules that have to be followed in communication with the employee and other stipulations that are potentially required and what the legal power of the employee is.

Mutually agreed Termination

Employer and Employee also have the option to agree on a mutually accepted termination using a procedure laid down in the Labour Code. Please keep in mind that such agreements have strict form and content factors to consider, so we strongly recommend seeking WorkMotion's advice as soon as a case arises. Because mutually agreed-upon terminations may necessitate the payment of a severance (transition fee) and can be costly in terms of legal support.

3. What is the process/timeline of ending an employee’s contract with WorkMotion (i.e. do we need to give notice if this is earlier than the contract end date)?

If you decide to end an employee’s contract with WorkMotion, please let us know via the WorkMotion platform.

Depending on the country and its regulations, the process/timeline will differ. We always will ensure that such processes are compliant with local regulations, and will guide you through the process.

4. Can we incorporate our specific policies in the employment contracts?

Yes.

We just have to make sure that they are compliant with local labour regulations. Typically we can incorporate them as Annexes to the employment contract.

5. What type of contract would the employees have? A WorkMotion contract or aligned with our contract requirements?

Aligned with your contract requirements.

We do have template employment contracts in the 160+ countries that we cover. Those contracts are aligned with local labour regulations, and therefore differ from country to country.

Most of our clients, however, tell us specific contract requirements that they would like to have when employing abroad via WorkMotion. Integrating those requirements is not a problem for us, as long as the adjustments are compliant with local labour regulations (we will make sure they are).

6. Are employment contracts fixed or indefinite?

The default is indefinite contracts. If you require only a fixed / temporary contract, we can arrange that.

7. Is there a minimum length of time someone can be employed by WorkMotion?

No.

WorkMotion can arrange temporary employment as well. This is best suited if the talent is just temporarily in the respective country (e.g. for personal reasons), or might be relocated in the near future.

8. What is the employment status - contractors or employees?

Employees.

The contractor model is only suited in very rare instances, such as

  • temporary work/projects
  • the employee works for at least 2-3 other “clients”
  • the employee is free to choose her/his projects, tasks, etc.

WorkMotion’s clients typically want to enter into a normal employer/employee relationship: a long-term relationship between both parties, with full integration of the employee into the client’s culture.

For that reason, the contractor (=freelancer) model does not work.

With WorkMotion, your talent is employed with locally compliant employment contracts. This, of course, also includes that taxes, social security and other statutory or additional benefits are provided by you via WorkMotion.

9. Is the WorkMotion Employer of Record model available for all roles? Are there any restrictions on the type of work in this model, e.g. corporate tax?

For 98% of the roles WorkMotion’s Employer of Record model is perfectly suited.

Having said that, however, there are very few roles that might increase the risk of a PE (permanent establishment) in the host country. As a rule of thumb: The “higher the role” (e.g. C-level), the higher the risk for a PE. This also applies to roles of employees, might have a power of attorney or otherwise can sign contracts for your company (e.g. certain sales roles). During the onboarding process and when we set-up the employment together with our local teams, we can address your questions.

Payroll

1. What is the payroll set-up with WorkMotion (i.e. separate payroll, or linked to our payroll)?

Separate payroll done by WorkMotion.

As the local Employer, it is our responsibility to run payroll. As you know, payroll is a beast, and differs from country to country quite substantially. For that reason you don’t have to deal with it at all.

Via the WorkMotion platform we will ensure that payroll-relevant events (e.g. personal time off, sick days, etc.) are taken into consideration on a monthly basis.

Salary adjustments (or bonuses, etc.) can be done very easily from the WorkMotion platform.

2. Do we have access or insight into payroll, taxation, social security information for the individuals with WorkMotion?

Yes.

Payslips and all other relevant documentation are accessible in the WorkMotion platform.
If you still have questions after reading through the document, please do not hesitate to reach out to your trusted Account Executives!

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