Hiring Remote Employees Outside of Ireland

When hiring and managing employees internationally, the legislation in the country where the employee is based will take priority. 

For example, if an Irish employer hires an employee living in France, they will probably have an employment agreement written by the Irish company. However, the employee is protected by French laws. This can affect anything from holiday leave to sickness benefit entitlements. French employees also have the right to disconnect, which means they can’t be penalised for not attending to work matters, such as replying to emails, outside their normal working hours. This can help remote employees who work from home have a better work-life balance. 

There is often a misconception that there are common employment laws that apply across Europe. There are a few EU directives around employment, such as the Working Time Directive. However, in most cases, employment laws are country-specific. 

For example, many countries use collective bargaining agreements. These are agreed rates of payment for people in particular sectors. Most countries also have very limited legislation regarding what must be included in an employment agreement. Some US states don’t even use employment agreements. Instead, employers can “hire at will, fire at will.” 

As an employer, you’re obligated to handle employment taxes and pay employer taxes, such as PRSI in Ireland, in the country where your employee is a tax resident. Check out our post on how to register for tax for more information.

Tax complexity will vary by country. For example, according to Revenue, a person is considered a tax resident in Ireland if they spend more than 183 days a year here. Alternatively, they must have spent 280 days in Ireland in the past 2 tax years, with a minimum of 30 days in each year. Things can become more complicated in other countries, such as the US, where tax obligations vary by state. 

Some countries may look attractive because of their lower cost of living, which allows employers to pay lower salaries. However, these savings can be offset by a high rate of employment tax. Boundless always advise talking to a tax professional in any country where you have tax obligations. 

The idea of traveling from country to country to work is becoming more popular. These employees are known as Digital Nomads. However, this can be very complicated from an employer‘s perspective. 

For example, employers need to confirm that their employees have the right to work in the country they’re located in. For visa purposes, the employee may have to define whether they’re on a holiday or a working holiday. They will have the right to protection from the laws of the country they are located in but may also be protected by the laws in their country of residency. 

This can cause problems if the employment laws in these two countries differ. For all these reasons, many employers do not support the employment of Digital Nomads. Many large companies will provide a list of countries where their employees can work from. They will be familiar with the employment laws in these countries.

A Professional Employer Organisation (PEO), like Boundless, will act as the Employer of Record (EOR) on your behalf. They will sign up for an agreement with the company that wishes to hire employees internationally. An agreement is then created between the employing company, Boundless, and the employee. This agreement is tailored to be compliant with the laws in the country where the employee is being hired. 

As far as the government is concerned, Boundless is the legal employer of the employee. They are responsible for ensuring local compliance, filing for taxes, and making payments to employees, local tax offices, and benefit providers. They act as the payroll processor and will provide proof of employment for employees, when needed, for example, if the employee was applying for a mortgage. 

Boundless will have a Limited Company or the equivalent set up in the country of employment. They will be registered for tax and have a local bank account. This is important as many countries require employees to be paid through a traditional bank account. Online banks such as Revolut or payments through Irish banks are not usually allowed for paying wages. 

The employer company is only responsible for the day-to-day management of the employee. Although Boundless is responsible for creating the employee contract (in compliance with local laws), the company will recruit and hire the employees they need and allocate their work responsibilities to them. 

If you’re thinking of working with an Employer of Record to hire talent outside of Ireland, consider: 

• Whether they will be the legal employer
• Whether they will be a direct employer or work through a partner
• How employer obligations are split between your company and the EOR

• The extent of their HR and payroll knowledge in the country you’re hiring in
• The structure of the employment contract
• What help they offer if you need to end an employment agreement  
• How responsive they are to their customer companies 
• How they manage payroll data and whether you will have an overview

• How they store and keep employee data safe
• How much it costs to employ someone through them
• Any additional terms of the agreement, including how it is terminated

Because of the legal risk they take, companies like Boundless will often pre-screen and interview companies before they will hire on their behalf. They don’t take on companies with hourly or seasonal employees. Employees need to be ongoing, full time and paid by salary. 

Boundless charge a minimum of €350 a month per employee or 8% of the salary of an employee. For this reason, they’re not often a good option for very low-cost businesses. 

You should keep in mind that some employees are more complex to deal with than others. For example, if you hire salespeople to sell out of another country, there will be tax and VAT implications depending on where the sale is made and where the customer is located. Boundless don’t deal with these issues, which is something you should be aware of if you’re considering employing salespeople in another country.