- Overview: Estonia
- Global HR Compliance
- Global PEO and payroll
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global HR Compliance in Estonia
If you hire an international workforce, or plan to hire, then Hiring and Firing Workforce in Estonia Guide below will help you understand the nuances of labor legislation in the country.
When the company is planning to enter a new foreign market of Estonia and has a need to employ a local national there, the first question to answer is how it is going to make local hires.
We have designed a Global Employer of Record service to help you outsource global employment of your foreign workforce to companies like ours.
This solution helps you employ your global sales force in Estonia as well as in other 180+ countries of the world, and provide pay and benefits to your employees, as well as administer any business expenses with our help.
Our solution is different from other hiring modes in that it helps you engage your foreign workforce in full compliance with the local labor legislation. This means you are protected from any non-compliance and employee misclassification risks while we bear all employment risks, not you.
So, it looks very much like hiring your in-house sales force in your home country. However, you focus on only on your global business development while we admin your global HR. In addition, you don’t need to open your own entities in the foreign countries and can leverage our infrastructure in Estonia instead. With our service, you can become a global company with reduced costs and minimized time and effort on your end.
Your employed foreign sales force will devote 100% of their time to your company product and may stay with you longer than foreign independent sales reps.
Global Employer of Record solution is 100% compliant solution that guarantees you and your employees fully compliance with local legislation in Estonia .
We are experts in global workforce employment in Estonia, and our goal is to become your single provider. Instead of working with numerous local staffing agencies and legal advisors, Acumen International can solve your global business challenges and save you time, costs, and resources.
Our team of English-speaking professionals frees you from working through language nuances. Acumen International works 24/7 and can assist you whenever you need, regardless of time zones. Our goal is to create tailored labor solutions for you that are managed legally and in full compliance with the local employment laws.
With our knowledge and deep understanding of local nuances, you easily satisfy your need for skilled professionals in your global industry. With our qualified local partners, you can trust that your global workforce satisfies all local tax, social security, and immigration requirements in Estonia.
See Hiring and Firing Workforce in Estonia Guide below for a general overview of labor rules and regulations in the country. Or contact us if you need to employ workers in Estonia or would like to get more details.
Hiring and Firing Workforce in Estonia Guide
#1 – Contracts
An employer and employee may enter into an employment relationship in a definite or indefinite term. At the establishment of an employment relationship, an employer is required to draw up a contract, which must include the parties’ identities, date of entering into a contract, work commencement date and contract expiration date (for definite contract), nature of job, employee’s position and responsibilities, place of work, regular working time, remuneration, holidays and benefits, terms of contract termination and reference. An employer is obligated to draw up a written contract in duplicate – one for himself and one for the employee.
#2 – Minimum statutory employment rights
# Hours of work
The customary working time is 40 hours per workweek and 8 hours per workday. An employee may be allowed to work for lesser time per day/week after an agreement with the employer.
# Probation period
At the start of an employment, an employee is placed on probation to evaluate his fitness for the job he is employed to do. Regardless of the type of job, the maximum period of probation must not exceed 4 months. An employee on probation is entitled to all the employment benefits provided by law. An employee’s contract may be terminated during the probation period with a 15-day prior notice.
# Annual leave
Within any given year, an employee is entitled to take no fewer than 28 days of paid annual leave.
# Parental leave
Pregnant employees are entitled to take the last 70 days of their pregnancy as a maternity leave and 70 days maternity leave after childbirth. Altogether, women employees are entitled to 140 days maternity leave paid by the Health Insurance Fund (HIF) to women covered by health insurance as employed persons based on a certificate of maternity leave. In case of adoption a child under 10 years of age, an adoptive parent has the right for adopter’s leave. The leave can be taken within 70 days of the entry into force of the court ruling concerning the adoption. Male employees who are expecting new babies are entitled to 10 days of paid paternity leave which may be taken within the last 2 months before the child is born or within the first 2 months after childbirth. Working parents have the right to a maximum of 3 years parental leave. Only one person can take the leave at a time. Parental leave can be taken all at once or in parts at any time by notifying the employer of taking the leave 14 calendar days in advance, unless agreed otherwise by the parties.
Works performed during the non-working hours, on holidays and during night hours must be compensated at an overtime rate as follows: 150 percent of normal pay for overtime on normal working day, 125 percent of normal pay for work performed at night hours, and 200 percent of normal pay for work holidays. The parties may also agree on compensation for work done at night by granting additional time off. The working schedule together with overtime cannot exceed on average 48 hours per seven days over a calculation period of four months, unless a different calculation period has been provided by law.
# State minimum salary
Employees are entitled to a minimum salary of 470 EUR per work month. Employees pay may be calculated on a monthly, weekly, day-to-day or hourly basis, and must be paid at least once every month.
# Employment termination
Employees are entitled to receive 15 days prior notice if they have worked for less than one year in the company, 30 days’ notice if their years of work is between one and five years, 60 days’ notice if their years of work is between five and ten years, and 90 days’ notice if the number of their years of service is more than ten years. Upon an illegal termination of a contract of employment, an employer is obligated to compensate the employee with a sum that is equivalent to the amount of three months’ average wages of the employee. In the case of an employee who is pregnant, who has the right to pregnancy and maternity leave or who has been elected employees’ representative, the employer shall pay the employee compensation in the amount of six months’ average wages of the employee. Employers are obligated to compensate their employees if they fail to give the required prior notice. If an employer gives advance notice of cancellation later than provided by law or a collective agreement, the employee has the right to receive compensation to the extent to which he or she would have been entitled to upon adhering to the term for advance notice. If the employer wishes to terminate the employment contract with immediate effect, the employer may choose to remunerate the advance notice period in money.
Acumen International can help you fast-track your possibilities of entering and expanding your business in Estonia by providing you with our Employer of Record services. Our unique mix of PEO/EOR solutions will enable you to jumpstart your global operations almost immediately, cost-effectively and compliantly without any need to set up a legal entity first or afterwards.