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  • Legal system, currency, language

    Constitutional. Kwanza Portuguese.

  • Corporate presence requirements & payroll set-up

    A foreign entity can engage employees in Angola with proper payroll registrations, subject to business, corporate and tax considerations. The employer is responsible for withholding from an employee's pay, and delivering to the tax authority, income tax and contributions to Angolan Social Security. The level of income tax is defined by the government and varies in line with the employee's salary.

  • Pre-hire checks

    Required

    Immigration compliance and pre-hire medical examinations.

    Permissible

    Reference and education checks are permissible.

  • Immigration

    Criminal and medical checks must be issued by competent authorities and a criminal record issued by the home country and a medical certificate issued by a doctor in the home country.

    The visa/work permit requirements for overseas nationals to work in Angola are: having a recognized travel document valid for the Angolan territory for at least 6 months; being of legal age; not being included in the national list of undesirable persons prohibited from entering into the national territory; not constituting a danger to public order or to social security interests; complying with all health regulations established by the Ministry of Health for entry into the national territory; having an employment contract or promissory employment contract; having a certificate of professional and educational qualifications and curriculum vitae;  and obtaining a positive opinion of the competent Ministry.

  • Hiring options

    Employee

    Indefinite term contract (which is the rule), fixed-term or open-term (i.e., a term contract whose termination date has not yet been defined, but that will be terminated as soon as the underlying need for contracting is no longer verified: e.g., as a contract to cover absence), part-time contract, telework contract and contract under service commission regime (a particular type of contract for high-level employees which provides flexibility for termination - not common). There are no restrictions or requirements for a fixed or open-term contract. Part-time, fixed-term and open-term employees may not be discriminated against due to their status.

    Independent contractor

    Independent contractors can be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure.  The factors that will tend to indicate an individual is an employee (rather than e.g., a self‑employed independent contractor) are:  Existence of a work schedule, scheduling of vacation, the worker’s legal subordination to the company, the company’s authority, direction and disciplinary powers, and control of punctuality and attendance over the individual; integration in the structure of the company, and use of work tools belonging to the company, etc.

    In the event of misclassification, is the relationship can be converted into an employment relationship on a permanent basis and the employer could be liable to pay a fine for non-compliance.

    Agency worker

    Agency workers can only be engaged to fulfil a temporary need for work. The agency work contract duration depends on the underlying reason for hiring (typically not exceed 12 months). Agency workers have the right to equal treatment to employees in relation to pay and other regular benefits.

  • Employment contracts & policies

    Employment contracts

    Written employment contracts are common, but not mandatory, except for fixed-term, part-time, telework, and service commission regime contracts, and contracts with foreign employees and  under-age employees,. Employment contracts cannot contain conditions that are less favorable to employees than mandatory employment legislation.

    Probationary periods

    Permissible.

    Employment contracts for an unlimited period of time may be subject to a probation period corresponding to the first 60 days of performance of work; the parties may, by written agreement, reduce or waive this period.

    The parties may extend the probation period, in writing, to up to 4 months, in case of employees who perform highly technical, complex work that is difficult to evaluate, and to up to 6 months in case of employees who perform management duties.

    In an employment contract for a limited period of time, the parties may set forth a probation period, in writing, and its duration cannot exceed 15 days in case of non-qualified employees or 30 days in case of qualified employees. Angolan law does not define qualified and non-qualified but the common practice is that qualified employees correspond to positions that involve technical complexity, a high degree of responsibility or special qualifications, as well as those carrying out functions of trust.

    Policies

    Employers with more than 50 employees must, in order to organize the work and labour discipline, draft and approve employee handbooks, guidelines, instructions, service orders and work rules defining rules for the technical organization of work, performance of work and work discipline, delegation of powers, employee job descriptions, safety, hygiene and health protection of work, performance indicators, remuneration system, working hours for the several sections of the company or work centre, control of entrances and exits and circulation within the premises of the company, and surveillance and control of production.

    Employer with 50 or fewer employees may, but are not required to, implement employee handbooks on the matters described above.

    Third-party approval

    Whenever the employee’s handbook or any other rules and regulations establish any rules on performance and discipline, remuneration systems, work performance or safety, hygiene and health protection at work, the employer must forward such regulations for information and registration purposes to the General Labour Inspectorate.

  • Language requirements

    Portuguese. Nevertheless, the employment contracts/other documents can be drafted in a bilingual template.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    All employees are entitled to minimum employment rights.

    Working hours

    Maximum daily and weekly working hours are 8 hours per day and 44 hours per week. Overtime pay is required for hours worked in excess of these limits. These limits are inapplicable to employees who perform direction and leadership duties, duties of inspection, or provide direct support to the employer. In case the employee usually performs his/her work outside the company's premises, an exemption regime may also be agreed upon by the parties, in which case those limits shall not apply. Typically, employees under the exemption regime are entitled to an exemption bonus.

    Overtime

    Overtime is allowed to deal with an extraordinary increase in workload, or to prevent serious damage, or if due to majeure force. It is subject to maximum limits: (a) 2 hours per day; (b) 40 hours per month and (c) 200 hours per year.

    Overtime must be compensated with additional payment (increase of hourly rates) up to 30 hours per month: 50 percent. 30 percent, 20 percent and 10 percent depending on whether it is a large, medium, small or micro company dependent on number of employees and turnover. A company which is a subsidiary or branch in Angola of a company with headquarters abroad will always be qualified as a large company. Overtime that exceeds that limit is paid for each hour at an additional: 75 percent, 45 percent, 20 percent and 10 percent depending on whether it is a large, medium, small or micro company.

    Wages

    The minimum wage is established by Presidential Decree. It is set out as a general minimum wage, but there is also a minimum wage for trade and extractive industry groups, transport services and manufacturing groups and agriculture groups. Under the Decree currently in force, the general minimum wage is Kz 21,454.10. The following sector-specific minimum wages also apply:

    • trade and extractive industry groups: Kz 32,181.15;
    • transport services and manufacturing groups: Kz 26,817.63; and
    • agriculture groups: Kz 21,454.10.

    Vacation

    Minimum 22 working days per year (plus 12 public national holidays).

    Sick leave & pay

    Employees are entitled to take off as much time as they need for sick leave. For large and medium companies: In case of incapacity to work due to illness or common accident, pay is required, in the amount corresponding to 100 percent of the base salary for a period of 2 months. For as long as the employee is not entitled to protection in case of illness or common accident from the social security authorities, the employer must pay to the employee 50 percent of salary from the third to the 12th month.

    In case of small and micro companies: The employee is paid, in case of illness or common accident, the amount of 50 percent of the base salary, within 90 days, after which the contract is terminated by expiration if the condition of illness remains.

    Maternity/parental leave & pay

    A pregnant employee is entitled to a paid maternity leave of 3 months. The amount of the maternity allowance is equal to the average of the 2 best monthly salaries from the 6 months preceding the commencement of the maternity leave. The maternity allowance is paid directly by the employer to the employee and, subsequently, the Social Security services reimburse the employer in full. Fathers are not entitled to any leave on the birth of a child; it is only considered as a justifiable reason for absence from work for 1 day.

  • Discrimination

    Discrimination based on the following protected characteristics is prohibited: race, colour, gender, ethnic origin, marital status, origin or social rank, religious beliefs, political opinion, union affiliation and language.

  • Benefits & pensions

    Both employer and employee have to pay contributions to Social Security in Angola to cover various employee benefits (i.e., maternity leave payment and retirement pension). The employer must withhold the contribution due by the employee and deliver both contributions (employer and employee) to Social Security every month.

    Current general rates are 3 percent of the gross wage for the employee and 8 percent for the employer.

    Employees with a minimum contributory period (35 years) qualify for a retirement pension at age 60 or in cases of total incapacity.

    Employers have no legal obligation to provide complementary/supplementary social benefits in addition to the social coverage provided for by the social public scheme. However, some companies – mostly large companies or multinational companies who have their own schemes worldwide – set up and provide private complementary health and pension schemes to their employees.

  • Data privacy

    The Data Privacy Law No. 22/11, June 17, governs Angolan data privacy and determines, in general terms, how to collect, use, disclose, store and give access to "personal information."

    There is no specific regulation on employee data privacy.

  • Rules in transactions/business transfers

    Provided that the same business activity is maintained, the new employer takes the position of the former employer in the employment contracts and takes its position in respect of the rights and obligations arising from the employment relationships This is the case even if the employment contract is terminated before the transfer. The new employer takes its position as the employer of such former employees in respect of due and non-paid credits. All credits, rights and obligations of the employer arising from the execution and implementation of the employment contract, its violation or termination, are subject to a statute of limitations of 1 year starting on the day following the day of termination of the contract. The employees keep the same seniority and  acquired rights which they had in the service of the former employer.

    The new employer undertakes the obligations of the former employer limited to those incurred during the 12 months prior to the modification, provided that up to 22 business days prior to the modification, the new employer gives notice to the employees that they must claim their credits up to the second business day prior to the date scheduled for such modification. Within 22 business days following the modification of employer, the employees have the right to terminate the employment contract with prior notice, but this does not confer any right to compensation.

  • Employee representation

    Employee representative bodies are permissible, but not mandatory.

    Trade Unions are not common in Angola.

    In order to carry out their duties, trade union representatives are entitled to 4 paid hours a month, but must notify the employer in advance of the date and number of days they require for the exercise of trade union functions. Employers are obliged to provide a suitable place for workers' meetings whenever this is requested by the union representatives.  Special protections against dismissal are granted to employees who perform, or have performed, duties as Union Representatives, either as leader or delegate, or members of the employees’ representative body performing union related activities.

  • Termination

    Grounds

    Unilateral termination by the employer: dismissal based on objective grounds (redundancy reasons); disciplinary dismissal with just cause (based on serious breach of the employee's duties).

    Termination without cause (with notice): only for employees hired under an employment contract of service commission regime (a particular type of contract for high-level employees which provides flexibility for termination - not common).

    Other termination causes: mutual agreement, termination by the employee (termination with notice or constructive dismissal with just cause), expiration (fixed-term and open-term contracts, retirement).

    Employees subject to termination laws

    All employees.

    Restricted or prohibited terminations

    Special protection against dismissal is granted to: employees who perform, or have performed, duties as Union Representative, either as leader or delegate, or member of the employee’s representative body performing activities; women covered by the regime of maternity protection; war veterans as per the definition provided by the applicable law; employees under the legal age; employees with a reduced work capacity or with a disability degree equal or higher than 20 percent.

    As a general rule, a copy of the notice served on the employee must be forwarded to General Labour Inspectorate.

    Third-party approval for termination/termination documents

    Except in respect of protected employees, third-party approval is not required to terminate an employment.

    Mass layoff rules

    If economic, technological or structural circumstances occur, which can be clearly demonstrated and which involve an internal reorganization or conversion, or the reduction or the shutting down of activities, which makes it necessary to eliminate or significantly change job positions, the employer may terminate the employment contracts of the employees who perform such job positions.

    Collective dismissal rules will be triggered if the dismissal involves at least 20 employees.

    Information to the General Labour Inspectorate is required. However, there is no need to obtain approval for termination.

    The General Labour Inspectorate may undertake the diligence deemed necessary to a better clarification of the situation and, in case of a collective dismissal, during the period in which the evaluation of the General Labour Inspectorate occurs, the employer may promote a meeting with the representative body or with the Committee appointed for the purpose of exchange of information and clarification, and may forward the conclusions of the meetings to the General Labour Inspectorate.

    Notice

    For individual dismissals based on objective grounds (up to 20 employees): the employer must forward, at least 30 days in advance, prior notice of dismissal to the employee or employees who occupy the job positions to be extinguished or transformed.

    For collective dismissal: the prior notice is 60 days.

    Notice periods in case of term contract: 15 business days if its duration is equal to or higher than 3 months.

    Statutory right to pay in lieu of notice or garden leave

    Payment in lieu of notice is permitted (and required if the notice period is not honoured).

    Garden leave is allowed during the notice period.

    Severance

    Fair dismissal based on objective grounds (redundancy/collective dismissal):

    • Large companies: compensation corresponds to 1 base salary for each year of effective service up to the limit of 5 and an additional 50 percent of the base salary multiplied by the number of years of service that exceed such limit;
    • Medium companies: compensation corresponds to 1 base salary for each year of effective service up to the limit of 3 and an additional 40 percent of the base salary multiplied by the number of years of service which exceed such limit;
    • Small companies: compensation corresponds to 2 base salary and an additional 30 percent of the base salary multiplied by the number of years of service which exceed the limit of 2 years;
    • Micro companies: compensation corresponds to 2 base salary and an additional 20 percent of the base salary multiplied by the number of years of service which exceed the limit of 2 years.

    Fair disciplinary dismissal: no severance.

    Higher severance payments may be agreed and are usual as a way to avoid litigation.

  • Post-termination restraints

    A clause of the employment contract which restricts the activity of the employee for a period of time, which may not exceed 3 years from the termination of the contract, is lawful if the following conditions are met: (a) such clause is included, in writing, in the employment contract, or in its addendum; (b) the activity performed may cause real damage to the employer and may be considered as unfair competition; (c) the employee is paid a salary during the period of restriction of work: the corresponding amount will be included in the contract or its addendum, and it must be taken into account, in its calculation, the fact that the employer may have incurred in significant expenses in the professional training of the employee.

    A clause which requires an employee who benefits from professional improvement or higher level education at the expense of the employer to remain at the service of the same employer for a certain period of time, provided that such period does not exceed 1 year, in case of training of professional improvement and up to 3 years in case of courses of high level education, is also lawful if established in writing. In this case, the employee may release himself/herself from remaining at the employer’s service by repaying to the employer the amount of the expenses incurred by the employer, in proportion to the remaining time until the term of the agreed period. The employer that hires the employee within the period of restriction of activity in the company is jointly liable for the damages caused by the employee or for the amount not returned by the employee.

  • Waivers

    In principle, statutory rights cannot be waived and any waiver of such rights will be null and void.

  • Remedies

    Discrimination

    Fine corresponding to 5 to 10 times of the average salary paid by the company.

    Unfair Dismissal

    The employee may challenge the validity of the dismissal before the labour courts.

    If the relevant court declares the dismissal to be unlawful, by final judgment, the employer must immediately reinstate the employee in the same job position and benefiting from the same previous conditions, or, alternatively, shall indemnify the employee (compensation is different depending on whether it is a large, medium, small or micro company and the cause of dismissal).

    In addition to reinstatement or the compensation, the employee is entitled to the base salaries he/she would have received if he/she  had continued to perform work, until the date on which the employee finds a new job or up to the date of final judgment, whichever comes first, with a maximum limit of 6 months of base salary for large companies, 4 months to medium companies and 2 months for small and micro companies.

    Failure to inform and consult

    Not applicable.

  • Criminal sanctions

    Typically, non-compliance with employment laws leads to administrative proceedings which may lead to the payment of fines. If such non-compliance is based on violation of rights that deserve protection under criminal law, it may also lead to this type of judicial proceedings.

  • Key contacts

Hiring options

Angola

Employee

Indefinite term contract (which is the rule), fixed-term or open-term (i.e., a term contract whose termination date has not yet been defined, but that will be terminated as soon as the underlying need for contracting is no longer verified: e.g., as a contract to cover absence), part-time contract, telework contract and contract under service commission regime (a particular type of contract for high-level employees which provides flexibility for termination - not common). There are no restrictions or requirements for a fixed or open-term contract. Part-time, fixed-term and open-term employees may not be discriminated against due to their status.

Independent contractor

Independent contractors can be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure.  The factors that will tend to indicate an individual is an employee (rather than e.g., a self‑employed independent contractor) are:  Existence of a work schedule, scheduling of vacation, the worker’s legal subordination to the company, the company’s authority, direction and disciplinary powers, and control of punctuality and attendance over the individual; integration in the structure of the company, and use of work tools belonging to the company, etc.

In the event of misclassification, is the relationship can be converted into an employment relationship on a permanent basis and the employer could be liable to pay a fine for non-compliance.

Agency worker

Agency workers can only be engaged to fulfil a temporary need for work. The agency work contract duration depends on the underlying reason for hiring (typically not exceed 12 months). Agency workers have the right to equal treatment to employees in relation to pay and other regular benefits.

Argentina

Employee

Full-time, part-time, fixed-term, indefinite-term employees or trainees.

The following factors tend to indicate a labor relationship: availability to work for their employer, an employer who directs and subordinates the individual, and an employer who instructs the services and duties required and creates the individual's schedule. Courts will also look at the extent to which the worker depends economically on the employer.

Independent contractor

Contractors should only be engaged where there is no labor relationship – that is, no direction/subordination or economic dependence.

Misclassification – that is, failure to register an individual as an employee – or submission of an incomplete or defective registration carries the risk of severe sanctions and fines from the authorities, including amounts owed to social security for unpaid contributions. In addition, steep fines are levied upon statutory severance, including the doubling of the amount of severance owed to a (misclassified) employee.

Agency worker

Employers may engage workers through agencies. Agencies must be authorized by the authorities to function as an agency.

The employer is jointly and severally liable with the agency for all labor obligations arising from the worker's employment.

Australia

Employee

Individuals can be recruited on either a full-time, part-time or casual basis (which means that they are employed by hour or by day) or a fixed-term contract for a limited duration.

Independent contractor

Independent contractors can be engaged directly by the company or via a personal services company.

Agency worker

Agency or temporary workers are used widely by some organizations for short periods. Agency staff are not engaged as employees of the business where they are placed on assignment.

Austria

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status.

Independent contractor

Independent contractors may be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure.

Agency worker

Agency workers are common and are either employees or workers. Agency workers have the right to equal treatment to employees in relation to pay and other benefit terms.

Bahrain

Employee

Unlimited or fixed-term. Part-time employment is legally possible but is not common.

Independent contractor

There is no concept of a consultant, unless individuals have established their own professional license and business.

Agency worker

There is no general concept of an agency worker or "temp" in Bahrain. Some Bahraini-owned employment agencies are licensed to provide manpower on a temporary basis; such employees remain under their sponsorship.

Belgium

Employee

Indefinite, fixed-term (including specific assignment), full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status. Sales representatives, home and teleworkers, and students, among others, also have the right not to be discriminated against for their status.

Independent contractor

Independent contractors may be engaged directly by the company or via a personal services company. Engagement may be subject to requalification of the service agreement to an employment contract.

Agency worker

Agency workers are common, but may only be employed to temporarily replace an employee whose employment contract is terminated or suspended, to address an extraordinary increase of the work load, or to fill in a vacancy. Each type of agency work is subject to strict conditions and is limited in time. Agency workers have the right to equal treatment to employees in relation to pay and other benefits.

Brazil

Employee

Indefinite, fixed-term, full-time or part-time (intermittent).

Independent contractor

Independent contractors may be engaged directly by the company or through an entity. Engagement may be subject to misclassification exposure.

Agency worker

Agency workers are hired by temporary work agencies to render services to the temporary agencies' clients. Agency workers are entitled to various employment rights. 

Canada

Employee

Indefinite, fixed-term, full-time, part-time or casual. Employers can generally provide for differential treatment between these categories of employees; however, basic employment standards apply to all categories in most Canadian jurisdictions.

Independent contractor

Independent contractors can be engaged directly by the company or via a personal services corporation. The use of independent contractors creates misclassification exposure, which can give rise to tax, social security contribution and workers' compensation liabilities. It can also create potential claims for overtime, vacation, holiday pay and notice of termination. Classification may be different under different statutory schemes, and care needs to be taken to ensure the relationship is not truly 1 of employer/employee.

Dependent contractor

In some Canadian jurisdictions, courts have recognized the concept of a dependent contractor, which is similar to an independent contractor except that the individual exhibits economic dependence and near-complete exclusivity with the employer. As with the use of independent contractors, the use of dependent contractors creates misclassification exposure, which may include tax, social security contribution and workers' compensation liabilities. It can also create potential claims for overtime, vacation, holiday pay and notice of termination. Classification may be different under different statutory schemes, and care needs to be taken to ensure the relationship is not truly 1 of employer/employee.

Agency worker

The use of agency workers is common in some industries. Certain jurisdictions in Canada have special rules intended to provide protections to agency workers and may deem the contracting company liable if the agency fails to pay wages or provide required benefits to its workers. Many statutory regimes also have a mechanism for declaring a contracting company the true employer, a co-employer or common employer under applicable legislation.

Temporary foreign worker

Canada also has a program that permits employers to hire temporary foreign workers to fill temporary labour and skills shortages when qualified Canadian citizens or permanent residents are not available.

In Canada, the hiring of temporary foreign workers is regulated by the Temporary Foreign Worker Program (TFWP). In some cases, when hiring a temporary foreign worker, an employer may be required to demonstrate, after having met specific advertising requirements, that the hiring of the temporary foreign worker will not have a negative impact on the Canadian labor market. Some Canadian jurisdictions have statutes and regulations that apply specifically to the employment of foreign nationals working in particular industries.

Chile

Employee

Indefinite, fixed-term, or task-specific. Employees can be hired part-time (up to 30 hours of work per week) or full-time.

Fixed-term employment agreements have a maximum duration of 12 months. However, this can be extended to 24 months for employees holding a technical or professional title granted by an educational institution recognized by Chile.

Independent contractor

Permissible. Chilean law authorizes companies to outsource all kind of services, including the core business, or specific tasks such as cleaning services, canteen, etc. In this case, workers are dependent and subordinated to the contractor company, and not to the principal (client).

If the contractor company breaches labor or social security payment obligations towards its employees (including severance compensation), the principal (client) will be jointly liable for them, limited to the period that workers were assigned to render services for the principal. The principal (client) can mitigate against such liabilities by regularly checking compliance with employment and social security obligations.

Agency worker

Outside labor through personnel supply companies can only be hired for specific purposes defined by law and only for short periods of time, which vary according to the cause invoked for using agency services (such as temporary replacement of sick employees). The personnel supplier is responsible for the worker and is required to satisfy the respective social security and labor obligations. In cases where these obligations are not met, the company who has obtained the temporary worker has subsidiary liability.

China

Employee

Indefinite, fixed-term, full-time or part-time. Note that, after 2 consecutive fixed-term contracts, the employee may be entitled to an indefinite-term contract.

Independent contractor

It is uncommon for independent contractors to be engaged directly. Such a relationship is likely to be considered de facto employment.

Agency worker

Labor dispatch arrangements are becoming increasingly regulated in terms of treatment of labor dispatch workers and the numbers that can be hired within a single workplace. Because of this, labor dispatch arrangements are becoming a less attractive hiring option.

The rules are more relaxed for representative offices as they cannot hire local staff directly and must therefore rely on agencies.

Colombia

Employee

Indefinite, fixed-term or for the duration of a project.

Fixed-term agreements cannot exceed 3 years but may be extended indefinitely. If the duration of the contract is less than 1 year, it can be extended 3 times (with each renewal equal to or less than the initial term) but, after the third renewal, the contract may only be extended for periods of 1 year.

Independent contractor

Independent contractors may be engaged. Specific rules regarding direction and control, subordination and autonomy in how they perform the work must be followed in order to reduce misclassification exposure. Independent contractors are obliged to pay social security contributions monthly in arrears.

Agency worker

Staffing agencies or "temporary services agencies" are entities that provide services to third-party beneficiaries to temporarily assist in the development of their activities via individuals hired directly by the staffing agency. The agency acts as the individual's employer.

Agency workers may only be hired in 3 cases:

  • For occasional or sporadic activities
  • For replacement of employees on vacation, maternity or sick leave, or
  • To support production increases, for a period of up to 6 months, which is extendable for 1 further period of 6 months after which the employer must either terminate the engagement or hire the worker directly.

If none of these scenarios apply, the company receiving services from the agency may be considered the employer of the agency workers and/or may be subject to monetary sanctions including a fine of up to 5,000 times the minimum monthly wages which may be imposed by the Ministry of Labor.

Czech Republic

Employee

Indefinite, fixed-term, full-time or part-time. Part-time employment must be individually agreed with the employee. There are several limitations on fixed-term employment relationships (ie, maximum 3 years and 2 renewals, subject to certain exceptions). Part-time and fixed-term employees have the right not to be discriminated against on the basis of such status.

Independent contractor

Independent contractors may be engaged. Such an engagement may be subject to the risk of exposure for misclassification (so-called "illegal work") if the given relationship has signs of dependent work.

Agency worker

Agency employees have a right to treatment that is equal to other employees in relation to pay and other employment terms.

Other options

Under Czech law, there are 2 other employment options based on either an "agreement on work performance" or an "agreement on work activity."

  • Agreement on work performance: maximum 300 hours per calendar year; more flexibility, especially in relation to the termination procedure; less administratively burdensome; social and health insurance contributions payable only from certain remuneration thresholds.
  • Agreement on work activity: hours worked must not exceed, on average, 1/2 of regular working hours (approximately 20 hours per week); more flexibility, especially in relation to the termination procedure; less administratively burdensome; social and health insurance contributions payable only from certain remuneration thresholds.

Denmark

Employee

Indefinite, fixed-term, full-time, part-time or freelance (with employee status). Part-time and fixed-term employees may not be discriminated against on the basis of such status. White-collar workers are typically covered by the Danish Salaried Employees Act.

Independent contractor

May be engaged directly by the company or via a personal services company. Danish courts will look at the reality of the engagement in assessing whether an independent contractor has been misclassified and is actually an employee and therefore covered by the Danish employment law protections.

Agency worker

Permissible. Must receive minimum pay and benefits corresponding to what they would have received had they been directly employed by the end-user.

Finland

Employee

Unless otherwise agreed, an employment contract is valid until further notice. An employment agreement may either be full-time or part-time. If justified reasons exist, an employment agreement may also be fixed-term.

Independent contractor

Independent contractors typically work under a business name or through a company. Independent contractors are not considered to be in an employment relationship, but there's a risk of an employment relationship if the independent contractor actually works under the supervision and control of the employing company.

Agency worker

Agency workers are commonly engaged under fixed-term contracts, but there must be a justified reason for using a fixed-term contract. Employees must be treated equally, and temporary employment is not a reason to discriminate against agency workers. Some collective bargaining agreements (CBA) limit the use of agency workers in the line of business in question. The CBA applicable to the employment terms of agency workers is typically the CBA applied by the user.

France

Employee

Indefinite-term employment contract (CDI),which is the rule, or fixed-term contract (CDD), which is only permissible in limited circumstances.

The employment contract may be full-time or part-time.

Part-time and fixed-term employees enjoy the same rights as regular employees.

Independent contractor

Independent contractor relationships are permissible. There is a risk of reclassification into an employment contract and a finding of "concealed" work if a relationship of subordination is demonstrated.

Agency worker

Agency workers are strictly regulated by the French Labor Code.

Germany

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status.

Independent contractor

Independent contractors can be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure with high financial risk. Work instructions and organizational integration, in particular, will jeopardize the independent contractor position.

Agency worker

Agency workers shall not work for unlimited periods of time at the same business. The agency is required to hold a special permit granted by the Federal Employment Agency. Agency workers have the right to equal treatment to employees in relation to pay and other benefits terms, unless a specific collective agreement provides otherwise. As of April 1, 2017 there is a statutory maximum lease period of 18 consecutive months for an individual agency worker with the same client (amendment by collective agreements possible). On the expiration of such period, the employees must either become permanently employed with the employer or must be withdrawn by the temp agency. Also, the contractual agreement needs to be declared openly as agency work, and the exact agency worker needs to be determined before the start of agency work.

Hong Kong, SAR

Employee

Indefinite, fixed-term, full-time, part-time or casual.

Independent contractor

Independent contractors may be engaged directly by the company or via a personal services company.

Agency worker

Typically, agreements between the agency and the end user stipulate that the end user is not the employer, while an agreement between the worker and the agency stipulates that the worker is either self-employed or an employee of the agency. The placement may be for a fixed term or may be open-ended. The Employment Ordinance (EO) and Employment Agency Regulations regulate employment agencies.

Hungary

Employee

Employment may be established for either an indefinite or fixed term as full-time or part-time employment.

Independent contractor

Independent contractors may be engaged through a company using service contracts on a civil-law basis. There are several criteria which help to decide whether a specific service may be provided by an independent contractor or if an employment relationship must be established.

Agency worker

Employers may enter into crew leasing agreements with temporary workers' agencies in order to employ temporary agency workers. The engagement of a temporary agency worker by the same receiving employer is limited to a maximum of 5 years.

Equal conditions of work and employment must be given to employees employed directly by the receiving employer and to temporary agency workers. Equal treatment in respect of remuneration and benefits is required from the 184th day of employment of a temporary agency worker.

India

Employee

There are 2 categories of employees: workmen and non-workmen. A workman, as defined under the Industrial Disputes Act, 1947 (ID Act), is any person employed in any industry to do any manual, unskilled, skilled, technical, operational, clerical or supervisory work for hire or reward. Those mainly employed in a managerial or administrative capacity, or those employed in a supervisory capacity (and earning more than INR10,000 per month) and sales employees (other than those employed in certain notified industries such as the pharmaceutical industry) are non-workmen. The IR Code has replaced references to “workman” with “worker” to make the term more gender neutral, and the definition of worker varies slightly from that of a “workman” under the ID Act and would include sales promotion employees.

Whether an employee is a workman or a non-workman is a matter of fact which can be determined on the basis of the nature of the employee's duties and the job description. If the employee is a workman, the employer must to comply with certain labor and industrial laws, such as the Industrial Disputes Act, 1947. If the employee is a non-workman, the terms and conditions of their employment are primarily governed by their contract of employment with the employer. However, in some circumstances, employees (both workmen and non-workmen) may still be governed by the state-specific shops and establishment legislation (S&E Acts), which apply to most companies engaged in commercial activity. Employment may be indefinite, for a temporary term, full-time or part-time. The new labor codes formally recognize fixed-term employment structures and, once the codes are in effect, such employees would be eligible to certain employment benefits that may currently not be available to them, such as gratuity payment.

Legislation has established various Employment Exchanges, which public establishments and certain private establishments must notify of any vacancy before a post is filled. No employer is, however, obliged to recruit any person through the Exchanges. Further, under the SS Code, the coverage of the Employment Exchanges Act has been broadened to include career centers, vacancies and persons seeking services of career centers and employers. The SS Code, when in force, will replace the Employment Exchanges Act.

Recruitment may also be conducted through recruitment agencies, labor contractors, advertisements in newspapers and on-site recruitment at the establishment.

Independent contractor

Independent contractors may be engaged. A person is an independent contractor when a company designates the deliverables sought, and the person is free to carry out the work in the manner they deem fit, as long as the timelines and the quality of deliverables are met.

Establishments tend to engage independent contractors or consultants especially for activities where professional expertise is required for the business. Some employers also engage contractors to augment their workforce. However, if, in reality, the nature of the working relationship is one of employment, there is a risk of misclassification. If misclassified, such ''contractors'' are entitled to the same employment benefits as the regular workforce.

Definitions of gig workers and platform workers, among others, have been introduced under the SS Code. “Gig worker” is defined as a person who performs work or participates in a work arrangement and earns from such activities outside of traditional employer-employee relationship. Further, a platform worker is defined as a person engaged in or undertaking platform work. Such workers also work outside the traditional employer-employee relationship in which organizations or individuals use an online platform to access other organizations or individuals to solve specific problems or provide services or any such other activities which may be notified by the central government, in exchange for payment. The SS Code also requires mandatory registration of the gig workers and platform workers.

Agency worker

The practice of employing agency workers or contract labor is prevalent to varying degrees in almost all industries and services. It is more prevalent in labor-intensive sectors such as manufacturing, mining and construction industries.

Legislation regulates the employment of labor through intermediary contractors, regulates the manner of their deployment (including obtaining requisite registration certificates and licenses) and empowers the appropriate government to abolish such arrangements in certain circumstances. The intermediary agency is liable to provide amenities and pay wages including payment of social security, if applicable, to its employees deployed at the client's (referred to as the principal employer) workplace and, if it fails to do so, the principal employer is responsible, but may recover its costs from the intermediary agency. The OSH Code prohibits principal employers from engaging contract labor in core activities, subject to certain circumstances. The OSH Code provides a list of non-core activities where the prohibition would not apply, such as housekeeping, security and canteen.

Indonesia

Employee

Law No. 13 of 2003 (Manpower Law) divides employees into 2 categories:

Definite-term Employees: employees under a definite or fixed-term employment agreement. Also known as "contract workers." May perform work to be performed and completed at once or work which is temporary; work the completion of which is estimated to be accomplished within a period of time (in practice, not longer than 3 years); seasonal work; work that is related to a new product, new activity or additional product which is still in the experimental stage or try-out process. A foreigner may only work under a definite term of employment and cannot therefore be a permanent worker.

Indefinite-term Employees: employees who do not fall into the category of definite-term employees. Also known as ''permanent workers.''

Employees can be engaged on a full-time or part-time basis.

Independent contractor

Can be engaged but should not be provided with fees or benefits which could be deemed as salary or employment benefits as they may be deemed to be employees. The independent contractor should also not be treated as an employee (eg, by imposing statutory working hours). Not separately regulated but will fall under general contract law.

Agency worker

Outsourcing of labor or business services is subject to significant regulatory restrictions and requirements which, if not met, may mean that the agency worker becomes an employee of the outsourcing user.

Ireland

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against on the basis of their status.

Independent contractor

Independent contractors may be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure.

Agency workers

Agency workers are common. Agency workers have the right to equal treatment to employees in relation to pay, working hours and other benefits.

Israel

Employee

Indefinite, fixed-term, full-time or part-time. Israeli law requires companies to send candidates periodic notices regarding the status of their applications and to provide notice where the candidate is not chosen for the position.

Independent contractor

Independent contractors can be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure.

Agency worker

Agency workers will typically be either white- or blue-collar workers. Certain agency workers have the right to become employees of the employer after 9 months, and receive rights and benefits equal to these provided to employees at the same work place. Special rules apply to entities that engage agency workers providing security, catering and cleaning services.

Italy

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status. Additional engagement options are available, such as on-call employment, job sharing or apprenticeships.

Independent contractor

Independent contractors can be engaged directly by the company, provided that certain requirements are met. Freelancers can also be engaged on an open-term basis, but there is increased misclassification exposure.

Agency worker

Agency workers are common. Agency workers have the right to equal treatment to employees in relation to pay and other benefits terms.

Japan

Employee

Most employees will fall into 1 of 3 categories: regular employee, fixed-term contract employee, or dispatched employee. Employment can also be full-time or part-time. Starting from April 2013, if a fixed-term contract employee concludes a fixed-term contract for more than 5 years with renewal(s) and there has been no break in employment of 6 months or longer, the employer must make the employee an indefinite-term employee upon the employee's request.

Independent contractor

Independent contractors can be engaged, but care must be taken not to control or direct independent contractors, as such action can lead to the independent contractor being deemed an employee.

Agency worker

Hiring dispatched workers is popular because it can lessen some of the burdens associated with the employment relationship. The employees sent by the dispatching agency are direct employees of the agency and not the company utilizing their service. There are strict limitations on the positions that can be filled by dispatched employees, control over the employee and time limits on how long a dispatched employee can be used for the same position. The area is very heavily regulated and penalties for violations are severe. Only reputable and licensed dispatching agencies should be used.

Kenya

Employee

Indefinite-term, fixed-term, full-time or part-time. All employees are entitled to fair labor practices, and the employment relationship is regulated either by statute, contract or the collective bargaining agreement (CBA), in the case of unionized employees.

Independent contractor

Independent contractors may be engaged directly by a personal services company, and the terms of service are regulated by the contract for service between the company and the independent contractor.

Where the company contracts independent contractors, it is required to withhold tax on gross payments made to them at the rate of 5 percent for residents and citizens of the East Africa Community and 20 percent for other non-residents, unless this rate is varied by a double tax treaty between Kenya and the country in which the contractor is resident.

Kuwait

Employee

Indefinite or fixed-term. Part-time employment is legally possible, but is not common. If both parties continue to perform their duties under a fixed-term contract after the expiry of the fixed term, the contract shall be deemed to have been renewed for a fixed-term of the same length.

Independent contractor

There is no concept of a consultant, unless individuals have established their own professional license and business, due to the requirement for employees to have sponsorship, which is generally obtained by the employer.

Agency worker

There is no general concept of an agency worker or "temp" in Kuwait. Some Kuwaiti-owned employment agencies are licensed to provide manpower on a temporary basis; those workers remain under the agency's sponsorship. These are mainly for low-level jobs, such as cleaning or security services.

Luxembourg

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status.

Independent contractor

Independent contractors can be engaged directly by the employer or via a personal services company. If there is a relationship of subordination between the independent contractor and the company, there is a risk of the relationship being requalified as an employment relationship.

Agency worker

Agency workers are common. Temporary lending of workforce is subject to specific conditions and non-discrimination rules.

Malaysia

Employee

Permanent, fixed-term, full-time or part-time.

Independent contractor

Independent contractors can be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure with financial risk. Work instructions, level of control, exclusivity, access to employee-level benefits and organizational integration, in particular, will jeopardize the independent contractor position. 

Agency worker

Agency workers are common in industries where short-term or project-based engagements are the norm, and there are no restrictions on these arrangements.

Mexico

Employee

Indefinite, fixed-term, training, part-time and seasonal or intermittent. Fixed-term agreements may only be executed under specific circumstances (eg, temporary replacement of an employee on maternity leave).

Independent contractor

Independent contractors may be engaged. Specific rules (ie, judicial criteria) must be followed in order to reduce misclassification exposure.

Agency worker

Agency workers may be hired only for activities different from the core business of the company receiving such services. Otherwise, the company receiving the services could be considered the employer and/or could be subject of monetary sanctions.

Morocco

Employee

Indefinite, fixed-term, full-time or part-time (rarely used).

Independent contractor

Independent contractors may be hired directly by the company. The hiring of an independent contractor may be subject to requalification as an employee. Contract drafting must be accurate. Self-employed independent contractors are paid gross and are responsible for their own taxation.

Agency worker

Engagement of agency workers is strictly regulated. Recourse to agency workers should be exceptional. Recourse to agency workers is permitted:

  • To replace an employee with another in the event of absence or in the event of suspension of the employment contract, provided that such suspension is not caused by a strike
  • In case of a temporary increase in the activity of the company
  • For the performance of seasonal work or
  • For the performance of work for which it is customary not to conclude an indefinite-term employment contract due to the nature of the work.

Agency workers remain employees of the agency.

Mozambique

Employee

Indefinite, fixed-term (certain or uncertain). The fixed term may be for a certain period if it is known in advance when the task will start and end. An uncertain fixed-term is for a fixed-term which cannot be determined at the outset – for example, where an employee is employed to replace another employee who is injured. When the event that justified the signature of the fixed-term contract for the certain period ends, the contract terminates by expiry. Fixed-term employment contracts for a certain period may only be concluded for a maximum period of 2 years and may be renewed twice. Employment contracts that exceed the renewal periods are considered to be concluded as indefinite employment contracts. Foreign employees may only be hired on fixed-term employment contracts, which cannot be converted into permanent contracts.

Independent contractor

An independent contractor may be engaged through a service provision contract with a company or with an individual. Service provision contracts with individuals must contain clauses that clearly distinguish them from employment contracts. An individual foreign contractor needs a work and residence permit to provide services in Mozambique and will become an employee of their client (ie, corporate person) unless they form their own company to apply for their work permit and resident permit.

Agency worker

A specific regime applies to private employment agencies which provide services for the recruitment of employees with the purpose of temporary transfer to a third-party user, locally or abroad, by means of a temporary employment contract or user agreement. These agencies cannot hire foreigners to transfer them to third parties – they may only do so for nationals. They may only hire foreigners to work for them and not their clients.

Myanmar

Employee

The term ''worker'' is the general term used for ''employees'' in Myanmar, although the 2 terms may have slightly different meanings depending on the specific legislation. Employees may be employed on a full-time, part-time or casual basis. Certain laws such as the Workmen Compensation Act 1923 contain specific carve-outs for employees engaged on a ''casual'' basis. While the law does not provide specific differentiations with regard to the rights and obligations associated with full-time, part-time, fixed-term and indefinite forms of employment, entitlements upon termination of various types of contracts do differ.  

Employers must maintain registers and records of employees, ie, the work performed by such employees, the wages paid to them, the deductions made from their wages, the receipts given by them, and any other particulars. Government-appointed inspectors may visit the facilities of the enterprise and audit the status of such registers and records.

Independent contractor

The labor legislation does not specifically regulate independent contractors. Independent contractors can be hired directly by the company via a service agreement or an independent contractor agreement.

Agency worker

These would likely fall into the category of contractors which are permissible but not specifically regulated by Myanmar Law. 

Netherlands

Employee

Indefinite, fixed-term, full-time or part-time, zero-hours, on-call. Fixed-term employees can gain an indefinite employment status after a certain time and cannot be discriminated against due to their status.

Independent contractor

With regards to independent contractors, there are no limitations imposed by law and thus no maximum term for hiring an independent contractor. There is, however, the possibility of exposure of deemed employment. The actual circumstances under which the contract is conducted are decisive in regards to the question of whether the work relationship should be considered to be an employment relation.

Under Dutch law, irrespective of the label given to a contract, an employment agreement will be deemed to exist between two parties if

  • the work has to be performed in person
  • salary is paid and
  • there is a relationship of authority between the individual and the company.

It is important to assess upfront if the contract is in fact an employment contract "in disguise." If based on the facts this appears to be the case, the independent contractor should be regarded as an employee – so all the employee and dismissal protections will apply – and Dutch wage tax and social premiums will be due. To limit the tax and social security risk, parties can use Model Agreements, published on the website of the Dutch tax authorities, or submit the contract to the Dutch tax authorities to get confirmation on the qualification of the contract in a ruling. If the Dutch tax authorities confirm the absence of an employment relationship in a ruling, they can, in principle, not recover wage tax and social premiums from the client with respect to that contract.

Agency worker

Agency workers are common and cannot be discriminated against due to their status.

New Zealand

Employee

Individuals may be recruited on either a full-time, part-time or casual basis (meaning they are employed by the hour or day) or on a fixed-term contract for a limited period.

Independent contractor

Independent contractors may be engaged directly by the company or via a personal services company.

Agency worker

Temporary workers are used by some organizations for short periods. The most common forms of temporary labor in New Zealand include casual employees and fixed-term employees. Agency workers are engaged by the agency, not the employer for which they are placed to work.

Employers may engage casual employees on an as-needed basis. While casual employment relationships are not governed by legislation, employers must be cautious that the employee does not “drift” into permanent employment status.

Nigeria

Employee

Indefinite, fixed-term, full-time, part-time or casual.

Independent contractor

Independent contractors can be engaged directly by the company or through another entity (eg, outsourcing or recruitment agency).

Agency worker

Agency workers are usually recruited by agencies and seconded by agencies/recruitment companies to render services for a fixed period or as may be required. There is no limit prescribed by law. The contract between the Agent and the Company typically provides for the duration of the engagement. The agency workers remain the employees of the recruitment agency, and the companies they are seconded to have no payroll responsibilities/obligations towards them.

Norway

Employee

The main rule is that employees are to be appointed permanently. Temporary employment is permitted in specific circumstances. Part-time employees and temporary employees have the right not to be discriminated against on the basis of such status.

Independent contractor

Independent contractors may be engaged. However, independent contractors have to be sufficiently independent of the company in order not to be regarded as employees. This includes, eg, that the independent contractor bears the risk of the result of the work, is not restricted from also working for others, and invoices all services to the company as a registered independent contractor.

Agency worker

Agency work is permitted to the same extent as temporary employment. Agency workers have the right to equal treatment in relation to pay and other benefits.

Oman

Employee

Unlimited or fixed-term employment contracts. If the parties to a fixed-term contract continue to honor the contractual obligations following its expiry, it is renewed automatically for an unlimited period on the same terms and conditions.

Part-time employment is permitted but is less common and applies only to Omani nationals.

Independent contractor

There is a limited concept of a consultant; individuals may not provide consultancy services unless they have established their own professional license and business due to the requirement that workers are prohibited from carrying out work for a company that is not their sponsor.

Agency worker

There is no general concept of an agency worker or "temp" in Oman. Some Omani-owned employment agencies are licensed to provide manpower on a temporary basis, and these individuals remain under their sponsorship.

Secondee

Workers in Oman are not permitted to carry out work for another company that is not their sponsor. However, companies sometimes enter into an agreement with a local company whereby the local company acts as a third-party host to the individuals. Such an arrangement is not legal, strictly speaking, and is most often seen in circumstances where a company does not have a local entity.

Peru

Employment contracts

Indefinite, fixed-term or part-time.

Independent contractor

Independent contractors may be engaged, subject to potential misclassification exposure.

To mitigate the misclassification risk, the services must be provided independently without direction or control from the hiring company.

The main characteristics of independent contractor relationships in Peru are as follows:

  • Contractors are autonomous and independent in the provision of their services
  • No requirement to comply with working hours
  • Non-exclusive services (ie, contractors usually have several clients)
  • Contractors receive compensation or a fee for their services (rather than a monthly salary, as employees do) and are not entitled to any employment benefits, and
  • The arrangement is subject to the civil law (not employment law).

Staffing and outsourcing services

It is permissible to engage workers through a third-party staffing agency. However, agency workers may be hired only for activities that are different from the company’s core business. Moreover, the staffing agency must comply with certain legal requirements (eg, registration with the Labor Ministry). This arrangement is commonly used for janitorial and security services.

It is also permissible to engage workers through outsourcing arrangements with an outsourcing company. Workers assigned to perform services for a company are employed by third-party companies that provide outsourced business solutions or specialist consulting services on a contract (services) basis. The workers are managed, instructed and controlled solely by the outside third party, and such third party has its own financial, technical, material and human resources. The workers are subject exclusively to the orders and policies of the third-party company.

Both staffing and outsourcing arrangements have joint employer risks.

Philippines

Employee

A regular employee is 1 who has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer, or has rendered at least 1 year of service, whether such service is continuous or interrupted, with respect to the activity in which he or she is employed.

If the employment does not fall within the nature of a regular employment, employment may be project, seasonal, casual or fixed-term.

Independent contractor

An independent contractor is 1 who carries on a distinct and independent business and undertakes to perform the job on his or her own account and under his or her own responsibility, according to his or her own manner and method, and free from the control and direction of the principal in all matters connected with the performance of the work except as to the results thereof. The contractor must likewise have substantial capital or investment in tools, equipment and machineries, work premises and other materials necessary in the conduct of his or her business.

Agency worker

The law prohibits labor-only arrangements, ie, a relationship where the agency refers employees and the principal merely pays the agency/contractor the salaries of the employees. In a labor-only arrangement, the principal will be jointly liable with the agency for any labor claims. An outsourcing arrangement, where the agency directs and controls the employees, is lawful.

Poland

Employee

Employment relationship under an open-ended employment contract, fixed-term employment contract and employment contract for a probationary period; part-time and full-time. It is unlawful to discriminate against employees on the basis of their working part-time or working under a fixed-term contract.

Independent contractor

A person engaged under civil law agreement is not an employee in the meaning of the Polish labor law. Nevertheless, a contractor will be deemed to be an employee (irrespective of the formal name of the contract between parties) if an individual is engaged under the other party's supervision and subject to control of the place, hours of work and the manner of performance.

Agency worker

Temporary work is widely used for short periods of employment, in order to cover the absence of permanent employees or to perform seasonal works. Over a period of 36 successive months, a single user-employer may use the services of an individual provided by a work agency for a total period not exceeding 18 months.

Portugal

Employee

Indefinite-term contract (which is the rule), fixed-term or open-term contract (such as a contract to cover absence; subject to strict limitations), part-time contract, telework contract, intermittent work contract (work during part of the year) and contract under the service commission regime.

Part-time, fixed-term and -term employees should not be discriminated against due to their status.

Independent contractor

Independent contractor relationships are permissible and are not governed by labor law. Engagement may be subject to misclassification exposure with high financial risk. Work instructions and organizational integration, in particular, will jeopardize the independent contractor position.

Agency worker

Agency workers may only be engaged to fulfill a temporary need for work. The agency work contract may be renewed without limitation (though a limit of 6 renewals may be applicable in certain circumstances), provided that the total duration of the engagement shall not exceed the legal maximum (ie, 2 years, but typically 1 year).

Agency workers have the right to equal treatment to employees in relation to pay and other regular benefits.

Qatar

Employee

Unlimited or fixed term. Part-time employment is legally possible but is not common.

Independent contractor

There is no concept of a consultant, unless individuals have established their own professional license and business, due to the requirement for employees to have sponsorship, which is generally obtained by the employer.

Agency worker

There is no general concept of an agency worker or "temp" in Qatar. Some Qatari-owned employment agencies are licensed to provide manpower on a temporary basis (and the individual would remain under the agent's sponsorship) and the executive regulations to the Sponsorship Law do seem to contemplate employees working in Qatar on a temporary basis but such employment arrangements are not clearly detailed in Qatar law.

Romania

Employee

Indefinite − as a rule, fixed-term (only in the cases expressly provided by the law and subject to specific legal conditions), full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against on the basis of such status.

Independent contractor

Engagement of independent contractors may expose the employer to the risk of the arrangement being reclassified as an employment relationship, with the possibility of it being construed that the parties have attempted to circumvent applicable employment law provisions.

Agency worker

Use of temporary employees via a temporary work agency is permitted only for executing a temporary and specific assignment, the maximum duration of which (including all successive renewals) is 36 months. Temporary employees are hired by the temporary work agency under a temporary individual employment agreement.

Employers may also have an individual assigned or seconded to them by another employer, provided that all applicable legal conditions are observed and only for a limited period of time.

Russia

Employee

Indefinite, fixed-term, full-time or part-time. A definite fixed-term employment agreement may be concluded but cannot be for a term longer than 5 years. Additionally, it may only be concluded in the circumstances specifically provided for by Article 59 of the Labor Code.

Independent contractor

Independent contractors may be engaged directly by the company. There are severe penalties if a services agreement is re-qualified as a labor agreement.

Agency worker

The loan of labor (ie, secondments) is generally prohibited. Under the new law secondments are only permitted:

  • By private (accredited) employment agencies or
  • Between related persons, including affiliates or parties to shareholders' agreements.

Saudi Arabia

Employee

Indefinite, fixed-term, full-time or part-time. Incidental work, that is, work that is not considered by its nature to be part of the usual activities of an employer, and whose execution does not require more than 90 days. Seasonal work.

With respect to non-Saudis, all employment contracts are deemed to be for a fixed term. If the employment contract itself does not specify a definite term, the term will be the length of the employee's work visa/working permit. Saudi employees will automatically become engaged on indefinite-term contracts after 3 consecutive renewals of the employment contract, or when the initial and the renewed term of employment reach 4 years. Part-time and fixed-term employees have the right not to be discriminated against due to their status.

Independent contractor

Only Saudi independent contractors can be hired directly by the company or via a personal services company. Engagement may be subject to misclassification exposure.

Agency worker

Subject to following the legal immigration rules for non-Saudis, agency workers are permissible and have the right to equal treatment to employees in relation to pay and other benefits terms.

Singapore

Employee

The EA is the primary statute regulating the relationship of employees and employers in Singapore. Coverage by the EA is dependent on whether the individual in question falls under the definition of "employee" in the EA. The definition covers every employee who is under a contract of service with an employer, with the exception of seafarers, domestic servants and certain government employees (EA Employees). The second category of employees comprises EA Employees earning basic monthly salaries of up to SGD2,600 per month, as well as workmen earning basic monthly salaries of up to SGD4,500 a month, who are granted further benefits under Part IV of the EA, but this does not include any persons who are employed in a managerial or an executive position, regardless of their basic monthly salary (Part IV EA Employees).

Employees can be hired on a full-time, part-time or fixed-term basis.

Independent contractor

Independent contractors may be engaged, but the Singapore Courts and the Ministry of Manpower will look at the substance of the relationship to determine if the individual is, in fact, an employee and merely labeling or classifying an individual as an independent contractor is insufficient.

Agency worker

Agency workers may be engaged if they are Singapore citizens or permanent residents.

Slovak Republic

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status.

Independent contractor

Independent contractors may be engaged by a company. However, the rights and obligations of an independent contractor must be carefully agreed upon, as the respective labor authorities might re-classify such a relationship as an employment relationship, which cannot be carried out under a commercial contract. This exposes a company to a high risk of being imposed with a fine in the case of such re-classification.

Agency worker

The temporary secondment of agency workers may be agreed for no more than 24 months. The working conditions, including wages and employment terms, of agency workers must be equivalent to those of the user employer's comparable employees.

The agency is required to hold a special permit granted by the Central Office of Labor, Social Affairs and Family.

South Africa

Employee

Full-time permanent employment, fixed-term, part-time and employment below the minimum hours per month, which may result in exclusion from minimum benefits. When engaging employees on fixed-term employment contracts, there may be a risk of a reasonable expectation of renewal or continued employment if the fixed-term employment contract is repeatedly renewed. In addition, where an employee is engaged on a fixed-term employment contract for longer than 3 months and the employee earns below a threshold amount determined by the Minister of Labour from time to time (ie, the BCEA threshold), which is set at ZAR211,596.30 per annum with effect from March 1, 2021, the employee is deemed to be employed on a permanent basis, unless one of a limited number of exceptions and/or reasons for using longer fixed-term employment exists. Furthermore, the employee must not be treated less favorably than a comparable employee performing the same or similar work unless there is a justifiable reason for different treatment.

Certain obligations arise for employers who employ part-time employees earning below the BCEA threshold. After an initial period of 3 months from commencement of such part-time employment, part-time employees earning below the BCEA threshold must be treated, on the whole, not less favorably than a comparable full-time employee doing the same or similar work, unless a justifiable reason for different treatment exists. After 3 months, employers are also required to provide part-time employees (earning below the threshold) with access to training and skills development, on the whole, not less favorable than the access applicable to comparable full-time employees.

A number of rights in the Basic Conditions of Employment Act 75 of 1997 (BCEA), including those relating to regulation of working time and leave, do not apply to employees who work fewer than 24 hours a month.

Independent contractor

Independent contractors are excluded from the employment protections afforded to employees, but legislation imposes a presumption of employment if certain elements exist in the working relationship, such as the right of supervision on the part of the employer. The presumption applies only to persons earning below the BCEA threshold. For other workers, the common law dominant impression test applies. There is no single indicator of an employment relationship. Instead, the court will look at the relationship as a whole to determine whether the relationship is one of employment or independent contracting. The level of control exercised by the employer over the "employee" is an important aspect to be considered.

Agency worker

Employees earning below the BCEA threshold enjoy additional protection if placed at a client through an agency (ie, temporary employment service). Except in limited circumstances, if the agency worker is placed at the client for longer than 3 months, the agency worker is deemed employed by the client for the purposes of the Labour Relations Act, 1995 but will remain employed by the agency or temporary employment service for the purposes of all other legislation. The agency worker also becomes entitled to be treated, on the whole, not less favorably than comparable permanent employees of the client unless there is a justifiable reason for different treatment. No deemed employment applies to agency workers earning in excess of the BCEA threshold.

South Korea

Employee

Employees may be employed on either an indefinite basis (referred to as "regular" workers) or a definite/fixed-term basis for a maximum term of 2 years ("non-regular" workers). Fixed-term employees may be deemed to be employed on an indefinite basis if employed for a period of greater than 2 years, in principle.

Employees can be engaged on a full-time or part-time basis.

Independent contractor

Independent contractors may be engaged, and companies should be careful to avoid establishing 'employee' status whereby the individual is entitled to all of the benefits of an employee, including severance and employment security, thus, increasing the compliance, tax, payroll and other risks to the company. The primary factor distinguishing employees from contractors will be the degree of supervision and control by the company over the individual.

Agency worker

Engagement governed by the Act on the Protection of Temporary Agency Workers. These are "dispatched workers" employed by a temporary work agency, who provide services for a user company (under their direction and instruction) in accordance with the terms and conditions of a contract on temporary placement of workers, executed between the temporary work agency and the user company. The employment relationship is with the temporary work agency.

Spain

Employee

Indefinite or fixed-term (subject to strict limitations) and full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against due to their status.

Independent contractor

Independent contractors may be engaged directly by the company. It is important to check that they are not misclassified, as this may create liability.

Agency worker

Agency workers may only be engaged for a fixed-term or a training situation. Agency workers have the right to equal treatment as compared to employees, in relation to their essential labor conditions, through the entire length of the relationship.

Sweden

Employee

Indefinite, fixed-term, full-time or part-time. An employer may not put a part-time or fixed-term employee at a disadvantage by providing a less favorable salary or other employment terms, compared to employees in a similar situation working full-time or those in permanent employment.

Independent contractor

Independent contractors can be engaged directly by the company. However, engagement may be subject to misclassification exposure. Also, hiring of independent contractors may be subject to consultation requirements if the employer is bound by a collective bargaining agreement.

Agency worker

Agency workers can be hired and assigned to perform work under a user undertaking's supervision and direction. The equal treatment principle under the Swedish Act on Agency Work requires that the employer (ie, the temporary work agency) ensure that the basic working and employment conditions for the employee who has been assigned to a user undertaking shall be at least those that would have applied if the employee had been employed directly by the user undertaking to perform the same work.

Switzerland

Employee

Indefinite, fixed-term, with maximum duration, full-time or part-time.

Independent contractor

Independent contractors may be engaged with such status only if they can organize their time and duties themselves and effectively bear the economic risk related to their activity. Engagement may be subject to misclassification exposure.

Agency worker

Generally, agency workers must be formally employed by specifically authorized companies. If an extended collective employment agreement applies to the receiving company's employees, agency workers will also benefit from its provisions regarding salary and work duration.

Taiwan, Republic of China

Employee

Fixed-term and non-fixed contracts. Full-time or part-time. Some foreign employees may be subject to restrictions regarding part-time employment.

Independent contractor

Independent contractors fall outside the scope of the Labor Standards Act (LSA). Courts will review the degree of control over a worker in deciding whether they are subject to the LSA, and are, in fact, an employee.

Agency worker

An agency worker is called a "dispatch worker" in Taiwan and is subject to government restrictions.

Thailand

Employee

A "hire of services" is a contract whereby a person, called the employee, agrees to render services to another person, the employer, who agrees to pay remuneration for the duration of services. Employment can be full-time, part-time, definite or indefinite.

Independent contractor

A "hire of work" is a contract whereby a person, called the contractor, agrees to complete work for the service recipient, who agrees to pay remuneration upon completion of the work. In general, the service recipient will not have the power to control the contractor. Unlike an employee, an independent contractor under a "hire of work" contract will neither be protected nor entitled to employment rights under the Labor Protection Act B.E. 2541 (1998) (LPA) nor the Labor Relations Act B.E. 2518 (1975) (LRA).

Agency worker

According to the LPA, where an employer assigns another person to recruit a worker and it is not a job procurement business operation and such work is part of the manufacturing process or the work is for part of a business for which the employer is responsible, the employer shall be deemed to be the joint employer of the worker as if he/she were contracted under a hire of services contract by the employer (whether or not the employer supervises the work or is responsible for the payment of wages to the worker). The worker is entitled to claim for any benefit against the employer or such other person and the employer will be deemed to be the employer of the worker as if the employee were engaged by it directly. However, the employer may recover any payment made to the worker from such other person if there is an agreement providing for such reimbursement. On the contrary, a worker with an agency, (ie, a company operating a job procurement business) shall be deemed the employee of the agency, and not of the agency's customer.

Tunisia

Employee

An employee is an individual who provides another person with personal services under the direction and control of that person. The Labor Code covers both permanent and seasonal/occasional work and both fixed and indefinite term contracts, as well as apprenticeship contracts. Both fixed-term and indefinite term contracts can be concluded for either full-time or part-time work. An apprenticeship contract is a contract for youths under the age of 20 to learn a trade from a master for a fixed duration.

Independent contractor

Self-employed persons are individuals who lack an employment contract, including agricultural workers, farmers, tenant farmers, independent fishers, artisans with a professional certification and drivers. Self-employed persons are subject to Tunisia’s social security regime and are responsible for paying the relevant social charges themselves.

Agency worker

The Tunisian Labor Code does not cover the concept of agency work but it does refer to sub-contracts which are defined as cases where a head of an industrial or commercial company enters into a contract for certain work or services with an entrepreneur who, in turn, recruits the labor necessary to perform the work.

Turkey

Employee

Definite period, indefinite period, full-time, part-time, for a maximum or minimum term, seasonal, temporarily, on call. All employees have the right not to be discriminated due to their status.

Independent contractor

Independent contractors can be engaged directly by the company.

Agency worker

Companies may outsource agency workers for certain positions stipulated under Turkish legislation. Establishment of a subcontractor relationship for: (i) auxiliary works for production of goods and services; or (ii) dividable parts of main work which require expertise due to technological reasons or features of the workplace and business, is permissible under Turkish law. If the conditions for establishment of a subcontractor relationship are not met, the relationship is likely to be deemed "collusive payroll subcontracting," which while sometimes used in practice, is not permissible, and is subject to an administrative fine. Also, the employees lent from the agency would be regarded as employees of the hiring company.

Uganda

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against on the basis of their employment status. Substantial level of control over the individual, provision of tools of trade and training and an individual's work being an integral part of the business would indicate that an individual is an employee. Casual employees can only be engaged for up to 4 months.

Independent contractor

Independent contractors can be engaged directly by the company or via a personnel services company. Engagement may be subject to misclassification exposure. Payments for independent contractors are subject to a 6 percent withholding tax. However, a foreign company engaging an independent contractor has no obligation to withhold tax. The independent contractor would, however, be required to pay the tax.

Agency worker

Agency workers are common. The agency will be required to have a valid recruitment permit.

Ukraine

Employee

Employment can be for part-time or full-time employment and for different durations:

  • indefinite (most commonly used)
  • fixed-term (restricted to specific cases, eg, when an employee is hired to perform the duties of a temporarily absent employee, is hired to a specific position (some state officials, judges, etc.), or when an employee insists on the fixed-term employment agreement due to personal reasons)
  • until completion of an agreed-upon project, when it is impossible to determine the project's duration

Independent contractor

The use of independent contractors is permitted, but contractors can be reclassified as employees by the relevant authorities if misclassified. Penalties may be imposed in case of reclassification.

Agency worker

Engaging agency workers is common for employers that need temporary employees from time to time or that cannot hire the employees directly due to global headcount reasons. A Ukrainian employer can engage agency workers only if:

  • such engagement is directly allowed by a collective agreement and based on the consent of the relevant trade union
  • the employer has not had a staff reduction within the year prior to commencement of such engagement
  • the employer complies with the statutory ratio of employees of the main professions, who are engaged in the technological processes of the main production
  • the engaged agency workers will not perform the work of employees of the main professions of the technological process of the main production
  • the agency workers will not work in a hazardous, physically demanding or dangerous work environment

Due to legal uncertainty in the regulation of agency workers, agency workers are often engaged under general services agreements.

United Arab Emirates

Employee

Unlimited or fixed term. Part-time employment is legally possible, but is not common.

Independent contractor

There is a limited concept of a consultant, unless individuals have established their own professional license and business. This is due to the requirement for employees to have sponsorship, which is generally obtained by the employer.

Agency worker

There is no general concept of an agency worker or "temp" in the UAE. Some Emirati-owned employment agencies are licensed to provide manpower on a temporary basis; those workers would remain under the relevant agency's sponsorship.

United Kingdom

Employee

Indefinite, fixed-term, full-time or part-time. Part-time and fixed-term employees have the right not to be discriminated against on the basis of their employment status.

Independent contractor

Independent contractors may be engaged directly by the company or via a personal services company. Engagement may be subject to misclassification exposure, whether as an employee or worker.

Workers

A "worker" has fewer rights than an employee but more than an independent contractor. A worker works under a contract for personal service (ie, they cannot send a substitute) with another party whose status is not one of customer or client to the individual.

Agency worker

Agency workers are common and are typically either employees or workers. Agency workers have the right to equal treatment to employees in relation to pay and other benefits terms after a 12-week qualifying period.

United States

Employee

At-will, fixed-term, full-time or part-time, temporary or seasonal. Generally, the nature of the employment relationship is at-will, meaning either the employer or the employee may terminate the relationship at any time, with or without notice and with or without cause, as long as the reason for termination is not discriminatory/retaliatory and does not otherwise violate the law. Certain jurisdictions have either superseded the general rule of at-will employment by statute (eg, Montana) or have adopted a statutory severance scheme for terminations without cause (eg, Puerto Rico).

Independent contractor

Independent contractors can be engaged directly as individuals, or through an entity (eg, LLC, LP). Contractors must be truly independent and not be closely directed by the principal. There are multiple tests utilized that consider various factors (on both the federal and state level) to determine whether an individual is properly classified as an independent contractor. By way of example, if an individual is engaged through a separate business entity, is not performing work that is a part of the company's core business, performs the same or similar services for other entities, and is engaged for a short-term assignment or project, the individual will likely be deemed properly classified and engaged as an independent contractor. Employers should utilize agreements with independent contractors to document the relationship.

Evolving agency decisions and views – namely from the Department of Labor (DOL) and NLRB (National Labor Relations Board) – have provided more employer-friendly guidance on independent contractor classifications, while certain states' legislation and case law are becoming more employee and contractor friendly (eg, California).

Agency worker

Employees may provide services through an employment agency or professional employer organization (PEO). The company and the agency may be deemed "joint employers" and be held jointly liable under various employment laws. Which entity is financially responsible for any such liabilities may depend on the terms of the agreement with the employment agency or PEO.

Venezuela

Employee

Employees may be hired under indefinite or fixed-term contracts and on a part-time or shift worker basis.

Fixed-term employment contracts are restricted and may only be entered into when (a) the nature of the services requires, (b) an employee is provisionally replaced by another employee, (c) a Venezuelan employee is temporarily sent abroad to perform services and needs to be replaced, and (d) when an employee is required to complete a specific work or project. Fixed-term employment contracts may only be renewed once. If the employee continues to work after the expiration date or if it is renewed for a second time, then the employment contract becomes indefinite. However, fixed-term employment contracts used in the construction sector may be renewed without limit.

Independent contractor

Independent contractors perform services under a civil or commercial relationship, characterized by non-exclusiveness of services, absence of employer control, direction and supervising powers, and use of its own resources and personnel to provide services, among others. Independent contractor agreements are not covered by the statutory protections afforded in the Venezuelan labor law.

The Venezuelan labor law presumes an employment relationship where an individual personally provides services and receives remuneration for such services and the company receiving the services has control and direction over the way the services are executed.

Agency worker

Hiring workers through intermediaries such as temporary work agencies is restricted. Agency workers are entitled to receive the same pay and must be granted equal working conditions as those of the company where they are assigned. In these types of arrangements, the contracting company may be held vicariously liable for any labor obligations towards the temporary agency worker. Such arrangements may not be used to evade or circumvent labor obligations.

Vietnam

Employee

Individuals can be employed on an indefinite-term contract, a definite-term contract, a seasonal contract or a contract for a specific job (which is for less than 12 months).

Under a definite-term contract, the parties agree to the term and the time of termination of the contract for a period between 12 and 36 months.

Seasonal labor contracts and specific job contracts are used for work that is irregular and where the duration of the job is less than 12 months. It is prohibited for such a contract to be used for work which is regular and has a duration of 12 months or more, except to temporarily replace an employee who is absent for military service, is on maternity leave or sick leave, is on leave as the result of a work-related accident, or is on leave for another temporary reason (Article 22 of Labor Code 2012).

Independent contractor

A Vietnamese individual can provide services to an enterprise or organization in Vietnam as an independent contractor (although generally they should have a household business registration to do so). The provision of services as an independent contractor falls under the jurisdiction of the 2015 Civil Code, the 2014 Law on Enterprises and the 2005 Commercial Law, and is generally not considered an employment relationship to which the labor laws apply. Consequently, an independent contractor is not entitled to any statutory employment rights under Vietnam law.

There is no legal provision regulating when an employer can or cannot use a labor contract or a service contract. However, if a contract contains the features more customarily found in an employment relationship (for example, where the contractor is subject to the employer's working hours, or to disciplinary actions for a breach of the work rules), the contract may be treated by the authorities as a misclassified labor contract, even if it is referred to as a service contract. As a general rule, the use of a service contract for permanent and long-term work is not encouraged, and can be viewed by the labor authorities as a circumvention of employment-related requirements, such as contributions to statutorily required insurance for employees. This risk may be increased if the individual does not have registered household business registration.

Foreign nationals cannot provide services as an independent contractor.

Agency worker

An agency worker is an employee recruited by an enterprise licensed to conduct employment outsourcing who thereafter works for another employer (sub-leasing employer). Such employee is subject to management by the direct employer, but maintains an employment relationship with the employment outsourcing enterprise. The period of any employment outsourcing must not exceed 12 months. Agency workers have the right to receive pay and benefits equivalent to those specified in the employment contract signed between the employer and the employment outsourcing enterprise. There is no requirement for an agency worker to be given employment terms equivalent to those of regular employees of the sub-leasing employer.