Employer of Record Guide in 

Monaco

Vacation Leave

• Minimum entitlement: 2.5 working days per month of actual work = 30 working days (5 weeks) annually
• Accrual period: June 1st to May 31st of the following year
• Vacation pay: Normal salary continues during vacation period
• Payout on termination: All accrued unused leave must be paid out

Sick Leave

• Medical certificate: Required within 48 hours of absence
• Pay structure:
  • Social Security (CCSS): 50% of usual salary
  • Employer supplement: Additional 40% for employees with 2+ years of service
  • Total: Approximately 90% of usual salary for eligible employees
• Long-term disability: Mandatory insurance with potential disability pension for employees under 60

Maternity Leave

Note: Research shows discrepancy in maternity leave duration - please verify current entitlements

• Duration: 18 weeks standard (8 prenatal, 10 postnatal), extended for third child or multiple births
• Pay: 90% of average daily salary via CCSS
• Eligibility: Must be registered with CCSS and meet minimum work history requirements
• Job protection: Protected from dismissal during pregnancy and maternity leave

Parental Leave

• Paternity leave: 21 consecutive calendar days for single birth, 28 days for multiple births or households with 2+ children
• Timing: Must be taken within four months of birth
• Pay: 90% of average daily salary via CCSS
• Effective date: Late 2023 law change for private sector
• Adoption leave: Available with duration depending on child's age and number of children

Bereavement Leave

Family death leave:

• 2 days: Spouse, child, parent, sibling, grandparent, grandchild
• 1 day: Parent-in-law (requires 3+ months of service)
• Pay: Paid leave for qualifying events

Personal & Family Leave

• Marriage leave: 4 days for own marriage, 1 day for child's marriage
• Family support: Anonymous donation system allowing employees to donate unused leave to colleagues caring for seriously ill family members

Summary

Termination Types

Termination with Cause:

• Valid personal reasons (inadequacy, disciplinary issues)
• Valid economic reasons
• Requires proper documentation and process

Gross Misconduct:

• Immediate termination without notice or severance
• High burden of proof on employer

Termination without Cause:

• Article 6 of Law No. 729 allows dismissal without specific reason
• Requires higher severance payments

Constructive Dismissal:

• Recognised as 'prise d'acte' or 'licenciement tacite'
• Applies when work conditions become intolerable

Notice Period Requirements

Based on length of service:

Pay in Lieu of Notice (PILON): Employers may pay salary instead of requiring work during the notice period.

Severance Pay

Eligibility: Required for terminations (except gross misconduct) with 2+ years of service

Standard calculation:

• First 10 years: 1/4 month salary per year of service
• After 10 years: 1/3 month salary per year of service

Article 6 dismissals: Higher severance payment capped at 6 months' salary

Collective agreements: May provide more favourable terms

Probationary Periods

• Maximum duration: 3 months, renewable once within the limit
• Termination rights: Either party may terminate with minimal notice during probation
• Documentation: Must be clearly defined in writing before employment begins

Final Pay Requirements

Timeline: Must be delivered upon termination

Components:

• Outstanding salary
• Accrued vacation pay
• Applicable severance
• Pay in lieu of notice

Termination Documents & Process

Required process:

• Written notice via registered letter with acknowledgement
• Clear statement of reason if termination is for cause

Required documents:

• Final payslip
• Certificate of employment (certificat de travail)
• Final settlement receipt (solde de tout compte)

Anti-Discrimination & Retaliation Laws

Protected characteristics: Origin, sex, family situation, political opinions, trade union activities, religion, sexual orientation, age, disability

Enhanced protection: Pregnant women, employees on parental leave, and staff representatives require Labour Authority approval for termination

National (Statutory) Holidays

Monaco observes 12 public holidays in 2025:

Regional Variations

Not applicable - Monaco is a city-state with no regional variations.

Holiday Pay Eligibility

To qualify for holiday pay, employees must:

• Be present the day before and after the holiday (unless authorised absence)
• Be entitled to holiday pay for all public holidays

Working on a Statutory Holiday

If an employee works on a public holiday:

• They receive double pay, or
• A paid day off in compensation

Substitution Days

• If a holiday falls on Sunday, the following Monday is observed
• Holidays falling on company non-working days are still considered paid days off

Required Documents for Employment

• Employment contract: Written contract highly recommended though not legally required
• Work permit: All non-Monégasque nationals require valid work permit before employment
• Hiring declaration: Employer must submit to CCSS
• Proof of residence: Required for Monaco or neighbouring French municipality
• Identification: Valid ID card or passport
• Banking information: For salary payments

Language Requirements

• Official language: French
• Working language: French predominant; English/Italian advantageous in international sectors

Background Checks & References

• Permitted: Criminal background checks (casier judiciaire) for work visa/residence permit
• Restrictions: Broad criminal record checks generally not permissible except for sensitive roles
• Identity verification: Employers may conduct basic identity verification

Data Protection & Privacy

• Governing law: Law No. 1.565 aligned with EU GDPR principles
• Employee rights: Access, rectification, and erasure of personal data
• Employer obligations: Technical/organisational protection measures, 72-hour breach notification to APDP, potential DPO appointment

IP Assignment & Confidentiality

• IP ownership: Complex rules requiring explicit employment contract clauses
• Required clauses: Confidentiality, non-solicitation, IP assignment provisions
• Non-compete: Maximum 24 months duration, limited scope/geography, adequate remuneration required

Probation Period Setup

• Documentation: Must be clearly defined in writing before employment begins
• Maximum duration: 3 months with possible one-time renewal

Onboarding Timeline (Sample)

What the EOR Handles

Borderless AI will handle:

• Employment contracts and local compliance
• Work permit application support
• CCSS registration and social security compliance
• Payroll setup and monthly processing
• Labour Authority notifications
• Local language legal formatting

Worker Classification: Employee vs Contractor

The distinction is based on the subordinate relationship (lien de subordination):

• Employees: Work under employer control, organisationally integrated, economically dependent
• Contractors: Independent service providers with autonomy over work methods
• Misclassification penalties: Retroactive social security contributions, taxes, and benefits
• Enforcement: Labour Inspectorate and CCSS bodies monitor compliance

Unionisation & Collective Agreements

• Right to unionise: Constitutional right in Monaco
• Main federation: Union of Trade Unions of Monaco (USM)
• Collective bargaining: Common practice setting industry standards exceeding legal minimums
• Union-heavy industries: Hospitality, retail, and construction sectors

Cultural Norms & Workplace Expectations

Monaco's workplace culture reflects its international character:

• Multilingual environment: French required, English/Italian valuable
• Formal business culture: Professional dress and etiquette expected
• Work-life balance: Respected, with generous leave entitlements
• Networking importance: Business relationships crucial in small market

Remote Work Considerations

Legal framework: Telework (télétravail) regulated by Law no. 1.429

Requirements:

• Contract addendum required
• Labour authority approval necessary
• Minimum one-third of working time must be on-site

Cross-border arrangements:

• Italian residents: June 1, 2024 agreement allows telework from Italy under Monégasque social legislation
• French residents: Existing similar arrangement
• Tax implications: Employer must ensure compliance in employee's country of residence

Practical considerations: Given Monaco's small size and business culture, remote work is less common than in larger countries, though legally supported for appropriate roles.