1. Employment OR self employment ? Which are your goals as employer ?

In many foreign countries, but especially in the European Community, it is frequent to have a clear legislation distinguishing employment and self employment work.
The choice might appear difficult, but in reality checking more carefully the applicable legislation, it becomes rather clear that the choice between the two kind of work is driven from the goals and often from the propension to enterprise risk of each company.
Goals can be in reality of two kinds :

A. Need to have a worker responding fully and directly to a manager, action by action, or in partial autonomy as a manager, but anyway driven by specific guidelines, compelled to respect company service orders, subject to disciplinary procedures in case of lack of or partial fulfilment, compelled to respect fixed and approved work time schedules, often including overtime, shifts, absences etc. ; owner of a business card on employer’s name; hardly final responsibility in case of mistakes. This is a promise to supply an activity.
B. Need to have a free lancer/ contractor GRANTING for agreed goals under his/her own full responsibility, responsible to repay damages in case of mistakes, freedom of working hours, no overtime, no justification need for absences, no holidays but only agreed absences, unpaid during holidays, owner of a business card on his/ her own name, sometimes simply as Commercial Agent of the employer company. This is a promise of result.

2. Are there cost differences ? Other advantages for an employer having a self employee ?

Yes, usually social contribution for self employees, agents, contractors is lighter than for an employment contract, and there is also usually more flexibility, concerning possibility of termination, with or without proper justification of the employer decision. This means often lighter damage allowances, notice periods, incentives to convince the worker to resolve the employment contract.
Often employment, but sometimes also self employment contracts, are protected by activity area or geographical collective agreements, approved by Labour and Company Unions, different depending from country to country.

3. What is happening in case of a self employee claim to become an employee or in case of inspections ?

Usually social contribution for an employment contract is the biggest risk and cost the employer is subject to, with related expensive penalties in case of inspection or spontaneous claims of the self employee by the public employment offices. Inspections do apply penalties also retroactively, in compliance with hiring dates and prescription periods legally applicable country by country.

4. Is the possible risk worth ?

Usually the risk to run is NOT advisable according to the weight of the penalties, but often minor employers do not have abundant economic resources, and sometimes the real choice is between staying on the market accepting a risk or disappearing from the market.

5. How can an employment contract be agreed in the cheapest way ?

There are several solutions usually (also if these are not miracles) to enlighten employment contracts costs, but in order to apply these in the best way, it is by sure necessary a careful planning and a good competence about labour law, social contributions law and some luck and time to find the right people on the recruitment market.
Not every body is aware in fact that in some countries, despite the massive presence of National Collective Agreements and strong Labour Unions, it is still possible to avoid applying a National Collective Agreement for an employer, choosing to apply only the law.
Often expenses reimbursements and some benefits, are offering tax and social contribution free amounts (totally or in part), in order to encourage the diffusion of such instruments among all employees levels.
Some other cases are instead allowing social contribution relieves in case of disables, unemployed, apprenticeship or anyway disadvantaged workers, and such advantages have a short medium term duration usually.