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Employ Candidates Compliantly in Belgium

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  1. Overview: Belgium
  2. Work permit for hiring expats via PEO
  3. Contractor vs. employee: which is better?
  4. Global PEO and payroll
  5. Global HR Compliance
  6. Expand without a company set up
  7. Global Payroll Calculator
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Are you looking to engage and pay offshore IT developers in Belgium?

Find out how you can make an informed decision on 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 Belgium, 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 that arise.

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


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. This article delves into why hiring employees through a Global Employer of Record (EOR) offers a safer, more efficient, and often more cost-effective approach than independent contractors.

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 Costly Lesson: The Real-World Impact of Misclassifying Employees

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 Express Global Employment 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.

The Importance of Regulatory Compliance

Employment classification is under increasing scrutiny by regulatory agencies, be it the IRS in the United States or HM Revenue & Customs in the United Kingdom. The consequences for non-compliance are severe, ranging from monetary fines to legal sanctions, thus making adherence to local and national employment laws paramount.

Proactive Approach to Employee Misclassification:

Our team aids in determining the correct employee classification. We also provide expert guidance to ensure regional tax and labour compliance.

  • Accurate Employee Classification & Tax Compliance: We harmonise the proper employee categorisation with regional specifications and support full tax compliance.
  • Affordable Global Employment Solutions: We provide compliant global employment solutions that are flexible and affordable. With us, you can offer all statutory benefits without resorting to independent contractor workarounds for full-time roles.
  • Adaptable Employment Structures: We offer tailored solutions for short-term projects or long-term positions, ensuring a perfect fit for your international operations and minimising potential classification errors.
  • Comprehensive Tax Guidance in 190 countries: Our team ensures you’re in line with local tax obligations, from payroll to benefits, removing the guesswork for you.
  • Global Payroll Calculator: Leverage our Global Payroll Calculator for real-time insights on payroll costs and hiring, enhancing precision in budgeting and strategic talent acquisition decisions.

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.

All-In-One Express Global Employment Solution

Express Global Employment provides comprehensive services for building a global team, handling all aspects from hiring to compliance. Here’s what a Global Employer of Record can do:

  • Global Mobility Support: Simplifies onboarding and immigration, enabling quick onboarding and engagement of international talent.
  • Effortless Onboarding: Streamlines global employee onboarding to enhance productivity and speed up results.
  • Global Payroll & Benefits Management: Manages international payroll and benefits, ensuring compliance and competitive compensation.
  • Borderless Expansion Without Local Entities: Facilitates workforce expansion in 190 countries, removing the need for local business entities.
  • Hire Internationally, Operate Everywhere: Offers support for scaling operations and seizing international opportunities swiftly.
  • Risk-Free Market Navigation: Provides expert guidance for secure expansion, managing permanent establishment, employee misclassification risks and compliance challenges in new markets.

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