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Employment Law Basics by European Country | BOOTSTRAP in EUROPE | Startup Guides

TL;DR: what employment law do you need to know before hiring in Europe?

Every EU country starts from the same floor: a 48-hour average week, at least four weeks of paid leave, the key terms in writing within seven days and, as a rule, no more than six months of probation. Everything above that floor is national: the minimum wage, how long probation can be, how much notice you owe, who pays sick pay and what you add on top of salary. Where the employee works, not where your company is registered, decides which rules apply. Budget roughly 10% to 45% on top of gross salary for employer contributions, depending on the country, and register as an employer before day one.

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Your first hire is the moment your startup stops being only your problem. From that day you're responsible for someone else's income, holidays, health and safety, and the paperwork that proves it. In Europe there's an extra layer: 27 countries, 27 labour codes, and a set of EU directives that sit underneath all of them.
This guide is for bootstrapped founders hiring their first one to ten people. It explains the EU rules that apply everywhere, then compares ten countries where many small European startups hire: Germany, France, the Netherlands, Spain, Italy, Portugal, Ireland, Estonia, Poland and Malta. You'll see the minimum wage, probation, leave, notice, sick pay, employer costs and the registrations you must do before the first payslip. It isn't legal advice: use it to ask better questions and to know when to bring in a lawyer instead of doing it yourself.

What does EU law decide for every country?

EU directives set minimum standards. Each country turns them into national law and can add more protection, never less. For a small employer, these are the rules you'll meet everywhere:
  • Working time. The Working Time Directive (2003/88/EC) caps the average working week at 48 hours, overtime included, guarantees 11 hours of rest in every 24 hours and at least four weeks of paid annual leave.
  • Written terms. Under Directive (EU) 2019/1152 on transparent and predictable working conditions, employees must get the core terms in writing between their first day and their seventh day: who the parties are, place of work, job, start date, probation, pay and working hours. The rest, such as leave and notice rules, follows within a month.
  • Probation. The same directive limits probation to six months, longer only in exceptional cases, and you can't start a new probation when you renew a contract for the same job.
  • Second jobs. You can't ban an employee from working for someone else outside your working hours, unless you have an objective reason such as confidentiality or a conflict of interest.
  • Whistleblowing. Once you have 50 or more workers, the Whistleblower Directive (2019/1937) requires an internal reporting channel.
Two things are not set at EU level. First, the minimum wage: the Adequate Minimum Wages Directive (2022/2041) sets a framework, but the EU Court of Justice annulled part of it in November 2025, and countries still decide the amount themselves. Second, dismissal rules: notice, severance and protection against unfair dismissal are almost entirely national. That's where most of the differences in this guide come from.

Employment law by country: quick comparison

The table below shows the general statutory rules for an ordinary full-time employee in 2026. Collective agreements, which are common in France, Italy, Spain, the Netherlands and Portugal, often set better terms, so check whether one covers your sector.
CountryMinimum wage 2026Max probationMinimum paid leaveEmployer notice after 2–3 years
Germany€13.90 an hour6 months24 working days on a 6-day week (20 on 5 days)1 month to the end of a month
France€12.31 an hour from 1 June 2026 (€1,867.02 a month at 35 hours)2–4 months by job level, renewable once if a branch agreement allows5 weeks (30 working days on a 6-day week)2 months
Netherlands€14.99 an hour from 1 July 2026 (age 21+)2 months (none on contracts of 6 months or less)4 times the weekly hours (20 days full-time)1 month
Spain€1,221 a month, paid 14 times6 months for qualified technicians, 2 months for others, unless a collective agreement says otherwise30 calendar days15 days, plus severance
ItalyNo statutory amount; set by collective agreements6 months4 weeksSet by the collective agreement
Portugal€920 a month, paid 14 times90 days (180–240 for senior roles)22 working days30 days in a redundancy
Ireland€14.15 an hour6 months, except in limited cases4 working weeks2 weeks
Estonia€946 a month from 1 April 20264 months28 calendar days30 days
PolandPLN 4,806 a month3 months20 days (26 after 10 years, schooling included)1 month (3 months from 3 years)
Malta€229.44 a week (age 18+)6 months (1 year for senior roles paid at least double the minimum)192 hours on a 40-hour week, plus public holidays falling on rest days4 weeks
Sources: national labour codes and government pages (bmas.de, service-public.fr, business.gov.nl, boe.es, normattiva.it, Código do Trabalho, citizensinformation.ie, tooelu.ee, the Polish Labour Code, dier.gov.mt), checked October 2026.
To compare countries fairly, Eurostat converts every national minimum wage to euro per month. In July 2026, 22 of the 27 EU countries had one, ranging from €620 in Bulgaria to €2,771 in Luxembourg. Denmark, Italy, Austria, Finland and Sweden have none; there, collective agreements set the pay floor. For a broader view of living and running costs, see our country-by-country cost analysis for bootstrapping in Europe.

What does an employee really cost on top of salary?

Gross salary is never the full bill. Employers pay social security contributions, sometimes extra salary months, and in some countries a share of sick pay, pensions or health insurance. Eurostat puts non-wage costs at 24.8% of total labour costs across the EU in 2025, and the average hourly labour cost at €34.9.
CountryEmployer contributions (approx.)Extra costs required by lawSick pay the employer carries
GermanyAbout 21% plus accident insuranceNone100% of pay for up to 6 weeks per illness
FranceAbout 45% on average, lower at higher salariesCompany health insurance: employer pays at least 50%Top-up to 90% of pay after 1 year of service
NetherlandsAbout 17% for a small employer, plus a sector pension where one applies8% holiday allowanceAt least 70% of pay for up to 2 years
SpainAbout 32%Two extra payments a year (14 in total)60% from day 4 to day 15
ItalyAbout 30%13th month through collective agreements, plus TFR (about one month's pay a year)Top-ups set by the collective agreement
Portugal23.75%Holiday and Christmas subsidies (14 payments)None by law; social security pays from day 4
Ireland11.40% above €552 a week (from 1 October 2026)Auto-enrolment pension: 1.5% employer5 days a year at 70%, up to €110 a day
Estonia33% social tax plus 0.8% unemployment insuranceNone70% from day 4 to day 8
PolandAbout 20%PPK pension: 1.5% employer, unless the employee opts out80% for up to 33 days a year
Malta10%, cappedStatutory bonuses and allowances: €512.52 a yearPaid sick leave of 2 working weeks a year where no sector order applies
Sources: PwC Worldwide Tax Summaries and national authorities, checked October 2026. Contribution rates are rounded and depend on salary, sector and company size.
Two practical points for a bootstrapped budget. First, extra salary months change your cash flow: in Spain and Portugal, two months of the year cost roughly double. Second, sick pay rules shift risk to you: a Dutch employer can carry up to two years of wages for a sick employee, so many small Dutch firms insure that risk. Plan the cash before you sign; our guide to how to pay yourself while bootstrapping shows how to protect founder pay at the same time.

Country guides: what a first-time employer must know

For each country: the dismissal rule that matters most, what you must register before the first day, and anything that surprises founders.

Germany

Germany's Dismissal Protection Act (KSchG) applies once an employee has worked for you for more than six months and you have more than ten employees (part-timers count as 0.5 or 0.75). From then on, a dismissal must be socially justified on personal, conduct or business grounds. Below that size, you still owe the statutory notice. During probation the notice is two weeks.
Before the first hire, you need a company number (Betriebsnummer) from the Federal Employment Agency, applied for online. Since 2024 that application needs your number from the statutory accident insurer (Berufsgenossenschaft), which you must notify within a week of starting the business. Employees can elect a works council once you have five permanent employees.

France

France is the most procedural. To dismiss, you send a written invitation to a preliminary meeting, hold it at least five working days later, and send the dismissal letter with the reason at least two working days after that. After eight months of service, employees earn legal severance of a quarter of a month's pay per year for the first ten years.
Before the start date, file a pre-hiring declaration (DPAE) with URSSAF, no earlier than eight days ahead. You also need a staff register, an information visit with the occupational health service, a supplementary pension (Agirc-Arrco) through your payroll filing, and company health insurance (mutuelle) of which you pay at least half. An elected staff committee (CSE) becomes mandatory once you have had 11 employees for 12 months in a row.

Netherlands

You can't simply give notice in the Netherlands. For economic reasons you need permission from the Employee Insurance Agency (UWV); for reasons such as poor performance you go to the subdistrict court; or you agree a settlement. A dismissal without the right approval is invalid. Leavers get a transition payment of one third of a month's salary per year of service.
Register for a payroll tax number (loonheffingennummer) with the Tax Administration, and contract an occupational health service or company doctor, which is mandatory. Pension is mandatory only if your sector has a compulsory fund or collective agreement scheme. The sick pay rule is the big one: at least 70% of salary for up to two years. A works council is required from 50 employees.

Spain

A dismissal for objective reasons costs 20 days' pay per year of service, capped at 12 months' pay, plus 15 days' notice. If a court finds it unfair, the employer chooses between reinstating the employee or paying 33 days per year, up to 24 months. Pay comes in 14 instalments: two extra payments, one of them at Christmas, unless the collective agreement spreads them over 12 months.
Register each employee with Social Security (alta) before they start work, and keep daily working-time records. A small company can manage health and safety prevention itself in many cases, but health surveillance must be outsourced. A bill to cut the working week to 37.5 hours was rejected by Congress in September 2025, so the limit is still 40 hours.

Italy

Italy has no statutory minimum wage. Pay follows the national collective agreement (CCNL) for your sector, and a 2026 decree made those agreements the benchmark for fair pay. Every employee builds up a severance fund (TFR) of about one-thirteenth of annual pay a year, paid out whenever the job ends. Notice periods come from the collective agreement.
Before the start date, send the mandatory hiring notice (UniLav) through the Ministry of Labour's online system. Small employers, up to 15 employees per unit and 60 in total, pay halved compensation for unjustified dismissal. In practice, choosing the right CCNL is the first decision, so most small firms use a payroll consultant (consulente del lavoro).

Portugal

Dismissal needs just cause or a formal objective procedure such as redundancy, with notice from 15 to 75 days depending on seniority and compensation of 14 days' base pay per year of service. A wider labour reform was rejected by Parliament in June 2026, so the current Labour Code still applies.
Notify Social Security before the contract starts and take out work-accident insurance, which is mandatory. Holiday and Christmas subsidies are both required by law, so a €920 minimum wage costs you 14 payments a year.

Ireland

Statutory notice is short, one week up to two years of service and two weeks from two to five years, but protection against unfair dismissal usually starts after 12 months. Statutory sick pay is five days a year at 70% of pay, up to €110 a day.
Register as an employer for PAYE with Revenue before the first payroll. Since 1 January 2026, the MyFutureFund auto-enrolment pension covers employees aged 23 to 60 earning €20,000 or more who have no workplace pension, at 1.5% from the employee, 1.5% from the employer and 0.5% from the State in year one, rising over ten years.

Estonia

Estonia is the lightest on paperwork. Enter each employee in the Employment Register (TÖR) no later than their first day; the Tax and Customs Board runs the register. Probation can last up to four months. Notice runs from 15 days in the first year to 90 days after ten years, and redundancy costs one month's average pay, with the Unemployment Insurance Fund adding more for long service.
The catch is cost: social tax is 33% on top of salary, plus 0.8% unemployment insurance. Sick days 1 to 3 are unpaid, the employer pays days 4 to 8, and the Health Insurance Fund takes over from day 9.

Poland

Notice depends on time with you: two weeks under six months, one month after six months, three months after three years. You must give the reason for dismissal in writing and tell the employee they can appeal to a labour court. Employees within four years of retirement age are protected from dismissal with notice.
Register the employee with the social insurance office (ZUS) within seven days, arrange the pre-employment medical exam and health and safety training before they start, and offer the PPK pension plan after three months unless they opt out. Since 2026, past work on civil-law contracts and as a sole trader counts towards leave entitlement.

Malta

Malta sets a weekly minimum wage, €229.44 for adults in 2026, and sector Wage Regulation Orders can set more. Every employee also gets statutory bonuses and weekly allowances, €512.52 a year in total. Notice rises with service, from one week after a month to 12 weeks for long service.
Submit an engagement form to Jobsplus for each employee and register as an employer to withhold tax and social security through the payroll system (FSS). Probation is six months, or a year for senior technical and managerial staff paid at least twice the minimum wage.

What about Sweden and Denmark?

Neither has a statutory minimum wage. Pay and many conditions come from collective agreements, which cover 88% of employees in Sweden and at least eight in ten in Denmark. Sweden's employer contribution is 31.42% in 2026, while Denmark's is low and mostly fixed amounts per employee. If you hire there, ask early whether your sector has an agreement and whether you want to sign one.

What to register before your first employee starts

Most fines for small employers come from missing paperwork, not from bad intentions. This is the minimum per country:
CountryBefore day oneAlso required early on
GermanyBetriebsnummer, accident insurer, register the employee with their health insurerPayroll reporting, working-time records
FranceDPAE pre-hiring declaration to URSSAFStaff register, occupational health visit, mutuelle, Agirc-Arrco pension
NetherlandsPayroll tax numberOccupational health service, sector pension if compulsory
SpainSocial Security registration (alta) for each employeeDaily time records, risk prevention plan
ItalyUniLav hiring notice onlineChoose and apply the right CCNL, TFR accrual
PortugalNotify Social SecurityWork-accident insurance
IrelandPAYE employer registration with RevenueAuto-enrolment pension checks
EstoniaEmployment Register (TÖR) entryMonthly tax and social tax return
PolandMedical exam and health and safety trainingZUS registration within 7 days, PPK after 3 months
MaltaJobsplus engagement formPayroll tax and social security (FSS)
Write your hiring and onboarding steps down as you go. The second hire is much easier if you document your processes before your first hire, and employee data falls under GDPR from day one, so add HR records to your GDPR compliance plan.

Hiring someone who lives in another EU country

Remote hiring is where small European startups most often get it wrong. The basic rule: the employee is protected by the labour law of the country where they usually work, even if your contract chooses another law, and they're insured in the social security system of the country where they physically work.
  • The employee works only in another country. You usually need to register as an employer there and run local payroll, or use an employer of record.
  • You send someone abroad for a while. A posting of up to 24 months can keep them in your home social security system with an A1 certificate.
  • They split their time between countries. If 25% or more of their work is in the country where they live, social security usually moves there.
  • They telework across a border. Under a framework agreement in force since July 2023, telework from home of less than 50% of working time can stay in the employer's system, if both countries signed it and you apply for an A1.
If you hire one person in a country where you have no company, an employer of record (EOR) employs them for you. In October 2026, Deel and Remote listed EOR plans from $599 per employee per month and Oyster listed $699. That's expensive next to local payroll, but cheaper than setting up a subsidiary for one person. Also check that the role really is employment: our guide to contractor vs employee classification explains the tests, and the decision framework for managing contractors vs employees helps you choose.

Pay transparency: the new rule for every employer

The EU Pay Transparency Directive (2023/970) had to be in national law by 7 June 2026. Some of its rules apply to employers of any size:
  • Tell applicants the starting pay or pay range before the job interview.
  • Don't ask candidates about their current or past pay.
  • Let employees ask about pay levels for work of equal value, answer within two months, and remind them of this right every year.
  • Don't use contract clauses that forbid employees from sharing their pay.
Gender pay-gap reports come later and only for larger employers: from June 2027 for companies with 150 or more workers, and from June 2031 for those with 100 to 149. Many countries missed the 2026 deadline:
Status in October 2026Countries
Fully transposedItaly, Malta, Lithuania, Slovakia, Greece
Partly in forceEstonia (recruitment rules since July 2026), Poland (recruitment rules since December 2025)
Draft lawNetherlands (target 1 January 2027), Spain, France (planned for 2028), Ireland
No full draft yetGermany (law expected in 2027), Portugal and others
Sources: law-firm transposition trackers, October 2026. Status changes often, so check your country before you publish a job ad. Publishing a pay range now is a good habit anyway: it saves interview time and is often seen as a sign of fairness.
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Common employment law mistakes founders make

  • Copying a contract from another country. A German template in Spain misses the 14 payments, and an Irish one in the Netherlands misses the holiday allowance and sick pay duty.
  • Starting before registering. In France, Spain, Italy, Portugal and Estonia the paperwork must be done before the first working day.
  • Calling an employee a freelancer. If you set the hours, provide the tools and they work only for you, labour inspectors may see an employee and claim back contributions.
  • Using probation as a long trial. Probation can't exceed the national limit, and in the Netherlands it's two months at most.
  • Forgetting the collective agreement. In much of Europe it, not the law, sets pay, notice and extra months.
  • Handing out equity without paperwork. Options need a written plan and have tax effects; see our guide to equity and stock option plans.
If a hire doesn't work out, handle it with the same care as the hiring. Our guide on how to let your first employee go as a compassionate CEO covers the human side, and the startup legal checklist by country covers the company side.

Conclusion: hire where you can afford to follow the rules

Employment law in Europe looks scary because there's so much of it, but for a first hire it comes down to a short list: register before day one, put the terms in writing within a week, respect the probation limit, budget the full cost including contributions and extra months, and know what dismissal involves before you need it. Pick the country with care, because where your employee works decides everything else. And for the first contract in a new country, an hour with a local employment lawyer or payroll provider is cheap insurance.

FAQ: employment law basics by European country

Which country's employment law applies to a remote employee?

Usually the law of the country where the employee normally works. A contract can choose another law, but it can't take away the mandatory protections of the country where the work is done. Social security also follows the place of work, with exceptions for postings of up to 24 months and for cross-border telework under the 2023 framework agreement.

How long can a probation period be in Europe?

EU law sets six months as the general maximum. National limits are often shorter: two months in the Netherlands, three in Poland, four in Estonia, and two to four months in France depending on the job level. Germany, Italy, Ireland and Malta allow six months, with longer periods only for specific senior roles or exceptional cases.

Which EU countries have no minimum wage?

Denmark, Italy, Austria, Finland and Sweden have no statutory minimum wage. Pay floors there come from collective agreements, which cover most employees, so check the agreement for your sector before you set a salary.

How much does an employee cost on top of gross salary?

It depends on the country. Employer contributions range from about 10% in Malta and about 11% in Ireland to about 33% in Estonia and Spain and about 45% on average in France. Add extra salary months in Spain and Portugal, the 8% holiday allowance in the Netherlands, and sick pay you carry yourself.

Do I need a company in a country to hire someone there?

Not always. You can often register as a foreign employer and run local payroll, or use an employer of record that employs the person for you. In October 2026, the big EOR providers listed prices from $599 to $699 per employee per month.

What must I give a new employee in writing?

Under EU Directive 2019/1152, the core terms (parties, place of work, job, start date, probation, pay and working hours) within seven days of the start, and the remaining terms, such as leave and notice rules, within one month.

Does the EU Pay Transparency Directive apply to small startups?

Yes, once your country has passed its law. Employers of any size must give applicants the pay or pay range before the interview, can't ask about pay history, and must answer employees' pay questions. Gender pay-gap reporting applies only from 100 workers, with the first reports due in 2027.

When do employees get protection against unfair dismissal?

It varies: after six months in Germany if you have more than ten employees, after 12 months in Ireland, and from the start in countries such as the Netherlands, where dismissal needs approval from UWV or a court. Read our guide to when to hire a lawyer instead of doing it yourself before you dismiss anyone.

About the Author

Violetta Bonenkamp, also known as MeanCEO, is an experienced startup founder with an impressive educational background including an MBA and four other higher education degrees. She has over 20 years of work experience across multiple countries, including 5 years as a solopreneur and serial entrepreneur. Throughout her startup experience she has applied for multiple startup grants at the EU level, in the Netherlands and Malta, and her startups received quite a few of those. She’s been living, studying and working in many countries around the globe and her extensive multicultural experience has influenced her immensely.
2026-03-17 07:50 Guides