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  • Legal system, currency, language

    Constitutional and civil law with certain application of case law. Pesos (ARS). Spanish.

     

  • Corporate presence requirements & payroll set-up

    A foreign entity cannot hire employees in Argentina without a local corporate presence.

    Employers must pay social security contributions (23% or 27% on top of salaries, depending on the company's activity and revenues). Employees must contribute 17% of their salaries to the social security system (to be withheld by the employer and subject to certain taxable limits). Income tax is also withheld by the employer when paying employees' salaries (maximum rate 35%, subject to a progressive scale).

    Collective bargaining agreements for certain activities provide payments to be made by the employer and/or the unionized employees to the relevant unions.

  • Pre-hire checks

    Required

    • Pre-hire medical checks are required pursuant to resolutions issued by the Occupational Hazard Superintendence. If an employee does not complete a pre-hire medical check, the employee will be deemed to have begun work in optimal health; therefore, any injuries or diseases which subsequently arise will be deemed to have happened during the employment relationship.
    • Criminal record checks are required for foreign employees to obtain a work visa.

    Permissible

    Where criminal checks are not required for work visa purposes, they are only permissible (and often done in practice) for specific roles (eg, high-level managerial positions). Reference and educational checks are common and permissible, provided applicant consent is previously obtained.

  • Immigration

    Foreigners from non-Mercosur countries must obtain a temporary residence permit that permits them to enter and work in Argentina. Temporary residency is granted for a maximum period of up to 1 year, extendable for periods of equal or shorter terms. After 3 consecutive years as a temporary resident, foreign employees are entitled to apply for permanent residence.

    Citizens of Mercosur countries can apply for temporary Mercosur residence in Argentina without the need to present a work contract to the authorities. Temporary Mercosur residence is granted for 2 years and enables the individual to work and to apply for permanent residence on expiry of the temporary residence.

  • Hiring options

    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 his/her employer; an employer who directs and subordinates the individual; 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 can engage workers through agencies. Agencies must be authorized by the authorities to function as an agency.

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

  • Employment contracts & policies

    Employment contracts

    There is no general, legal requirement to execute employment contracts in a specific form – meaning that they can be in writing, made orally, etc. unless a specific law or collective convention applies and indicates otherwise. Notwithstanding, employers are advised to enter into a written employment contract.

    Probationary periods

    The maximum permitted duration of a probationary period is 3 months. After the end of the 3 month period, the employee will turn into an indefinite term employee.

    Policies

    The law does not require employers to have specific policies in place. Notwithstanding, there are some policies that are strongly recommended to prevent potential conflict, such as bonus policies.

    Third-party approval

    Third-party approval is not required for employment contracts or any policies.

  • Language requirements

    No statutory language requirements; however, in practice, employment contracts are drafted in Spanish.

  • Minimum employment rights

    Employees entitled to minimum employment rights

    The Employment Contract Law No. 20,744 (LCL) governs the minimum employment rights in Argentina.

    Pursuant to Article 3º of the LCL, the law governs everything related to the validity, rights and obligations of the parties, provided the employment contract is performed in Argentina, even if the contract was entered into abroad.

    The LCL applies to "workers" which covers not only employees working under an employment contract, but also other individuals who personally perform "work" or provide services for the employer.

    For this purpose, "work" should be understood as any legitimate activity that is provided in favor of someone who has the power to direct that work, through the payment of remuneration for those activities and/or services rendered.

    The main factors that will tend to indicate that an individual is an employee rather than a worker or self-employed worker, are:

    • The employee must be available to work for his/her employer
    • The employer will direct and subordinate the employee, appoint the services and duties required and order the employee to comply with a schedule

    Courts will also weigh the extent to which the worker depends economically on the income obtained from the alleged employer.

    Working hours

    The general maximum number of hours is 8 hours per day or 48 hours per week for all employed workers in public or private enterprises. Each extra hour worked above these limits is deemed to be overtime.

    Notwithstanding the foregoing, Article No. 3 of Law No. 11,544, in its subsections a), b) and c) regulates exceptions to the abovementioned maximum limitation on working hours. The limitations do not apply to employees performing duties under the form of a "job team," that is, working in a special coordinating rotation system, nor to employees performing duties in high-level positions (main managers, directors etc.).

    Overtime

    Employees in Argentina are allowed to perform overtime. Overtime will be only compulsory in cases of danger or accidents or imminent force majeure, or by exceptional demands of the national economy or the company (Article No. 203 of the LCL).

    Overtime must be paid with a surcharge of 50%, calculated using the employee's usual salary if the overtime hours were worked during business days, and 100% on Saturday after 1pm, Sunday or holidays. In no event may employees work overtime of more than, 3 hours per day, 30 hours per month or 200 hours per calendar year.

    Wages

    The national minimum wage (NMW) is updated regularly by the National Council of Employment dependent of the Ministry of Production and Labor. The NMW rate as of December 2018 is AR$11,300.

    Most CBAs also provide for a specific minimum wage applicable to employees subject to the CBA.

    Vacation

    Employees with less than 5 years seniority are entitled to 14 calendar days after 6 months of work. This increases to 21 calendar days for employees with between 5 to 10 years of seniority; 28 days for employees with between 10 to 20 years of seniority, and 35 days for employees with more than 20 years of seniority. For employees with less than 6 months of service, employers must grant 1 day of vacation per worked month. Companies should grant vacation to their employees between October 1 to April 30 of the following year.

    Sick leave & pay

    Sick/accident leave of up to 3 months per year must be provided to employees with less than 5 years of seniority, while 6 months must be granted to employees with seniority of 5 years or longer. For employees with "family dependents" (generally understood to be the immediate family that economically depends on the employee’s wage and labor benefits), these periods are doubled, to 6 and 12 months, respectively.

    Maternity/parental leave & pay

    Pregnant employees may take leave of 45 days prior to giving birth and up to 45 days after giving birth. However, the employee may choose to reduce the leave prior to giving birth, but it may not be less than 30 days, and add those days to the maternity leave period after the birth of the child. In the event of premature birth, the period of the leave that has not been enjoyed before the birth will be added to the leave period after the childbirth. Further, the employee is entitled to earn her gross remuneration (without any withholding contributions made to the social security system), during maternity leave. The ANSES (as defined below) pays the remuneration of employees during maternity leave.

    Fathers are entitled to paid leave of 2 consecutive days for the birth of his child. There is no general regulation providing other parental leave after the birth of a child. 

  • Discrimination

    The law prohibits discriminatory acts or omissions based on race, religion, nationality, ideology, political or trade union opinion, sex, economic position, social condition or physical characteristics.

    In addition, Argentina has ratified international antidiscrimination conventions, such as the Convention of Belem do Pará and the Convention on the Elimination of All Forms of Discrimination against Women.

  • Benefits & pensions

    The Social Security National Administration (Administración Nacional de la Seguridad Social, hereinafter ANSES) is the authority in charge of the administration of the social security system in Argentina, called Sistema Integrado de Jubilaciones y Pensiones (SIJP). Employers and employees are required to make contributions to the SIJP which provides for old age pension and disability benefits.

    To qualify for a statefunded pension distribution, male employees must be 65 years old, while female employees must be 60 years old. In both cases, in order to qualify for pension the employee must have contributed to the SIJP for a minimum of 30 years.

    Employers do not have a legal obligation to provide a private pension scheme for employees, as the employees are entitled to state pensions.

  • Data privacy

    The Data Privacy Law No. 24,766 sets limits to the type of personal data that may be collected by prohibiting the collection of sensitive personal data, such as data that is related to political or religious opinions, and regulates the collection, use, processing and transfer of personal data.

    Employers are allowed to monitor employee's work devices, provided the employee is duly notified in advance, and personal information is safeguarded and not disclosed.

  • Rules in transactions/business transfers

    Where there is an asset transfer that qualifies as a business transfer, all obligations arising from the employment contracts that the transferor has executed with its employees will be taken on by the transferee after the transfer. Employment contracts will continue with the transferee and the employees will retain their seniority with the transferor and the rights arising from it. Therefore, on the execution of the transfer, all employees are automatically transferred to the transferee, after their written consent has been obtained.

    Although in practice both internal consultations and collective consultation with trade unions are held before a business transfer takes place, the transferor and the transferee are not required by law to inform or consult employees on a business transfer. However, in order to perform the transfer of staff, the employee’s written consent must be given prior to the transfer. In the absence of this consent, the employee may terminate the employment, with the right to compensation.

    The transferor and the transferee will be jointly and severally liable for any dismissals that arise due to the transfer.

  • Employee representation

    Argentina is a highly unionized country with approximately 3,100 active trade unions with considerable political power. There are unions in nearly all sectors or industries.

    A trade union must be recognized by the Ministry of Production and Labor. Only recognized and authorized unions can enter into a CBA. Employers cannot recognize an unauthorized union voluntarily, not even for collective bargaining purposes.

    The National Constitution sets out collective labor rights in its Article No. 14 (bis), guaranteeing unions the right to collectively bargain and the right to strike.

    CBAs are very common in Argentina. There are different types of CBAs depending on the territory in which they are going to be enforceable. Some CBAs only govern employees within one specific company, whereas other CBAs govern employees performing certain activities in a geographical region or industry.

  • Termination

    Grounds

    Cause is not required for termination of employment; however, it is required to avoid payment of statutory severance. There is no exhaustive and/or exemplary list of behaviors that constitute cause for dismissal; therefore, whether a dismissal is with or without cause will depend on judicial judgment on a case by case basis. 

    Who is subject to termination laws?

    All employees.

    Prohibited or restricted terminations

    Public employees and union delegates cannot be dismissed without cause and without complying with the statutory procedure for these terminations. All other employees can be dismissed with payment of statutory severance, which will differ based on the case (maternity, illness, etc.)

    Pregnant employees are protected from dismissal. If a pregnant employee is dismissed within the period of 7-1/2 months before or after the date of childbirth, the pregnancy will be considered to be the cause of the dismissal, entitling the employee compensation for the discrimination equivalent to their annual salary, in addition to the applicable severance payment.

    Further, if a dismissal occurs 3 months before the marriage of an employee, or 6 months after it, the dismissed employee will be entitled to a special compensation.

    In order to dismiss employees on sick leave, employers must pay a special severance (full severance payment applicable for dismissal without cause, plus the salary which would be payable for the entire period the illness would be expected to last, according to medical opinion).

    Third-party approval for termination/termination documents

    Under Decree No. 1043/18 (effective as of November 14, 2018), employers wishing to dismiss indefinite term employees without cause must notify the Ministry of Production and Labor at least 10 business days before the decision goes into effect. This Decree is effective through March 31, 2019.

    As this decree was issued recently, there is no administrative or judicial case law interpreting the Decree.

    Mass layoff rules

    Prior to a mass dismissal, an employer must provide notice to the respective trade union that regulates the employer's industry. Collective consultation may be required depending on employee headcount.

    Prior to executing or communicating dismissals or suspensions due to force majeure, economic or technological causes that affects more than:

    • 15% of the employees where total headcount is less than 400
    • 10% of the employees where total headcount is between 400 and 1,000 and
    • 5% of the employees where total headcount is greater than 1,000

    Employers must comply with the Preventive Procedure of Companies Crisis (PPC) before the Ministry of Production and Labor. During this procedure, the company will engage in negotiation with the respective union acting on behalf of their members. The aim of this procedure is to avoid business shutdowns or bankruptcy. After the company files the request at the Ministry of Production and Labor, the Ministry will forward the claim within 2 business days of the filing to the other party for its response. After a response is made, a settlement hearing will be scheduled within the next 5 business days. If a settlement is not reached, the Ministry will open a "negotiating period" that must not extend beyond 10 business days. If the parties still do not reach to an agreement within that period, the PPC process will conclude. Notwithstanding this, in practice, this procedure normally takes longer than the law sets out.

    Notice

    In order to proceed with termination, employers must give notice to employees before the dismissal. 

    The term of this notice will depend on the seniority of employees:

    • During their probationary period, notice must be given to employees 15 days before termination
    • In order to dismiss employees who have completed the probationary period but who have less than 5 years of seniority, notice must be given 1 month prior to the dismissal and
    • Employees with more than 5 years' seniority must receive 2 months' notice before their dismissal

    Statutory right to pay in lieu of notice or garden leave

    Employers are permitted to pay in lieu of notice. Current legislation does not regulate nor prohibit garden leave.

    Severance

    An employee who is dismissed without reasonable cause is entitled to statutory severance of 1 month's salary for each year of service, or period longer than 3 months. This amount is calculated using the employee's highest monthly, regular compensation received in the last 12 months of work. This baseline cannot be more than 3 times the "monthly payment," which is the average of all compensation set out in the applicable CBA at the time of the dismissal (this average is periodically published). The Ministry of Production and Labor governs the updating of this average for every authorized trade union.  

    If the employee is not subject to a CBA (typically, senior employees), the limits applicable to the activity in which he/she performs duties will apply. In no case will the amount of the compensation payable be less than 1 month of real salary.

    Currently, in the Vizotti case, the Supreme Court of Justice has raised the basis for calculating compensation subject to a limit, establishing that it will be 67% of the employee's monthly and usual compensation, the amount to be multiplied by the years of service of the employee, based on constitutional reasons and in cases where the application of the legal limit imposes a reduction to the severance payment of more than 33%.

    This severance payment may be reduced or increased in other types of termination (eg, force majeure and lack or reduction of work; death of the employee; employer's bankruptcy; employee's retirement; employee's illness; employee's pregnancy; etc.)

  • Post-termination restraints

    Non-compete, customer non-solicitation and employee non-solicitation clauses are often used, especially when the employer and employee negotiate the terms and conditions of the termination of the employment.

    Restrictive covenants are capable of being enforced post-employment, provided the employee receives compensation for the restrictions. Therefore, consideration is required for valid restrictive covenants. The amount must be fair and in accordance with the salary of the employee, his/her position in the company, the agreements that the company intends to impose and the extent (period and territory) of the restrictive covenant.

    The law does not specifically regulate restrictive covenants. However, most restrictive periods range between 2 years to 5 years. However, under certain circumstances the court has enforced a 10 year post-termination restraint period, based on the business and the amount of consideration paid to the employee.

    Where an employee is in breach of an agreement, the employer can file a claim against the employee in court requesting compensation for damages. The complaint may include injunctive relief to stop the violation immediately. Alternatively, courts may declare the covenant null and void if it has been drafted too widely.

  • Waivers

    Pursuant to the LCL, any executed agreement that suppresses or reduces rights granted by the LCL, labor laws related to specific industries, collective agreements or individual employment contracts, either at the time of their agreement or execution, or the exercise of the rights arising from its termination, shall be null and void.

  • Remedies

    Discrimination

    Compensation is available as a remedy for discrimination or harassment. In case the event of a complaint based on harassment, the employee can file a claim requesting the payment of the statutory severance payment applicable to dismissals without cause and an additional amount for the pain and/or emotional distress caused by the harassment.

    Employers are liable for the acts of their employees. Therefore, the employer and the harasser will be declared jointly and severally liable for the payment of any compensation granted to the victim.

    Unfair dismissal

    Employees may challenge a dismissal without cause within 2 years of the dismissal and seek payment of statutory severance, plus interest and court fees. The complaint must be filed before the labor courts.

    Failure to inform & consult

    Not applicable for terminations as there are no consultation obligations.

  • Criminal sanctions

    Breaches of labor law do not entail a criminal breach or sanction unless such a breach or offense is specifically regulated by the National Criminal Code as a crime. In that case, criminal sanctions will be applied for the breach of criminal law and not for the breach of labor law.

  • Key contacts
    Osvaldo Jofre
    Osvaldo Jofre
    Cordova Francos [email protected]

Hiring options

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 his/her employer; an employer who directs and subordinates the individual; 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 can engage workers through agencies. Agencies must be authorized by the authorities to function as an agency.

The employer will be 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 can 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 typically will be either employees or workers. Agency workers have the right to equal treatment to employees in relation to pay and other benefits 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, 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 Bahrain. Some Bahraini-owned employment agencies are licensed to provide manpower on a temporary basis - such employees would 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. (Also sales representatives, home and teleworkers, students, etc.)

Independent contractor

Independent contractors can 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 can 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 can 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 one 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 one 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 very 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 any one workplace) so this is becoming a less attractive hiring option. The rules are more relaxed for representative offices as they cannot hire local staff directly so must rely on agencies.

Colombia

Employee

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

Fixed-term agreements cannot exceed 3 years but can 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 can 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. As from June 2019, the contracting company will be obliged to withhold the social security contributions from the contractor's fees and make the relevant payment to the social security entities. 

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 can only be hired in 3 cases:

  • For occasional or sporadic activities
  • For replacement of employees on vacation, maternity or sick leave
  • 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 applies, the company receiving services from the agency could be considered the employer of the agency workers and/or could be subject to monetary sanctions including a fine of up to 5,000 times the minimum monthly wage which can be imposed by the Ministry of Labor.

Czech Republic

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 such status.

Independent contractor

Independent contractors can be engaged. Such an engagement may be subject to the risk of exposure for misclassification (so-called "illegal work").

Agency worker

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

Other options

Under Czech law, there are two other employment options based on either an "agreement on work performance" or an "agreement on work activity." Agreement on work performance – max. 300 hours per calendar year; less administratively burdensome; social and health insurance contributions payable only from certain remuneration thresholds.

Agreement on work activity - the hours worked must not exceed on average one half of regular working hours (approximately 20 hours/week); 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 can either be full-time or part-time. If justified reasons exist, an employment agreement could 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 a 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. 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

Employee

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

Independent contractor

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

Agency worker

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

Hungary

Employee

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

Independent contractor

Independent contractors can 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 can 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 have to 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.

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 will have 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 his/her employment are primarily governed by his/her 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 can be indefinite, for a temporary term, full-time or part-time.

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.

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

Independent contractor

Independent contractors can 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 he/she deems fit, as long as the timelines and the quality of deliverables are met.

Establishments tend to engage independent contractors/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'' will be entitled to the same employment benefits as the regular workforce.

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 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 can recover its costs from the intermediary agency.

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 can 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 one 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

Can be engaged for an 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 can 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 will be required to withhold tax on gross payments made to them at the rate of 5% for residents and citizens of the East Africa Community and 20% 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 would remain under the agency's sponsorship. These are mainly for low-level jobs such as cleaning or security services, etc.

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 can only be executed under very specific circumstances (eg, temporary replacement of an employee on maternity leave).

Independent contractor

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

Agency worker

Agency workers can 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 can be hired directly by the company. The hiring of an independent contractor may be subject to requalification as an employee. Contract drafting needs to 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
  • 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 will be 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 will need a work and residence permit to provide services in Mozambique and will become an employee of his or her client (corporate person) unless he or she forms his or her own company to apply for his or her 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 can only do that for nationals. They can 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 two 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 can 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 can 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 can engage casual employees on an 'as-needed' basis.

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 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 would 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.

 

Philippines

Employee

A regular employee is one 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 one 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 one 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 (such as a contract to cover absence) contract (subject to strict limitations), part-time contract, telework contract, intermittent work contract (work during a part of the year) and contract under service commission regime.

Part-time, fixed-term and open-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 can only be engaged to fulfill a temporary need for work. The agency work contract can be renewed without limitation, provided that the total duration of the engagement shall not exceed the legal maximum (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, but the individual would remain under agency sponsorship.

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 and it may only be concluded in the circumstances specifically provided for by Article 59 of the Labor Code.

Independent contractor

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

Agency worker

No statutory grounds, but generally permissible in practice. A bill to ban the loan of labor (secondments) in certain circumstances became effective on January 1, 2016. Under the new law secondments are only permitted:

  • By private (accredited) employment agencies
  • 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 (EA Employees), with the exception of seafarers, domestic servants and certain government employees. The definition through March 31, 2019 excluded persons employed in a professional, managerial or executive position earning basic monthly salaries of more than SGD 4,500 per month (Non-EA Employees). However, since April 1, 2019 these individuals are covered due to the reforms to the EA. A third category of employees comprises EA employees earning basic monthly salaries of up to SGD 2,500 (SGD 2,600 from April 1, 2019) per month, as well as workmen earning basic monthly salaries of up to SGD 4,500 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, fixed-term or at will basis.

Independent contractor

Independent contractors can 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 can be engaged.

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 can be engaged by a company. However, the rights and obligations of an independent contractor need to 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 upon 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). Fixed-term employment of employees earning below a threshold amount that is published annually (the BCEA threshold), currently set at ZAR205,433.30, is partially restricted, in that such employment may only be freely utilized for a restricted time (3 months), unless one of a limited number of exceptions and/or reasons for using longer fixed-term employment exists.


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 employees 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) access to training and skills development on a whole not less favorable that 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 will apply. 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 one aspect to be considered.

Agency worker

Employees earning below the BCEA threshold enjoy additional protection if placed at a client through an agency (temporary employment service). Except in limited circumstances, after an initial period of placement, the agency worker will be deemed employed by the client, without the loss of any remedies against the agency, and become entitled to have terms of employment equalized relative to comparable permanent employees of the client. No deemed employment applies to higher-earning agency workers.

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 employees" 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 can 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 can 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 can 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 have to 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

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 he or she is subject to the LSA, and is, in fact, an employee.

Agency worker

Called a "dispatch worker" in Taiwan, and 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 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.

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 against 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 the legislation. Establishment of a subcontractor relationship for auxiliary works for production of goods and services or 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% 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 can 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, he 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 typically will be 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

Indefinite, fixed-term and determined work contract for a specific project. Part-time and full-time.

Independent contractor

Independent contractors are allowed, as long as the service to be performed under the contract is carried out using the contractor's own resources and employees. Self-employed independent contractors are paid gross and are responsible for their own tax contributions.

Agency worker

Severe restrictions on agency workers are in force, since outsourcing is generally prohibited. Failure to comply with these obligations may result in joint liability for all employment related obligations, when services are "inherent" or "connected" to the beneficiary's business.

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

An individual can provide services to an enterprise or organization in Vietnam as an independent contractor. The provision of services as an independent contractor, however, falls under the jurisdiction of the 2015 Civil Code 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 an employment 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 will be treated by the authorities as an employment 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.

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.