Summary record of the third session of the Team Council

Meeting details

Agenda

1. Opening remarks and purpose of the session.
2. Review of Team Council evidence received to date and the First Ten Hires cost diary.
3. Discussion of hiring costs, payroll registration and predictable employment rules.
4. Consideration of OECD Taxing Wages 2026 findings and the Council’s 20 April letter to the OECD Centre for Tax Policy and Administration.
5. Evidence gaps, work assignments and date of the next session.

Summary of proceedings

1. Nikola Jurić opened the session and welcomed members joining the Asia-Pacific sitting at 06:00 UTC and the Europe/Africa/Americas sitting at 16:00 UTC. He stated that the two sittings formed one Council session and that attendance would be counted across them, without double-counting members who participated in both. The purpose was to review the evidence then available, identify what further evidence was needed and agree practical work for the coming month. He reminded participants that the Council was examining recurring practices and policy arrangements, not assessing individual employers.

2. Jurić recalled the agenda item established by the call for evidence, RC/TM/2026/1, and the Council’s focus on the first ten hires. The work concerned the combined burden of employment contributions, registration and administration, and the uncertainty small employers face when estimating the cost of taking on staff. The Council had not yet developed or approved a standard. He asked speakers to distinguish documented costs from proposed remedies and to avoid treating a single report as proof of a general pattern.

3. Amina Rahman of Dhaka, Bangladesh, described the difficulty of estimating the full cost of a first formal hire when payroll contributions and administrative requirements were not presented together. She said that an employer comparing a proposed wage with the total outlay needed a clear, early estimate rather than a set of amounts revealed at different stages. Rahman supported collecting information about the point at which a hiring decision changed, while recording the relevant jurisdiction and type of cost so that comparisons would not collapse unlike systems into one figure.

4. Haruto Sato of Osaka, Japan, addressed predictability. He observed that a small employer could plan for a known charge more readily than for a charge whose application or timing was unclear. Sato urged the Council to ask members to record when they first learned the amount due, whether the estimate changed before the employee started work and how much time was required to complete registration. He cautioned that a simplified process should not be described as a reduction in the legal protections owed to workers.

5. Litia Vakalalabure of Suva, Fiji, spoke to the proposed First Ten Hires cost diary. She recommended a short, repeatable record rather than a lengthy narrative: the planned hire, the stage reached, the type of cost encountered and whether the hire proceeded. She said that recording decisions not to hire was important because the evidence otherwise risked covering only employers who had already managed to recruit. Vakalalabure also supported providing a way to report a hiring attempt that ended before payroll registration.

6. Marta Kowalska of Kraków, Poland, discussed the need to separate one-time registration work from recurring employment costs. She said that combining them could make the first hire appear to have the same cost profile as later hires, even where the administrative effort was concentrated at the beginning. Kowalska proposed that the comparison work show the point at which each cost arises and whether it repeats. She asked that members be able to identify uncertainty or inability to calculate a cost, rather than being required to supply a precise amount.

7. Chinedu Okafor of Enugu, Nigeria, considered the relationship between formal hiring costs and informality. He said that the Council should investigate whether confusing or hard-to-anticipate requirements make formal employment less feasible for very small employers. He did not suggest that cost alone explained informal work, and urged the Council to treat formalization as a matter involving both understandable rules and access to practical registration. The ILO estimates that MSMEs account for about 70 per cent of employment worldwide and that about 80 per cent operate in the informal economy.¹

8. Lucía Fernández of Córdoba, Argentina, asked that the cost comparison avoid presenting one national system as a universal model. She said that wages, contribution bases, benefits and the timing of payment differ, so an apparently simple cross-country ranking could mislead. Fernández supported a common description of cost categories and a separate account of national rules. She also asked that the Council record the size of the employer, since the experience of a business with no employees may differ from that of one already employing a team.

9. Daniel Mensah of Accra, Ghana, supported collecting evidence on the full registration journey, not only the amount payable. He said that steps spread across multiple offices or systems could consume time that a small employer needed for operating the business. Mensah proposed asking members to record the number and sequence of steps they encountered, where known, while making clear that the Council’s comparison would not treat administrative time as a cash charge. He asked that any future recommendation be concise enough for a first-time employer to use.

10. Sofia Almeida of Porto, Portugal, addressed the OECD findings and the Council’s letter of 20 April, RC/TM/2026/21. She considered the tax-wedge figures useful for placing national employment costs in context, but cautioned that a tax wedge does not by itself describe the cash flow or compliance burden of a small employer. The OECD reported an average tax wedge of 35.1 per cent across OECD countries in 2025; its country figures included 49.3 per cent for Germany, 47.2 per cent for France and 20.8 per cent for New Zealand.² Almeida supported explaining both the use and the limits of those figures in Council materials.

11. Ravi Nair of Kochi, India, referred to the Council’s earlier public letter, RC/TM/2026/20, on the cost of hiring a first employee. He said that a useful evidence record should help members describe what happened without requiring them to publish the identity of their business. He supported the Assembly’s practice of keeping members anonymous unless they choose a public seat, and asked that cases be presented in aggregated or otherwise non-identifying form. He also proposed that members be asked whether a cost was known before the hiring decision or became clear only after an application or registration step.

12. Camila Torres of Medellín, Colombia, commented on the available Team Council figures. As of 26 April, the Council had 31 members from 19 countries and had received 16 reports from 7 countries. All 16 reports concerned hiring costs; the median amount at stake was approximately US$5,120. Torres noted that the current evidence base was small and geographically limited. She supported continuing recruitment of evidence rather than drawing a conclusion from the median or treating the reports as representative of all small employers.

13. Jurić summarized the recorded profile of the reports for the session. The reports came from Canada (5), Germany (3), Italy (3), Mexico (2), Brazil (1), Argentina (1) and the United Kingdom (1). Reported team sizes were: “Just me,” 44 per cent; 2–9, 38 per cent; 10–49, 12 per cent; and 50–249, 6 per cent. Eight reports had been received in the preceding 30 days. He said these figures were descriptive of reports received, not estimates of the prevalence of hiring-cost problems across countries or business populations.

14. In discussion of international context, members noted that the United Nations describes micro-, small- and medium-sized enterprises as comprising approximately 90 per cent of businesses, 60–70 per cent of employment and around 50 per cent of GDP worldwide.³ Jurić said that these global estimates helped explain the relevance of the subject but did not answer the Council’s narrower question about the first ten hires. Members agreed that the Council’s evidence gathering should remain specific to the decision and process an employer faced.

15. Jurić then reviewed the proposed evidence instruments. Members supported continuing the First Ten Hires cost diary and the employment-cost comparison as separate but related activities. The diary would capture the sequence of a hiring attempt; the comparison would organize cost categories and distinguish one-time from recurring amounts. Participants emphasized that neither instrument should imply that all countries use the same contribution structure. The chair confirmed that no draft standard was before the session and that the discussion did not constitute a pattern-test determination.

16. In closing discussion, members identified three gaps for follow-up: evidence about hiring attempts that did not result in employment; clearer records of when a cost became known; and descriptions of administrative steps alongside, but distinct from, monetary amounts. Speakers supported keeping the evidence request proportionate and accessible to businesses with no employees. They also supported continuing to report findings with country and team-size context, and to state the limits of the evidence whenever totals or comparisons were presented.

Conclusions and decisions

1. The Council agreed to continue the First Ten Hires cost diary and employment-cost comparison as evidence-gathering activities. The session did not approve a draft standard, recommend a specific contribution rate or determine that the evidence had established a pattern.

2. The Council agreed that subsequent materials should distinguish one-time from recurring costs, direct monetary amounts from administrative time, and reported experience from broader estimates.

3. The Council agreed that evidence requests should include attempted hires that did not proceed and should allow members to report that a cost was unknown or difficult to calculate.

4. The Council agreed that the OECD tax-wedge figures could be used as context, with an explanation that they do not alone measure small-employer cash flow or administrative burden.

5. The Council reaffirmed that member accounts should not identify a member’s business unless that member chooses to make the account public. No statement was made on behalf of the OECD or any government.

Action items

Certification

This summary record was issued by Nikola Jurić, Chair of the Team Council, Leipzig, Germany.

Sources

1. International Labour Organization, “Micro, small and medium-sized enterprises.”
2. OECD, Taxing Wages 2026: Germany country note.
3. United Nations, “Micro-, Small and Medium-sized Enterprises Day.”

Notes and sources

Sources

1. International Labour Organization, “Micro, small and medium-sized enterprises”
2. OECD, Taxing Wages 2026: Germany country note
3. United Nations, “Micro-, Small and Medium-sized Enterprises Day”