· Are you a PEO or a temporary work agency?
· Are you looking to operate in a country where a temporary work agency or a labour leasing licence is needed, but difficult to get?
If the answers to these questions are yes, the best advice is: Get the licence. The consequences of operating without it can be very painful. Here are some examples:
Italy. Leasing workers provided by a non-authorised agency may incur you a criminal penalty equal to:
€60.00 for each involved worker, multiplied by each day of staff-leasing.
So, if you have 20 workers for a duration of one year, that penalty could amount to a whopping €438,000.And, if it could be proved that it had been done fraudulently, you could be facing an additional criminal penalty of €20.00 per employee multiplied by each day of fraudulent staff leasing. That would take the total to an eyewatering €584,000.
Germany. The supply of temporary workers without a licence can get you an administrative fine of up to €30,000. Plus:
· Temporary workers supplied without a licence are likely to be automatically considered as though they were in a direct employment relationship with your client (the end-user).
· Since the laws on the engagement of employees would have been ignored, this could lead to additional hefty fines to you or your client of up to €500,000 under different laws.
· There would also be the consequences of disregarding the applicable employment rights of each individual.
The truth is that whatever the size of your business, if you don’t comply with the law, you can get caught. Here are some of the circumstances which could lead to you being investigated:
- Formal complaint by a worker or employee
- Whistleblower (any member of the public)
- Court notification (employment tribunals and courts in certain jurisdictions may prompt further investigation)
- Random spot checks
While obtaining these licences can be complex, it’s vital to have them. If you need support getting them, talk to a legal expert. They’ll help to smooth the way.
Want support or advice?
At PEO Legal, we provide legal and compliance advice for professional employer organisations and staffing companies around the world. For advice about any point of cross-border employment law – including licensing advice about any country in the world - contact us, today.