Monaco PEO & Employer of Record

WeHG provides an International PEO and global Employer of Record service in Monaco to companies willing to enter the Monaco market or hire local/expat employees in this country.

Traditional approach requires establishing a subsidiary in Monaco.  However our solution allows you to start the operations in Monaco within days hence save time and money.  WeHG would hire candidates on your behalf while you maintain full operational control of their work. So legally they would be our employees, on our local payroll, 100% compliant but will work on your behalf. 

Monaco fast facts

Population, million: 0,03

Land area, sq. km: 2.1 km2

Capital: Monaco

Local currency: EUR

Monaco, officially Principality of Monaco, French Principauté de Monaco, sovereign principality located along the Mediterranean Sea in the midst of the resort area of the Côte d’Azur (French Riviera). The city of Nice, France, lies 9 miles (15 km) to the west, the Italian border 5 miles (8 km) to the east. Monaco’s tiny territory occupies a set of densely clustered hills and a headland that looks southward over the Mediterranean. Many unusual features, however, have made Monaco among the most luxurious tourist resorts in the world and have given it a fame far exceeding its size.

Legislative power is shared by the prince and the National Council. Since 1819 the judicial system has been based on that of France.

Hiring, Negotiating and Doing Business in Monaco

Necessity of written employment contract

Monaco labor laws do not require an employment contract between the employer and the worker. However, employees must obtain a work permit to be legally hired. The country deals with collective agreements more than employment contracts.

When you work as an employer, you may negotiate with labor unions to define employment terms. There may already be collective agreements in place for your industry.

Monaco Employment Contract

Types of employment agreements

Permanent contract (CDI). This type of contract is for a non-specific duration. It can be ended by one or other party along the terms included in the contract, which must be in writing.

One major difference between Monegasque and French permanent contracts is that it is easier to be made redundant in Monaco. Article 6 of the Code du Travail states that an employer can make a person redundant without giving any reason as long as the notice period is respected. Not respecting the notice period obliges the responsible party to pay an indemnity to the other.

Fixed-term contract (CDD). This type of contract may be used only for carrying out a specific, temporary task, such as to replace an employee who is on maternity leave, or for seasonal work.

Monaco working hours

The standard workweek is 39 hours, and a person can work up to 47 hours a week with overtime pay for all time beyond the statutory hours. Employees can work 10 hours a day maximum, even with overtime, and can only exceed that limit with authorization from the Labor Inspector.

Employees receive a 25% wage increase for the first 8 hours of overtime and a 50% increase for subsequent hours. If an employee is scheduled to work two 10 hours shifts consecutively, they must have at least 10 hours of rest between shifts.

Vacation leave in Monaco

Employees can accumulate paid time off after working with an employer for a month. They earn 2.5 days of leave each month of employment, and they can accumulate up to 30 days a year. The days received each month increase once an employee works for a certain amount of time. These increases are as follows:

• At 20 years, 4.5 days per month
• At 25 years, 6.5 days per month
• At 30 years, 8.5 days per month

Sick leave: 

In Monaco, there are no general laws regarding the amount of sick leave an employee receives or if these days are paid. Sick leave for any reason should not be considered vacation leave. Collective agreements may describe any other sick day terms.

Monaco Maternity Leave

Maternity leave varies based on how many children a person has. For the first and second birth, a mother will receive eight weeks before and eight weeks after the pregnancy. It is illegal to work two weeks before giving birth and six weeks after.

For the third birth and anything more, mothers receive 26 weeks total, and they can choose between two arrangements — eight weeks before and 18 weeks after, or 10 weeks before and 16 weeks after. Extra weeks are added to account for caring for other children after delivery.

Monaco Severance Laws

Dismissal without stating grounds

The law provides that permanent contracts can always be terminated by either party willingly. The termination shall take effect at the end of the notice period. In this event, the employer does not have to give any reasons.

However, the employer must not abuse this unilateral termination option.

Thus, the Case-Law considers that the employer cannot dismiss without stating grounds to conceal unlawful reasons (discrimination) or to deny Laws of public order, and specifically:

• Those relating to redundancies (see question 2);
• Those relating to the protection of certain employees (see question 10).

Finally, the Case-law considers that the employer must respect the employee’s rights and the circumstances of the termination must not be wrongful (see question 7).

Dismissal with a valid reason

Permanent contracts can also be terminated on real grounds such as, without being exhaustive:

• disciplinary reasons;
• professional incompetence;
• physical unfitness;
• economic grounds.

Notice period 

The basic statutory notice is, except in cases of gross misconduct: 

• One month after six months’ service; 
• Two months after two years’ service. 

Monaco Tax

Personal Income Tax 

Since 1869, Monaco has not levied a personal income tax on its residents.

To be considered a resident, one must intend to stay longer than three months in a year.

Social Security contributions

Social insurance contributions payable by employers and employees are high. The employer’s contribution is between 28%-40% (averaging 35%) of gross salary including benefits and the employee pays a further 10%-14% (averaging 13%).

An employee who is paid part of his wage by way of stock options which can be cashed in and sold at a future point in time may be required to pay social insurance on the value of the option at the time it is realized as if the option had been a salary.

Social insurance contributions, amounting to nearly 50% of salary, are a major disincentive to the hiring of staff and in many ways detract substantially from the advantageous income tax regime which exists in Monaco.

The Principality has concluded social security agreements with France and Italy for retirement and medical expense coverage.

Additional Benefits in Monaco

Employment laws do not outline any required benefits or bonuses, though these terms may change depending on collective agreements.

Monaco Holidays

• New Year’s Day
• Saint Dévote’s Day
• Corpus Christi
• May 1st
• Ascension
• Easter Monday
• The Prince’s Day
• Assumption
• Whit Monday
• All Saints’ Day
• Christmas Day
• The Immaculate Conception

Why Choose WeHireGlobally

WeHG takes care of all the onboarding hurdles, payroll, compensation and benefits, tax filing, and termination of employment. Our Employer of Record solution allows you to manage your overseas teams efficiently while minimizing cost and risk.