Hiring globally is a common practice for growing companies. While you may hire full-time employees in Greece, you can also count on independent contractors to help complete specialized projects. Contractors operate differently than employees, but they may be a wise choice depending on your company’s needs.
Hiring contractors in Greece
Hiring a contractor may be an ideal decision for your company; however, it’s essential to understand the designation and how to sidestep associated risks.
Independent contractors vs. full-time employees
The distinction between full-time employees and contractors depends primarily on the level of control the company has in the relationship.
Full-time employees sign a contract of dependent services. This type of contract means the employee provides services for a salary and maintains legal and personal dependence on the employer. The employer has the right to give binding directions and commands about working hours, location, and the manner in which work is completed.
Independent contractors sign a contract for the provision of liberal services. They have complete freedom in when they work and how they complete the defined project. Contractors do not have legal dependence on employers, acting as separate entities from the companies they provide services to.
Penalties for misclassification
Employers may define a full-time employee as an independent contractor erroneously. However, this can lead to penalties such as fines and requirements to officially hire these individuals as full-time employees. This act will require employers to provide social security benefits, paid leave, and other benefits.
How to hire independent contractors in Greece
The hiring process for contractors includes 3 key steps.
1. Carefully conduct interviews.
A company’s approach to interviews can help create a clear boundary with independent contractors. Since companies have limited control in a relationship with an independent contractor, it’s best practice to avoid any questions regarding character traits and contributions to company culture.
It is important to clarify your need for the specified service by focusing questions on skills and experience. This approach will make the interviews feel more like the business transactions they are.
2. Create a service agreement.
As the law states, companies must create a contract for the provision of liberal services. This service agreement should detail the conditions of the contractor relationship, including:
- Scope of the project.
- The definition of a completed project.
- Pay rate and arrangements.
- Termination requirements or policies.
3. Introduce necessities.
Training and onboarding can signal employer control. To keep the contractor designation clear, only introduce necessities for the project. These may include important points of contact or workflows the contractor will contribute to.
How to pay independent contractors in Greece
Contractors are not subject to minimum wage laws and typically set their own rates. The service agreement should define the pay rate and schedule. Contractors may have various payment requirements depending on the service they provide, such as equal installments or down payments.
Employers are not required to deduct income tax or social security contributions from these payments.
Terminating independent contractors
Contractors are not covered by standard termination laws included in the labor code, so your service agreement should outline any termination policies and requirements. These details can include reasonable cause for dismissal, notice periods, and payment obligations.
Turn to G-P when hiring independent contractors in Greece.
As a part of our #1 suite of global employment products, G-P Meridian Contractor™ allows companies to hire and pay global contractors faster, with self-service workflows and a wide set of flexible payment options. Whether you’re hiring employees or contractors, our platform streamlines the process with a single solution for your global workforce.
Contact us to learn more.