One of the most common and costly mistakes organizations make is assuming foreign markets operate exactly as they do in the U.S.
Global employment is complex, and organizations face a number of compliance challenges as they attempt to expand their workforce, including:
New market compliance
Each territory comes with its own laws regarding employee on-boarding/registering, tax calculations, and more. Stretch this complexity across the globe and your job becomes exponentially more difficult.
Keeping employees paid, on time, is crucial to company moral and productivity. But what about tax deadlines? Withholding and reporting laws? Regulations requiring employee tax slip signatures? Failure to adhere to and keep up with any of these payroll compliance rules can result in serious penalties, significantly affecting your bottom line.
Benefits and expectations
Few aspects of global employment differ as widely as benefit requirements. For example, while certain levels of benefits are required by law, in the U.S. most countries offer more than adequate state-provided health care. Careful consideration must be given to your benefit plan on a country-by-country basis, or you risk redundant coverage, under-staffing, or penalties for noncompliance.
It’s essential to organizational culture that every employee knows they are treated equally and fairly, regardless of the country in which they work. Liability insurance can help accomplish this. But not all countries have a state mandated plan for companies to pay into. Are you prepared for its limitations? Or would setting up your own plan to protect work-sites and employees be more advantageous?
Termination policies and practices
Termination is part of doing business, wherever you operate. Unlike in the U.S., the only country where “at-will employment” exists, termination rules and regulations around the world are more complex. For example, in many countries, before employees can be legally terminated for performance, the employer must make every attempt to bring performance levels up to required standards. Documentation of process and severance are some issues HR professionals must have intimate knowledge to avoid penalty and loss in productivity.
Retirement and pension plans
As the number of Gen Xers and Baby Boomers planning to exit the workforce continues to rise, so too does the complexity of pension planning and retirement. Employers with international workforces need to understand fully each country’s regulations as they apply to retirement. What age is mandatory? Is national social insurance part of the equation? Are employee pension contributions voluntary or required by law?
Get started with innovative global products
Knowing and understanding the key global compliance issues outlined above is a great start toward creating opportunity. Having a partner who has been through it helps, too.
With innovative products like Global Employment Outsourcing, we enable companies to create opportunity out of global compliance challenges through faster, smarter and more efficient outsourcing.