The multiple employer’s framework provides a practical solution aligned with the operational realities of corporate groups. It facilitates workforce mobility and supports evolving organisational needs, such as peak workloads, restructuring initiatives, and the efficient allocation of human resources. A key advantage lies in the ability to share labour costs across entities, avoiding duplication of roles and unnecessary hiring.
Generally, this regime allows an employee to provide services to several employing entities, provided that these entities are linked either through a corporate relationship (e.g. shareholdings, control or group structures) or through by organisational resources, such as premises, equipment or technical infrastructure.
Its implementation is, however, subject to compliance with specific legal requirements, including:
- The execution of a written employment contract or contractual amendment expressly providing for the employee’s activity in favour of more than one employer; and
- The inclusion of key elements, such as the identification of the parties, the employee’s duties, place of work and working time, as well as the designation of the employer acting on behalf of the others.
A central feature of this framework is the appointment of a “lead employer”, which must be clearly identified in the agreement. This entity will typically assume primary responsibilities, including:
- Acting as the main point of contact with the employee;
- Coordinating with external stakeholders (such as social security authorities, occupational risk insurers, health and safety providers, and labour inspectorates);
- Ensuring compliance with payroll, tax and social security obligations.
From a legal perspective, this structure presupposes that the employee is subject to the authority of each employer and may receive instructions from all of them. Importantly, all entities involved are jointly and severally liable for the obligations arising from the employment relationship.
In practice, however, a single entity—usually the lead employer—will handle salary payments and administrative obligations, including tax reporting, social security filings, and insurance coverage. Internally, the entities may allocate costs between themselves through agreed mechanisms.
Operationally, the framework often formalises an existing reality: employees who, although formally employed by one entity, regularly support other companies within the same group or organisations sharing infrastructure. By structuring these arrangements appropriately, companies can enhance transparency, ensure regulatory compliance, and mitigate legal risks—particularly the risk of such situations being reclassified as unlawful employee secondment or labour leasing.
It should also be noted that failure to meet the applicable legal requirements—whether formal or substantive—may grant the employee the right to elect the employing entity to which they wish to be contractually bound, potentially leading to significant legal and operational implications.
Against this background, companies should consider implementing this framework wherever employees operate across multiple entities, as a means of ensuring proper legal alignment and a clear allocation of employer responsibilities.
The Employment Law Department of Belzuz Abogados, S.L.P. – Sucursal em Portugal has extensive experience advising international and domestic clients on workforce structuring and is available to assist in the design and implementation of tailored solutions aligned with business needs.