Navigating Greek Labor Laws: A Comprehensive Guide for Foreign Businesses

Reading time: 12 minutes

Table of Contents

• Introduction: The Greek Employment Landscape
• Legal Framework for Employment in Greece
• The Hiring Process: Step-by-Step
• Employment Contracts and Terms
• Compliance Requirements for Foreign Businesses
• Understanding Employment Costs
• Common Challenges and Solutions
• Remote Work and Digital Nomad Considerations
• Your Greek Employment Strategy: Building for Success
• Frequently Asked Questions

Introduction: The Greek Employment Landscape

Thinking of expanding your business operations to Greece? You’re eyeing a market with unique opportunities—and equally unique regulatory considerations. Greece’s position as a gateway between Eastern and Western markets makes it strategically valuable, but navigating its labor framework requires precision and local insight.

The Greek employment landscape has undergone significant transformation following the economic crisis of 2009-2018. Many labor regulations were reformed to create a more flexible market, but the country still maintains strong worker protections compared to other investment destinations.

Here’s the straight talk: successful business entry into Greece isn’t about finding loopholes—it’s about strategic compliance that turns potential administrative hurdles into operational advantages.

“Greece offers a highly educated workforce with competitive wage structures compared to Western Europe, but foreign employers must navigate a regulatory environment that strongly favors employee rights,” notes Maria Papadopoulou, Employment Law Specialist at Athens Business Advisors.

Legal Framework for Employment in Greece

The Greek employment legal framework stems from multiple sources that foreign employers must understand before making their first hire:

• The Greek Civil Code – Forms the foundation of employment relationships
• Law 1876/1990 – Governs collective bargaining agreements
• Law 3863/2010 and subsequent amendments – Modernized labor regulations following economic reforms
• EU Directives – Incorporated into national law on issues like working time, equality, and health & safety

Key Regulatory Bodies

When establishing employment operations in Greece, you’ll interact with several governmental bodies:

• Ministry of Labor and Social Affairs (Υπουργείο Εργασίας και Κοινωνικών Υποθέσεων) – The primary regulatory authority for employment matters
• ERGANI System – The electronic registry where all hiring, terminations, and changes to employment terms must be registered
• EFKA (Ενιαίος Φορέας Κοινωνικής Ασφάλισης) – The unified social security institution handling all social contributions
• Greek Labor Inspectorate (ΣΕΠΕ) – Responsible for ensuring compliance with labor laws

Foreign Business Registration Requirements

Before you can hire employees in Greece, your business must establish a legal presence. This typically requires:

• Registration with the General Commercial Registry (Γ.Ε.ΜΗ.)
• Tax registration and obtaining a Greek tax number (AFM)
• Registration with the relevant social security authorities

For non-EU entrepreneurs, obtaining a passport of greece or residency permit might be beneficial for long-term business operations, as it provides more flexibility in managing your Greek entity.

The Hiring Process: Step-by-Step

Let’s walk through the practical steps of bringing Greek talent into your organization:

1. Define position requirements – Clearly articulate role responsibilities and qualifications
2. Draft compliant job descriptions – Ensure non-discriminatory language and clarity on terms
3. Post positions through appropriate channels – Job boards, recruitment agencies, OAED (Greek Manpower Employment Organization)
4. Conduct interviews and assessments – Following Greek privacy and anti-discrimination laws
5. Make a formal offer – Including all mandatory terms and conditions
6. Register the hire in ERGANI – Mandatory electronic notification before employment starts
7. Complete social security registration – Register the employee with EFKA

Quick scenario: Imagine you’re launching a tech subsidiary in Athens. Beyond the standard hiring process, you’ll need to consider specialized work permit requirements for non-EU tech specialists, potential R&D incentives that might affect compensation structures, and specific collective agreements that might apply to IT professionals.

Employment Contracts and Terms

Contract Types and Legal Requirements

Greek employment relationships can be structured in various ways:

• Indefinite-term contracts – The default and most common arrangement, with no specified end date
• Fixed-term contracts – Limited to specific circumstances and maximum durations (generally cannot exceed 3 years or be renewed more than 3 times)
• Part-time employment – Must include specific terms regarding hours and compensation
• Seasonal employment – Common in tourism and agriculture, with specific rules

All employment contracts must include, at minimum:

• Identification of both parties
• Workplace location
• Position and job description
• Start date and contract duration (for fixed-term contracts)
• Paid leave entitlements
• Notice periods for termination
• Base salary and payment details
• Working hours

Working Hours and Leave Entitlements

Greek labor law establishes clear parameters around working time:

• Standard working week: 40 hours (typically 8 hours per day, 5 days per week)
• Maximum working day: Generally cannot exceed 10 hours
• Overtime limitations: Strict rules with premium pay requirements (first 5 hours at 120%, next 120 hours annually at 140%, additional hours at 160%)
• Annual leave: Starts at 20 working days (for 5-day week) and increases with tenure
• Public holidays: 14 days annually, with mandatory paid time off
• Maternity leave: 17 weeks total (8 before birth, 9 after), with job protection
• Paternity leave: 14 days, with the first 2 days fully paid by the employer

Compliance Requirements for Foreign Businesses

Ongoing Employer Obligations

Once you’ve established employment relationships in Greece, several ongoing compliance requirements must be maintained:

• Monthly social security declarations – Analytical Periodic Declaration (APD) due by the end of each month
• Payroll tax withholding – Calculated based on progressive tax scales
• Annual leave planning – Required by law to be submitted at the beginning of the year
• Workplace health and safety measures – Including required risk assessments and medical officer appointments
• ERGANI reporting – Any changes to employment terms, overtime, etc.

Work Permits for Non-EU Nationals

If you’re planning to relocate employees from outside the EU:

• Work permits must generally be secured before the employee enters Greece
• The process involves multiple authorities (Greek Consulate, Decentralized Administration, etc.)
• Special provisions exist for highly-skilled workers under EU Blue Card regulations
• Recent digital nomad visa options provide alternatives for remote workers

Case study: When FinTech startup NordPay expanded to Athens in 2022, they encountered unexpected delays because they didn’t account for Greece’s “labor market test” requirement before bringing in specialized developers from Ukraine. The process required proving that no suitable candidates were available in the Greek or EU labor market – adding three months to their launch timeline. Lesson learned: start immigration procedures well before your planned operational launch.

Understanding Employment Costs

Salary Benchmarks and Expectations

Understanding the true cost of employment in Greece requires looking beyond base salaries:

Mandatory and Common Additional Benefits

Greek employment costs extend beyond monthly salaries:

• Mandatory 13th and 14th month payments – Christmas bonus (full month), Easter bonus (half month), and vacation bonus (half month)
• Severance pay provisions – Accruing based on length of service
• Meal vouchers – While not mandatory, they’re common and enjoy favorable tax treatment
• Private health insurance – Increasingly offered as a supplement to national healthcare
• Transportation allowances – Common in urban centers

Comparative Employment Costs Visualization

How do Greek employment costs compare to other European destinations?

Common Challenges and Solutions

Termination Complexities

Perhaps the most significant challenge for foreign employers is navigating Greek termination requirements:

• Challenge: Termination without “valid reason” can be declared abusive by courts
• Solution: Maintain detailed performance documentation and follow progressive discipline practices

• Challenge: Severance calculations are complex and based on tenure and contract type
• Solution: Budget for severance liabilities from the start of employment relationships

Case example: When MetaTech downsized their Athens operations in 2021, they based severance calculations on their home country standards rather than Greek requirements. The error resulted in a class action lawsuit and settlements exceeding €450,000 – nearly triple what proper compliance would have cost initially.

Administrative Burden Management

The Greek employment system involves substantial paperwork and reporting:

• Challenge: ERGANI system reporting requirements are strict, with penalties for missing deadlines
• Solution: Implement automated compliance calendars or work with specialized Greek employment service providers

• Challenge: Changing employment terms requires formal documentation and registration
• Solution: Build flexibility into initial contracts and utilize specialist employment counsel for major changes

Remote Work and Digital Nomad Considerations

The COVID-19 pandemic and subsequent legislative changes have transformed remote work possibilities in Greece:

Legal Framework for Remote Employment

Law 4808/2021 established Greece’s first comprehensive teleworking framework, requiring:

• Written remote work agreements specifying work hours and availability
• Employer provision or reimbursement of equipment costs
• Data protection and connectivity provisions
• Right to disconnect protections

For businesses considering a remote-first approach in Greece, this framework offers clear guidelines but requires careful implementation.

Digital Nomad Visa Opportunity

Greece’s digital nomad visa program, launched in 2021, offers interesting possibilities for foreign companies:

• Allows remote workers to legally reside in Greece while working for foreign employers
• Provides tax incentives including 50% income tax reduction for the first 7 years
• Requires proof of minimum monthly income (€3,500)

This program can be strategically utilized by foreign companies wanting to maintain employees in Greece without establishing a full local entity – though careful structuring is required to avoid permanent establishment risk.

Your Greek Employment Strategy: Building for Success

Establishing and maintaining employment relationships in Greece doesn’t have to be overwhelming. Here’s your roadmap for navigating Greek employment with confidence:

1. Conduct a strategic compliance assessment
   • Map your specific business needs against Greek employment requirements
   • Determine your optimal entity structure based on hiring volume and investment timeline
   • Build comprehensive compliance calendars with all reporting deadlines
2. Establish your administrative foundation
   • Engage specialized Greek employment counsel before your first hire
   • Implement compliant contract templates and policies from day one
   • Set up proper payroll and contribution systems with local expertise
3. Adopt a proactive management approach
   • Train managers on documentation requirements and performance management protocols
   • Build engagement strategies that align with Greek workplace expectations
   • Monitor regulatory changes through industry associations or advisors

Remember, the Greek employment landscape rewards strategic thinking. The most successful foreign employers in Greece aren’t those who view compliance as a burden, but those who recognize that understanding the system enables more effective talent acquisition and management.

How might your business leverage Greece’s educated workforce and strategic location while navigating its regulatory framework? The balance between compliance and operational flexibility ultimately becomes a competitive advantage when approached strategically.

Frequently Asked Questions

What are the main differences between hiring employees versus contractors in Greece?

Hiring employees in Greece involves significant compliance requirements including mandatory social security contributions, adherence to collective agreements, termination protections, and paid leave entitlements. Independent contractors, while seemingly simpler, carry substantial misclassification risks as Greek authorities and courts are increasingly scrutinizing these relationships. The key determining factors include work schedule control, integration into the company, exclusivity, and use of company tools. Misclassification penalties can include retroactive social contributions plus penalties of up to 150% of unpaid amounts. For foreign businesses, a properly structured employment relationship typically offers greater legal certainty despite higher initial administrative requirements.

How difficult is it to terminate employees in Greece compared to other EU countries?

Greece has one of Europe’s more protective employment termination frameworks. Unlike countries such as Denmark or Ireland where at-will employment concepts exist, Greek terminations require “valid reason” (performance issues, business necessity, etc.) with substantial documentation. Severance requirements scale with tenure, reaching up to 12 months’ salary for long-term employees. Notice periods range from one week to six months based on length of service. What makes Greece particularly challenging is the judicial interpretation – Greek courts frequently rule in favor of employees in disputed terminations, potentially ordering reinstatement and back pay. Strategic approaches include robust performance documentation, consideration of mutual separation agreements, and proper budgeting for severance costs.

What payroll and tax withholding obligations apply to foreign companies with Greek employees?

Foreign companies employing staff in Greece must register for Greek payroll tax withholding and remit employee income tax according to progressive tax brackets (currently ranging from 9% to 44%). Monthly withholding declarations must be filed electronically by the 20th of the following month, with quarterly reconciliations. Social security contributions (currently 24.81% employer portion, 14.12% employee portion) must be calculated, withheld, and remitted monthly through the Analytical Periodic Declaration system. Additionally, employers must issue detailed monthly pay statements, provide annual income certificates to employees by February, and submit annual reporting to tax authorities. Many foreign companies engage specialized Greek payroll providers to ensure compliance with these technical requirements and frequent regulatory changes.

Article reviewed by Anna Mayer, Residential Property Investment Advisor | Luxury Market Specialist, on May 5, 2025