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Employ Candidates Compliantly in Sweden

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  1. Overview: Sweden
  2. Global PEO and Payroll
  3. Global HR Compliance
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. Employee: Which Is Better?
  7. Global Payroll Calculator
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Are you looking to engage and pay foreign talent in Sweden?

Find out how you can decide whether you should engage and pay employees or independent contractors using our free ‘Employee vs. Independent Contractor’ Checklist.

Designed to be used by companies engaging remote workforce in Sweden, the checklist is the best way to define why and in what cases companies should onboard new hires or convert existing contractors/freelancers into employees without missing any crucial aspects.

 

What Our Clients Are Saying?

I want to share my experience dealing with Acumen International company.

Speed & responsiveness: Very prompt in response to my first enquiry about converting contractors into employees to follow-up questions.

Completeness of information: I like how detailed the estimates and the transparency make us feel more confident in knowing where the money goes.

Overall experience: I am pleased and impressed with how fast they respond to my enquiries. We can trust the company to employ the contractors we want to keep.

Quah Shen Dee,
People Success Officer

I always found Acumen International very supportive, professional and helpful. They pay salary on time and are always ready to sort out any issues.

I must admit I truly enjoy my time as an Acumen International employee and feel like they care about me as an individual. I have my own dedicated manager that provides me with detailed explanations when it’s needed. Payments are always prompt and the entire team does its best to respond to any of my questions.

I highly recommend Acumen International to anyone who requires their services.

Andrew Yanchurevich,
COO


Global EOR vs. Independent Contractors: Which is the Better Option for International Employment?

Expanding your business globally presents numerous opportunities but also carries the risk of legal complications, especially when it comes to global hiring. One misstep in classifying an independent contractor could lead to fines, legal challenges, and a tarnished reputation. Let’s delve into why hiring employees through a Global Employer of Record (EOR) offers a safer, more efficient, and often more cost-effective approach than going the independent contractor route.

Why Does Employee Misclassification Happen?

  1. Financial Incentives: Employers may categorise workers as contractors to minimise tax liabilities, social security contributions, and employee benefits costs.
  2. Circumventing Regulations: Misclassification can be a tactic to avoid compliance with labour laws, including minimum wage, overtime, and health and safety standards.
  3. Operational Flexibility: Employers may opt for contractors to quickly scale operations without the commitments tied to employee status.
  4. Knowledge Gap: Sometimes, misclassification occurs unintentionally due to employers’ insufficient understanding of labour and tax laws.
  5. Evolving Work Dynamics: The complexities of the modern gig economy can make the distinction between employee and contractor murky, leading to accidental misclassification.

Consequences of Incorrect Worker Classification

  1. Tax Liabilities: Employers could incur penalties for not fulfilling their tax obligations, while workers may be burdened with self-employment taxes.
  2. Legal Consequences: The absence of employee benefits like workers’ compensation and unemployment benefits could open employers to legal action.
  3. Lost Benefits for Workers: Employees lose out on vital advantages such as healthcare, paid time off, retirement funds, and job security safeguards.
  4. Reputational Damage: Employers may suffer brand degradation and financial stress after a misclassification lawsuit.
  5. Regulatory Audits: Employers risk increased scrutiny and audits, adding financial and time commitments for legal defence and settlements.

A Cautionary Tale: The High Cost of Employee Misclassification

An American corporation engaged a Slovakian IT freelancer on a full-time basis for a span of roughly three years. Recognising the potential hazards linked to the misclassification of this individual as an independent contractor, the company’s Human Resources director reached out to Acumen International to formalise the freelancer’s employment status.

Although Express Global Employment proposed officially employing Slovakian talent, the finance department rejected the offer. The projected costs exceeded what they were currently remunerating the freelancer. At that time, the likelihood of facing an employee misclassification lawsuit seemed remote, prompting the decision to maintain the status quo.

Fast forward six months, and the company reinitiated contact with Express Global Employment, approving the employment offer for the Slovakian freelancer. However, by that point, the working relationship had deteriorated. The freelancer opted not to enter the employment agreement, instead filing a complaint with the labour authorities. While the final outcome remains undisclosed, communication with the HR director suggested that the company was at risk of incurring substantial liabilities, including back payments for social security taxes, accrued vacation, severance packages, and additional fines. The total sum in contention was estimated to be approximately 70,000 EUR.

This case underscores the significant financial risks and legal ramifications of employee misclassification, emphasising the importance of preemptive action and due diligence in international employment arrangements.

How a Global Employer of Record Keeps You Safe

Hiring an employee with a Global Employer of Record (EOR) is the best way to ensure compliance with local employment laws and avoid the risks of misclassifying independent contractors.

When you hire an independent contractor, you are responsible for ensuring that they are correctly classified as such. You could be subject to fines and penalties if you misclassify an independent contractor as an employee. You could also be liable for the contractor’s unpaid taxes and benefits.

A Global Employer of Record (EOR) is responsible for hiring and managing your employees on your behalf across multiple jurisdictions. This means they will ensure that your employees are correctly classified and comply with all local employment laws. They will also handle all the paperwork and payroll administration, so you can focus on running your business.

5  Benefits of Hiring an Employee with a Global Employer of Record

When considering hiring an independent contractor, weighing the risks and benefits is essential. Hiring a Global Employer of Record can help you avoid the risks associated with misclassification and ensure that you comply with local employment laws.

  1. Compliance with local employment laws: A Global Employer of Record will ensure that your employees are correctly classified and comply with all local employment laws. This can help you avoid fines and penalties.
  2. Peace of mind: A Global Employer of Record (EOR) is responsible for hiring and managing your employees on your behalf across multiple jurisdictions. This means they will ensure that your employees are correctly classified and comply with all local employment laws. A Global Employer of Record will handle all the paperwork, payroll and tax administration, so you can focus on running your business.
  3. Cost-effectiveness: A Global Employer of Record can often be more cost-effective than hiring and managing employees yourself through your own legal entity.
  4. Flexibility: A Global Employer of Record can help you hire employees in countries where you do not have a physical presence.
  5. Intellectual Property Rights Protection: When employees are directly hired through a Global EOR, the contractual obligations are clear, and intellectual property rights are generally better protected. This reduces the risk of disputes over who owns the work produced, which is particularly crucial for companies in creative or tech-based industries.

The Tangible Benefits of Choosing Express Global Employment in Sweden

Here are the research-backed benefits of choosing Express Global Employment to guide your decision. The table below provides crucial data points illustrating the advantages, from cost savings to risk mitigation.

BenefitsResearch FindingsImplications for Your Business
Cost-EffectivenessOpting for a Global Employer of Record like Express Global Employment is roughly 30% less expensive than managing talent in-house.Significant cost reduction in talent management.
Operational SavingsOur services yield around 70% savings compared to establishing and operating your own foreign entity.Lower capital expenditure for international operations.
Local Entity AvoidanceNo need to establish and maintain a local legal entity, further reducing your operational complexity and costs.Streamlined operations and reduced legal obligations.
Employee RetentionEmployee loyalty increases by 47% when they are engaged as full-time employees.Enhanced talent retention, preserving your investment in human capital.
Risk MitigationOur Official Foreign Employment service mitigates nearly 95% of potential legal, financial, and business risks.Drastically lowers the risk profile of your international operations.
Operational FlexibilityAllows easy scaling, even in countries with strict employment laws. Businesses can start with as few as one or a couple of employees and scale effortlessly.Utilising our services yields around 70% savings compared to establishing and operating your own foreign entity.

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