When you start expanding your business on an international scale, you have to consider the many aspects of employment law. While you’re familiar with running a company in your country, your countries of expansion may have very different regulations.
When you work with Globalization Partners, we simplify the global expansion process with our Employer of Record services. This model allows us to act as your entity in-country. Sidestep the subsidiary process and gain access to our experienced team of lawyers and HR experts.
We help you manage your payroll with complete compliance, and we ensure your employees receive proper compensation and benefits. Our team helps you navigate cultural nuance and find the talent right for your company — and since everything is under our subsidiary, we’re responsible for all the legal risks.
Take a look at some of our international knowledge and why you can trust us for your global expansion in Monaco.
Doing Business in Monaco
Monaco is a popular location for expanding companies for various reasons. With minimal taxation and an excellent infrastructure, the small principality offers high-value real estate and a pool of wealthy consumers. The country is brimming with investment opportunities, and there are very few rules to follow to get started.
Governed primarily by collective agreements, employees have a lot of say in their treatment within an industry. It’s vital to pay attention to these changing regulations to keep your employment legal and your employees satisfied.
Monaco labor laws do not require an employment contract between the employer and the worker. However, employees must obtain a work permit to be legally hired. The country deals with collective agreements more than employment contracts.
When you work as an employer, you may negotiate with labor unions to define employment terms. There may already be collective agreements in place for your industry.
The standard workweek is 39 hours, and a person can work up to 47 hours a week with overtime pay for all time beyond the statutory hours. Employees can work 10 hours a day maximum, even with overtime, and can only exceed that limit with authorization from the Labor Inspector.
Employees receive a 25% wage increase for the first 8 hours of overtime and a 50% increase for subsequent hours. If an employee is scheduled to work two 10 hours shifts consecutively, they must have at least 10 hours of rest between shifts.
Working hour regulations also include rules for women. They cannot work factory or workshop jobs at night, from 10 p.m. to 5 a.m., unless they occupy a management position.
Employees can accumulate paid time off after working with an employer for a month. They earn 2.5 days of leave each month of employment, and they can accumulate up to 30 days a year. The days received each month increase once an employee works for a certain amount of time. These increases are as follows:
- At 20 years, 4.5 days per month
- At 25 years, 6.5 days per month
- At 30 years, 8.5 days per month
For these time-off increases, employees can accumulate up to 36 days off per year. During these days, their pay can be equal to what they would’ve earned had they worked, or 10% of their gross salary. Employees determine the option that they prefer.
Monaco considers Sunday a legal day of rest for everyone, though this circumstance can change according to the job.
In Monaco, there are no general laws regarding the amount of sick leave an employee receives or if these days are paid. Sick leave for any reason should not be considered vacation leave. Collective agreements may describe any other sick day terms.
Employees are also entitled to compassionate and special leave. This time off includes:
- Four days for marriage.
- One day for the wedding of a child.
- Two days for a birth in the family.
- Two days for the death of a family member.
Upon a medically confirmed pregnancy, employees are entitled to paid maternity leave. Pay for these days is tracked daily, so workers receive the earnings they would have made if they worked.
Maternity leave varies based on how many children a person has. For the first and second birth, a mother will receive eight weeks before and eight weeks after the pregnancy. It is illegal to work two weeks before giving birth and six weeks after.
For the third birth and anything more, mothers receive 26 weeks total, and they can choose between two arrangements — eight weeks before and 18 weeks after, or 10 weeks before and 16 weeks after. Extra weeks are added to account for caring for other children after delivery.
Employees are entitled to resting days during the country’s 12 public holidays. This time off is separate from vacation leave, and employees should receive their standard pay during these days. The holidays are:
- New Year’s Day
- Saint Dévote’s Day
- Corpus Christi
- May 1st
- Easter Monday
- The Prince’s Day
- Whit Monday
- All Saints’ Day
- Christmas Day
- The Immaculate Conception
If any days marked in bold fall on a Sunday, the public holiday should move to the following Monday.
Termination and Severance
Employers can terminate employees on the following grounds:
- Economic concerns
- Physical health
- Disciplinary action
After six months of service, an employee needs one month of termination notice. After two years, they need two months. If an employee is dismissed without stated grounds, they receive a severance equal to the daily wage each month of seniority.
If an employer dismisses an employee on grounds like misconduct, the worker receives the standard French severance, 25% of monthly pay for each year seniority. Past 11 years of service, employees receive 33% of monthly pay.
Collective agreements may define terms beyond these standards, such as extended notice periods or larger severance packages.
There is no deductible income tax for residents, but there are social security contributions depending on an employee’s gross salary.
Employers are responsible for employee compensation should a worker injure themselves on the job. Monaco also has a public healthcare system that is supported by social security contributions.
If an employee loses significant wages due to long-term illness, they can earn half their salary from the social fund. Registered employees can also receive free healthcare if they show proof of:
- 120 hours of work in the past month.
- 200 hours of work during the previous quarter.
Bonuses and Additional Benefits
Employment laws do not outline any required benefits or bonuses, though these terms may change depending on collective agreements.
Expand Your Business to Monaco With Globalization Partners
Globalization Partners makes international expansion easy. Reach out to us today to learn more about our global PEO services.