Employer of Record in Monaco

An Employer of Record (EOR) in Monaco is a company that legally employs workers on your behalf. This lets you hire talent in Monaco without setting up your own local entity. The EOR handles all the legal and HR duties of employment, like payroll, taxes, and compliance with Monaco's labor laws. You manage your employee's day to day work, while the EOR takes care of the administrative side. An EOR provider like Rivermate can simplify your expansion into Monaco.

How an Employer of Record (EOR) Works in Monaco

Using an EOR in Monaco streamlines hiring. It allows you to build a team quickly and compliantly. Here are the steps:

• You find the candidate. You identify the person you want to hire in Monaco.
• The EOR hires the employee. The EOR becomes the legal employer on paper.
• A compliant contract is created. The EOR drafts an employment contract that follows Monaco's laws.
• HR tasks are managed. The EOR handles payroll, taxes, and social security contributions.
• You manage daily work. Your company directs the employee's day-to-day tasks and responsibilities.

Why use an Employer of Record in Monaco

Using an EOR allows you to hire employees in Monaco without the need to establish a local entity. This saves you time and money. An EOR handles the complexities of local labor laws, payroll, and benefits, so you can focus on your business.

Here are some key benefits:

• Fast Market Entry. Hire employees in Monaco quickly without the lengthy process of setting up a legal entity. This can take months and be very expensive.
• Compliance. An EOR ensures you follow all of Monaco's labor laws, tax regulations, and social security requirements. This reduces the risk of penalties for non-compliance.
• Reduced Administration. The EOR manages all HR-related tasks, including payroll, tax withholding, and benefits administration.
• Cost Savings. Avoid the significant upfront costs associated with company incorporation, such as legal fees and office space.
• Flexibility. An EOR is a great solution for short-term projects or for testing the Monaco market before committing to a full-scale presence.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Monaco includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Monaco.

Hiring in Monaco is a unique process. The principality's stable economy and favorable tax system attract many businesses. However, you must navigate a specific set of labor laws. All foreign nationals need a work permit, and employers must justify hiring them over a local resident. You'll also find that employment relationships are highly regulated, so clear documentation is key.

Employment contracts & must-have clauses

While not always legally required to be in writing, a written employment contract is highly recommended. It provides clarity for both you and your employee. In Monaco, there are two main types of employment contracts:

• Indefinite-term contract (CDI): This is the standard contract for permanent positions.
• Fixed-term contract (CDD): This contract is for a specific duration or project.

Your employment contracts should be in French, but a bilingual version can be provided. Key clauses to include are:

• Identification: Names of both the employer and employee.
• Job Details: Position, duties, and place of work.
• Compensation: Salary, benefits, and any bonuses.
• Working Hours: Details of the work schedule.
• Probation Period: If applicable, the duration must be stated.
• Notice Period: The required notice for termination.
• Paid Leave: Entitlement to annual leave.

Probation periods

You can include a probation period at the start of employment. This allows you and the employee to assess the fit. The duration of the probation period should be clearly stated in the employment contract.

During the probation period, either you or the employee can end the contract with a shorter notice period.

Working hours & overtime

The standard work week in Monaco is 39 hours. Any hours worked beyond this are considered overtime. Overtime pay is calculated as follows:

• First 8 hours: 125% of the regular hourly rate.
• Beyond 8 hours: 150% of the regular hourly rate.

There are also limits on the total number of hours an employee can work:

• Daily maximum: 10 hours.
• Weekly maximum: 48 hours.

Public & regional holidays

Monaco observes a number of public holidays throughout the year. Your employees are entitled to a day off for these holidays.

Here are the public holidays for 2024:

If a public holiday falls on a Sunday, the following Monday is typically a day off.

Hiring contractors in Monaco

You can hire independent contractors for specific projects or services. This can offer flexibility and access to specialized skills. When you hire a contractor, you are not responsible for their taxes or social security contributions.

However, it is crucial to correctly classify your workers. If a contractor is treated like an employee, they may be reclassified by the authorities. This can lead to penalties and fines.

An Employer of Record (EOR) can help you mitigate this risk. An EOR acts as the legal employer for your workers, ensuring compliance with local labor laws. This includes managing contracts, payroll, and benefits. Using an EOR allows you to hire talent in Monaco without establishing a local legal entity, saving you time and reducing administrative burdens.

In Monaco, your approach to compensation and payroll needs to be competitive to attract top talent. Salaries are generally high, reflecting the high cost of living and the specialized industries in the country, such as finance and luxury goods. You must follow local labor laws to ensure you are compliant and maintain a strong workforce.

Payroll cycles & wage structure

The standard payroll cycle in Monaco is monthly. You will typically pay your employees once a month, usually near the end of the month. You must provide a detailed payslip with each payment. This payslip should break down the gross salary, any deductions, and the net salary.

While not always required by law, a 13th-month salary is a common practice in Monaco. This is often paid in two installments or as a lump sum at the end of the year. Other common additions to a compensation package can include:

• Performance bonuses
• Profit-sharing
• Transportation allowances
• Lunch vouchers

Overtime & minimums

The standard workweek in Monaco is 39 hours. Any hours worked beyond this are considered overtime. The first eight hours of overtime are paid at 125% of the regular rate. Any additional overtime is paid at 150%.

As of early 2024, the minimum wage in Monaco is €11.65 per hour. This translates to a gross monthly salary of approximately €1,968.85 for a 39-hour workweek.

Employer taxes and contributions

As an employer in Monaco, you are responsible for making several social security contributions. These contributions cover various social benefits for your employees.

Employee taxes and deductions

One of the unique aspects of Monaco's system is the lack of personal income tax for most residents. This has been the case since 1869. The main exception to this rule is for French citizens residing in Monaco, who are still subject to French income tax.

Employees do, however, contribute to social security.

In Monaco, you'll find a system of employee benefits and leave that reflects its unique position in Europe. The approach is generous, ensuring people have ample time for rest and support for significant life events. You get a substantial amount of paid time off each year, and the social security system provides a strong safety net for health and family needs.

Statutory leave

When you work in Monaco, you are entitled to several types of leave.

• Annual Leave: You receive 2.5 working days of paid leave for each month you work. This adds up to 30 days of paid leave per year.
• Sick Leave: If you are sick, you can take time off to recover. You will need to provide a medical certificate to your employer. Your sick pay is covered by social security at 50% of your usual salary. For workplace injuries, this pay starts immediately.
• Maternity Leave: Expectant mothers are entitled to 16 weeks of maternity leave. Social security covers the pay during this time.
• Paternity Leave: Fathers can take 12 days of paternity leave, which increases to 19 days for multiple births. You can take this leave anytime within the four months after the child's birth.
• Other Leave: You can also take paid leave for specific family events. This includes four days for your own marriage, one day for the marriage of a child, and two days for the death of a close relative.

Public holidays & regional holidays

Monaco has 12 public holidays each year. If you are required to work on these days, you are entitled to double pay or another day off.

Typical supplemental benefits

In Monaco, some benefits are required by law, while others are commonly offered by companies to attract and retain talent.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR acts as the legal employer for your team in Monaco. This means you don't have to establish a local entity to hire employees. The EOR handles all the administrative tasks related to benefits.

Here’s how an EOR can help:

• Compliance: An EOR ensures you comply with all of Monaco's labor laws and regulations regarding benefits. They manage social security contributions and make sure your benefits package meets all legal requirements.
• Administration: The EOR takes care of enrolling your employees in mandatory benefit schemes. They handle all the paperwork and ongoing administration.
• Expertise: You get access to local HR and legal experts who understand the nuances of the Monegasque system. This helps you offer a competitive benefits package that is attractive to local talent.
• Simplicity: By managing payroll, taxes, and benefits, an EOR allows you to focus on your core business operations. You can expand your team in Monaco quickly and efficiently.

When an employment relationship in Monaco ends, you need to follow a clear process. This ensures you treat your employees fairly and stay on the right side of the law. The process involves specific rules for giving notice and paying severance. Failing to follow these rules can lead to legal problems.

Notice periods

When you decide to terminate an employee, you must provide them with a notice period. The length of this period depends on how long the employee has worked for your company.

Here are the minimum notice periods required by law:

These are the minimums. Your employment contract might specify a longer period. The notice period starts the day after you have formally notified the employee in writing. During this time, employees are typically allowed paid time off to look for a new job.

Severance pay

In Monaco, employees terminated without serious misconduct are usually entitled to severance pay. To qualify, they must have worked for you for at least two years. Severance pay is calculated based on the employee's salary and their length of service. It is designed to compensate them for the loss of their job.

If you dismiss an employee for gross misconduct, you do not have to pay severance. However, you must have a legally valid reason for the dismissal, whether it's for personal or economic reasons. Without a valid reason, a court could consider the termination wrongful, and you may have to pay damages.

How Rivermate handles compliant exits

We make sure that every termination complies with Monaco's labor laws. Our process ensures that you handle everything correctly, from start to finish.

Here’s how we help you manage employee exits:

• Clear Justification: We help you build a clear and objective reason for the termination, which is a legal requirement.
• Proper Notification: We handle the written notification to the employee, making sure it is delivered correctly.
• Respecting Notice Periods: We ensure you give the correct notice period based on the employee's service time.
• Calculating Severance: We calculate any severance pay the employee is entitled to, ensuring it is accurate.
• Avoiding Disputes: Our process is designed to minimize risks and avoid claims of wrongful dismissal. We guide you through each step to ensure a smooth and legal offboarding experience.

Navigating Monaco's visa and work permit system can seem complex. If you are not a citizen of the European Economic Area (EEA) or Switzerland, you will first need to secure a long-stay visa for France. This visa allows you to enter Monaco. Once you arrive, you must apply for a Monegasque residence permit, which allows you to live and work in the principality. The entire process is employer-led, meaning you need a job offer from a Monaco-based company before you can start the application.

Employment visas & sponsorship realities

An Employer of Record (EOR) can act as your legal employer in Monaco, sponsoring the necessary work and residence permits. This is a practical route if your company does not have a legal entity in Monaco, a process that can be time-consuming and expensive. An EOR handles the application process, from reviewing your eligibility to ensuring you can legally live and work in Monaco.

Here’s what you can expect:

• What an EOR can sponsor: An EOR can sponsor work permits for foreign employees, managing the entire process with the local authorities. They handle the employment contract, payroll, and ensure compliance with Monaco's labor laws.
• Practical routes: Using an EOR is a faster alternative to setting up a local company. The EOR becomes the legal employer, allowing you to onboard talent in days rather than months.
• What an EOR can't do: While an EOR simplifies the process, they still operate within Monaco's legal framework. The employer must demonstrate that no suitable candidate could be found on the local job market.

Business travel compliance

For short-term business visits, Monaco follows the Schengen Area rules. This means you can travel to Monaco without a visa for up to 90 days in any 180-day period for specific activities.

Permitted activities include:

• Attending business meetings
• Visiting family or friends
• Participating in cultural or sports events
• Short-term studies or training

For these short stays, you will need a valid passport. It is important to note that you cannot work in Monaco on a short-stay visa. If you plan to work, you must secure the proper work permit and residence permit before you start your employment.