6 Compliance Mistakes to Avoid When Hiring International Workers

Venturing into the international talent marketplace can give your company access to skilled employees anywhere in the world. While it is not as simple as employing at home, the process is manageable as long as you have the right information and in-country resources to assist you.

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Venturing into the international talent marketplace can give your company access to skilled employees anywhere in the world.  While it is not as simple as employing at home, the process is manageable as long as you have the right information and in-country resources to assist you.

Surveys of multinational companies that hire international employees show that their number one concern is compliance with local laws and regulations.  The reasons are evident, as non-compliance can mean employee complaints, legal claims and fines or penalties.  In extreme cases, a company can be prohibited from hiring and doing business in the future.

If you are wondering how authorities can realistically monitor foreign employers, most non-compliance actions probably arise from either employee complaints or unexpected government audits of the local entity.

To help you avoid this outcome, we have put together a list of the six most common compliance mistakes when hiring internationally. 

1. Misclassifying your worker’s employment status

It is tempting when first hiring abroad to simply engage the worker as an independent contractor, and thus avoid the entire burden of meeting employment regulations.  That is possible, especially for short-term work projects, but you have to be aware of the risk of misclassification, where your contractor is actually a formal employee under local criteria.

For example, if you pay the worker a fixed amount at regular intervals, provide work equipment, and control their time and work methods, they will likely be deemed an employee (or they could claim to be).  What this would mean is that your company would owe past due contributions, unpaid benefits, and potential fines.

2. Violating the host country’s employment and contract laws

Every country has distinct employment and labor laws, that may be more or less stringent than in your home country.  Examples include notice periods for termination, a compliant employment contract (in the local language), over-restrictive non-competition clauses, and other rules designed to protect employee rights.

As a foreign employer, you will want to know the specific regulations as the local employee would be favored in any dispute or claim...read more

Shield GEO makes international employment simple. Our customers use Shield GEO to employ and payroll hundreds of workers in over fifty countries. Find out more.

Tim Burgess

Director, Shield GEO Services Ltd

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