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The Glossary

Hiring-out

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Hiring out involves the total or partial transfer of employer authority to a third party. The service provided is essentially sending an employee to work under the direction of a third party.

While the employment contract remains with the Sending company, the employee works under the control and direction of the Receiving company (the Recipient).


Depending on the details of the agreements between the parties involved and the actual circumstances, the legal relationship between the Employee and the Recipient can be

  • formal employment: there is a formal employment contract;

  • material employment: there is a relation of authority.



Background

Caution


Misclassification

The distinction between subcontracting and hiring out is crucial because different rules apply to each scenario. Additionally, hiring out may require licenses or registration in the host member state and often has time limitations.


For example, if a company sends welders and gets paid per welder per hour regardless of project completion, it's hiring out, not subcontracting.


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