What’s the difference between Europe, the EU and the Schengen Area

First, it’s important to define what we’re talking about -or rather where we’re talking about. Europe is the continent, encompassing around 44 countries, including non-EU members like the UK, Norway, and Switzerland.  

The Schengen Area is a group of 27 European countries that have abolished passport control at their borders. Not all Schengen members are EU members (e.g., Switzerland), and some EU countries (e.g., Ireland) are not in Schengen.  

The European Union (EU) is a political and economic union of 27 countries that collaborate on trade, legislation, and certain policies. Not all European countries are EU members (e.g., Norway). 

Work life balance in Europe

Many of the HR challenges to consider, when expanding into Europe relate to differing approaches to work life balance across the continent. In general, European employee benefits include mandatory provisions for paid vacation, sick leave, and healthcare.  

Many European countries, such as France and Sweden, offer over 25 days of vacation annually, and additional perks like life and health insurance are common. Another example is Switzerland’s approach to work hours and overtime prioritizing efficiency and ensuring employees receive sufficient breaks. 

These benefits reflect Europe’s cultural priority on work-life balance, with employees working significantly fewer hours compared to other regions. According to the International Labor Organization, European workers average 37.9 hours per week, nearly 10 hours less than their counterparts in Asia-Pacific. This focus on balance makes Europe highly attractive to talent seeking greater flexibility and quality of life. 

But it has created something of a work life balance arms race in Europe. Some companies are offering increasing benefits to stand out, attract and retain top talent. This includes enhanced packages, such as wellness programs and opportunities for personal development.  

Employees often have specific expectations. Spain is an interesting case in point. Many Spanish businesses and public institutions adopt a summer schedule, known as "jornada intensiva” during the hottest months of the year - usually from June to September. Employees work shorter, concentrated hours, often from 8AM to 3PM, without a lengthy lunch break.  

The reduced hours align with Spain’s social and cultural practices of late-night activities, as the evenings are cooler and more conducive to socializing. It’s particularly common in government offices and schools, though not as widely practiced in the private sector.  

For its part, France introduced the Aubry Laws in 1998 and 2000. These established a 35-hour maximum working week for employees working in firms with more than twenty employees. Many workers, however, work longer hours and earn compensation through paid overtime or additional days off. Various sectors have negotiated collective labor agreements (CLA) that allow for flexibility, often through arrangements like RTT (Réduction du Temps de Travail), which grants extra leave for hours worked beyond 35. 

In comparison, U.S. employers focus more on mental health benefits due to rising burnout rates. A 2024 report by Littler reveals that 74% of US employers have experienced a rise in requests for mental health accommodations or leaves within the past year.  

This reflects the greater stress tied to the longer working hours and less structured boundaries in American work culture. As a result, many U.S. workers, particularly Gen Z, are drawn to Europe’s more balanced approach. 

Are there additional payroll months in Europe?

Some European countries have 13th and 14th month payroll methods. These are extra salary payments mandated around the holiday season or mid-year. These payments are meant to provide workers with additional income beyond their standard monthly wages, often tied to either bonuses or legally required salary structures.  

In many European countries, employees benefit from additional salary payments beyond their regular monthly wages: 

• Italy: Payroll frequency in Italy contemplates a 13th-month salary (tredicesima) at the end of the year, and in some sectors, a 14th-month salary (quattordicesima) during the summer, depending on company agreements. 

• Portugal: A legally required 13th-month salary is typically paid in December, with some industries also offering a 14th-month salary during the summer. 

• Spain: Workers typically receive a 13th-month salary as part of their Christmas bonus, and some employers provide a 14th-month payment in July, particularly in industries governed by collective agreements. 

• Lithuania: The Lithuanian payroll frequency establishes that employers must pay salaries at least twice a month, with an option for employees to a monthly schedule.  

Social security regulations in Europe vary by country. However, they often include comprehensive mandatory benefits like health insurance, retirement plans, disability protection, and sick leave.  

For example, workers in Luxembourg are entitled to full salary during sick leave for up to 77 days, while the Netherlands requires a holiday allowance of at least 8% of salary. Countries also offer additional protections, such as France’s “right to disconnect” law, which prohibits employers from contacting workers outside of work hours. 

What considerations are there around hiring and firing in Europe?

The process of hiring talent in Europe differs from other regions. Job ads are governed by strong non-discrimination laws. Under the EU Employment Equality Directive, it is illegal to discriminate based on age, gender, sexual orientation, disability, religion, or ethnicity in job ads.  

Employers must ensure that job descriptions and requirements are neutral, focusing only on qualifications and experience, without implying bias or preference toward any protected characteristic. In many countries like Germany and France, stricter national laws apply.  

And once employees are hired, they have strong protection. Articles 45–48 of the Treaty on the Functioning of the European Union state that workers have the right to move freely and work anywhere in the EU, without discrimination on grounds of nationality, subject to exceptions to preserve public policy, security and health.  

Plus European labour laws require just cause for termination, such as poor performance or misconduct, and mandate advance notice periods – which range from one to three months, depending on tenure. Additionally, severance pay is often legally required and employees may have the right to challenge dismissals through labour courts or arbitration. 

Is Remote working common in Europe? 

Remote and hybrid working is clearly a hot topic for all international companies. In Europe, the approach to distributed teams often differs from other regions. Several European countries offer work-from-home benefits as part of broader labour rights or in responses to the evolving nature of work.  

Across Europe, work-from-home benefits generally include access to flexible schedules, coverage of equipment costs, and support for balancing personal and professional life, making remote work a formalized and supported option for many employees. 

In Germany, for example, legislation supports remote work under certain conditions, especially since the pandemic. German employees have the right to request flexible working arrangements, including home office options. The country also ensures that employers provide necessary equipment or cover expenses related to working from home.  

Similarly, the Netherlands has strong legal frameworks in place. Dutch workers have the right to request remote work, and companies are encouraged to accommodate such requests unless there are valid reasons to decline. France also offers flexible work arrangements under a legal framework known as "teletravail," where employees can work from home if both parties agree, with certain rules in place about work hours and reimbursement for home office-related costs, such as internet and equipment.  

Other countries, such as Belgium and Luxembourg, have embraced remote work with similar regulations, often stipulating that employers need to contribute to home office expenses.  

Atlas helps companies expand into Europe

The result is that Europe can’t be seen as a single entity. It may be a single market, but it’s a complex patchwork of directives, regulation, local legislation and languages. Any company looking to expand into Europe needs a trusted adviser - a partner that knows the legislative and cultural nuances of setting up and which has helped others set up operations in Amsterdam or Antwerp, Lisbon or London, Dublin or Dubrovnik.  

Atlas is that partner.