For French companies looking to recruit international talent, look no further than the UK’s skilled workers. The United Kingdom is a highly educated and innovative country to hire from, with significant tech hubs like Manchester and London thriving. French companies that are in the financial services industry may find it especially beneficial to expand and hire in the UK.
Not to mention, the UK is quite close to France — all it takes is a quick train ride under the Channel tunnel. This proximity means there’s only a one hour time difference, so working similar core hours throughout the day is easy.
It doesn't have to be hard for French companies looking to hire in the UK. With an Employer of Record (EOR), hiring UK skilled workers is an efficient and streamlined process.
Elements of Compliance When Hiring in the United Kingdom
When hiring UK skilled workers, there are many intricate local labor laws to adhere to. This includes employee classification, employee contracts, annual leave, payroll cycles, and more.
In the United Kingdom, a “worker” is an umbrella term that refers to many different groups. Workers can be full-time employees, part-time employees, short-term workers, casual laborers, agency workers, or those who participate in the gig economy, like Uber drivers. Those who are employed under a zero-hour contract are also workers.
All workers are entitled to paid holidays, an hourly wage, protections against unlawful termination, paid leave, pension contributions, and rest days.
Employees receive all the statutory benefits that workers receive and more. This includes statutory sick leave, maternity leave, and the right to request flexible working.
Risk of Misclassification
When hiring in the United Kingdom, classification is one of the most important things to be aware of. Be sure to correctly classify your employees as employees and not independent contractors. Many times, employers do this as a way to avoid taxes and the added expenses associated with hiring an employee.
The United Kingdom has legislation in place to avoid misclassification: IR35. IR35 aims to prevent income tax avoidance by contractors who act as employees.
UK officials regularly update IR35 legislation, so employers must follow these changes closely to maintain compliance and avoid misclassification penalties.
Employment contracts are required by all employers hiring in the United Kingdom. However, an employment contract in the UK is commonly referred to as a Written Statement of Employment Particulars. This is basically a two-part document comprising a Principal Statement and a second, more general statement of employment.
Principal Statements must include the following information to be compliant:
- Employer's name
- Employee’s name
- Job title
- Job description
- Start date
- Payroll cycle
- Work hours
- Holiday allowance and if this includes public holidays
- Restrictions when working abroad
- Sick pay
- Leave allowances
The general written statement must include specific information related to non-mandatory terms of employment. This is to include probationary periods, severance pay, collective employment agreement, and fringe benefits, among other things.
Fixed-term contracts are a type of contract that has a definitive start and end date that is agreed upon by both the employee and employer. These contracts are used usually when organizations are testing new roles or covering for an employee who is on leave, like maternity leave.
Employers must treat employees on a fixed-term contract the same as they would a full-time employee.
The United Kingdom does have limitations regarding fixed-term contracts, though. Any employee on a fixed-term contract for more than four years will automatically become permanent — unless the employer can provide a substantial reason not to do so.
Zero-hour contracts are popular in the United Kingdom. A zero-hour contract is a type of employment contract in which the employer is not required to give the employee a minimum amount of hours.
Equally, employees are able to refuse hours if they’re offered. Essentially, zero-hour contract workers are on-call and only work when the demand is needed.
Under employment laws in the UK, zero-hours workers are eligible for mandatory annual leave and the national minimum wage. Zero-hours workers can get other jobs while being employed by other companies.
Zero-hour contracts do come with misclassification risks. A 2021 study from the University of Aberdeen discovered that 7% of employers in the United Kingdom didn’t know how to classify their zero-hour contract workers. If you choose to hire an employee on a zero-hour contract, be sure to classify them correctly.
Payroll cycles around the world are vastly different. Some operate on a weekly, bi-monthly basis, or monthly basis. Adhering to payroll cycles is key to maintaining compliance with local labor laws. The United Kingdom’s payroll cycle is monthly. However, employers can choose to adopt a weekly payroll cycle.
Full-time workers in the United Kingdom are entitled to 28 days — or 5.6 weeks — of paid holiday each year. This is the maximum amount of paid holiday employees are to receive. For instance, someone who works five days a week and someone who works six days a week will receive the same amount of paid holiday.
Employees must be compensated for their remaining holiday allowance if they are terminated.
Standard Work Week
The standard work week in the United Kingdom is 48 hours. Employees can choose to work more by opting out of the standard 48-hour work week.
It’s important to note that employers are not legally mandated to pay their employees for overtime. Employers can choose to offer overtime pay, but it will be at their own discretion.
Probation periods, which in the UK are usually referred to as trial periods, are not legally required but are commonly offered by employers. Trial periods in the UK generally last three months.
Once the trial period ends and is successful, the employee will usually be offered an indefinite contract. If necessary, a trial period can be extended if the employer feels like the employee needs more time to be comfortable in the role.
Employees can be dismissed during their probationary period. However with the terms outlined in the contract.
Terminating an Employee
Many countries around the world protect their employees from termination until the end of probation. However, the UK does not. Skilled workers in the United Kingdom are not protected from termination until their second year of employment. So, employers can terminate their employees for any reason except any grounds related to the Equality Act of 2010.
What is the Equality Act 2010
The Equality Act 2010 is a significant piece of legislation that protects employees. Employers are not to discriminate against their employees based on any of the following criteria relating to pay, promotion, or termination.
- Gender reassignment
- Religion, belief or spirituality
There are two types of notice periods in the UK: mandatory notice and the notice period stated in employment agreements. Mandatory notice, judging by its name, is required by law. The employee’s length of service determines the notice period.
- One month to two years of employment: One week’s notice
- 2 to 12 years of employment: One week’s notice for each year of service
- 12+ years of service: 12 week’s notice
For notice periods stated in the contract, that is completely up to the discretion of the employee and employer. However, it must meet the minimum requirements of the mandatory notice period in the UK.
The UK does not have severance pay. Rather, it has statutory redundancy pay, which the UK government covers. This is given to an employee when they have been terminated due to redundancy and the employee has worked for the employer for a minimum of two years.
Some employers offer severance pay; the rate they pay is completely up to them.
Cost of Hiring UK Skilled Workers
When hiring in the UK, there are many costs associated with it. Not only do employers have to meet minimum hourly wage requirements, but they should also consider average salaries across industries, the location of their employee, the cost of social security contributions, and whether or not they’re offering supplemental benefits.
The minimum wage in the UK is regulated by the National Minimum Wage Act 1998 and the National Minimum Wage Regulation 1999. The National Minimum Wage Act 1998 states that workers must be at least 16 years old to receive this wage, and workers over the age of 23 must be compensated at least the national living wage.
If an employer pays less than what they agreed upon with the employee, under Section 32 of the UK Employment Rights Act 1996, it is considered an unlawful deduction of wages. This may result in legal proceedings or financial penalties from HMRC.
The majority of employees that you’ll hire will receive the National Living Wage. The National Living Wage increases each year by April 1st to adjust for inflation and cost of living. As of April 2023, the National Living Wage is GBP 10.90 per hour.
Average Salaries in the UK
While it’s imperative to meet the living wage requirements, it’s equally important to look at average salaries across the UK. This is to make sure you’re offering a competitive compensation package based on industry and experience. As of 2023, the median salary in the United Kingdom is GBP 27,700.
However, this varies significantly by industry. For those in the information technology sector, the average salary stands at GBP 42,000. Finance and insurance has a similar average salary of GBP 45,000. On the other hand, the average salary for administrative roles is GBP 29,000.
Salaries in London
It’s important to keep in mind that these salaries reflect the whole of the United Kingdom. Salaries in London will be higher to account for the cost of living and the London Living Wage.
The London Living Wage is GBP 11.95 per hour. While the London Living Wage is not federally mandated, it is a widespread campaign run by nonprofits to reflect the city’s high cost of living. This is to ensure that everyone has access to equitable standards of living.
When figuring out how much it costs to hire in the UK, figure out where they live first. Then you can determine the salary and overall cost.
Social Security Contributions
Another additional cost to keep in mind is social security contributions. Much like meeting the minimum wage requirements, contributing to social security is mandatory. Employers are required to contribute 13.9% of an employee’s salary to cover social security, which covers pension, healthcare, and insurance.
While offering supplemental benefits is not mandatory, it gives employers a competitive edge in the recruiting process. The cost ultimately depends on which benefits you choose to offer. However, common supplemental benefits for remote workers include the following:
- Home office allowances
- Gym memberships
- Transportation stipends
- Coworking passes
- Employee stock options
- Unlimited paid time off (PTO)
Hire Employees in the UK: What a Legal Employer Needs to Know
There are two primary ways French companies can go about hiring in the United Kingdom: by setting up their own foreign subsidiary or working with an Employer of Record (EOR). An EOR in the UK will make hiring abroad an efficient, compliant, and overall positive experience.
Setting up a Foreign Subsidiary
A foreign subsidiary is a legally independent business entity that’s set up in a foreign country. Establishing a local entity independently takes time, effort, money, and resources. Doing this may be only worthwhile if you plan on having a large team based out of the United Kingdom in the near future.
Working With an Employer of Record
Ultimately, working with an Employer of Record (EOR) is the simplest and most efficient way to hire skilled workers in the UK. It’s the best platform for companies looking to hire, manage, and pay employees across the world. An EOR in the UK acts as the legal employer where you want to hire and takes care of all the necessary administrative work so you can focus on connecting with your remote employee.
All Documentation Is Collected
EOR services also ensure that all documentation from the employee is correct and submitted. This includes right-to-work entitlements, National Insurance (NI) numbers, banking information, and more. Additionally, properly documenting your local workforce in the UK prevents compliance risks whether you are onboarding remote workers, international contractors, or both.
Employment Contract is Compliant
An Employer of Record service provider makes sure that employment contracts are compliant with all labor laws and regulations. An EOR in the UK guarantees that the employment contracts include all the necessary information, such as job titles, roles, and compensation.
Benefits are Localized
An Employer of Record service deals with all mandatory benefits required for legal employment. Also, EORs, like Borderless, offer attractive, localized and tailored global benefits. This includes medical, dental, vision and life insurance, as well as retirement savings plans.
Vacation and Public Holidays Are Tracked
Leave allowance in the UK will be different from France, so it may be hard to keep track of everything. Thankfully, navigating public holidays and vacation time for employees in the United Kingdom is easy with the help of an EOR. The majority of employees in the UK are entitled to 5.6 weeks of paid holiday each year. This includes agency workers, contract workers, and those who work irregular hours.
The United Kingdom has eight public holidays. However, regional public holidays vary. Don’t worry about figuring them out right this minute — an EOR can help.
Social Security Contributions Are Accurate
French employers hiring in the UK need to be aware that they are required to pay social security contributions. Remaining compliant with social security in the UK can be complicated, but thankfully, an EOR takes care of it.
Paying Employees Is Easy
Borderless takes care of payroll for your employees in the United Kingdom. This way, paying employees in the correct currency is efficient, secure, and timely.
Overall, working with an EOR in the UK comes with many benefits. Using an EOR to hire employees in the United Kingdom will minimize costs, mitigate risks, and make hiring abroad a fast and efficient process.
Hire in the UK with Borderless
To enjoy everything the United Kingdom has to offer and to hire skilled workers in the United Kingdom easily, work with Borderless.
With help from the global employment experts at Borderless, your organization can benefit from guidance when navigating everything from income tax and national insurance to tax authorities, the onboarding process for new employees, and adhering to local laws, among many other areas of importance.
To get started, book a demo today.
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.