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Your employees abroad: which status?
Are you about to send a few of your employees abroad? As an employer, you’ll have to determine their status. Will your employees go work in a foreign country as expatriates or would you rather second them? Strong discrepancies in benefit systems and social contributions basically are what make these two options so different. Do avoid making hasty decisions and start by examining social and financial consequences.
Employer is decision maker
Within the European Union, legislation concerning employee assignment in various member states has been harmonized. Outside E.U., working abroad conditions can vary tremendously depending on the country of assignment. So what exactly do you need to take into account when sending employees to work abroad?
- Social contributions: depending on the status you send an employee abroad on and on the existence of international agreements, you may be exempt of paying contributions in the host country. However, you can also happen to end up having to pay contributions both in home and host countries.
- Social security benefits: the employee you send abroad won’t be covered in the same way according to the status you choose.
The employer can freely decide on the status his employees will have abroad.
Expatriation or secondment?
How long will your employees be working abroad? Part of your decision might depend on your answer to this question. Two possibilities are available.
- Expatriation : the expatriate employee is recruited specifically for the assignment or is sent by the employer to work abroad. Expatriation may last a year or a lifetime; no time limit exists.
- Secondment : the seconded employee is already working for the company and is sent abroad for a limited period. The authorized length of secondment varies depending on the country to which the employee is sent.
In some cases, the employee signs a local employment contract. This means he is subject to the host country legislation and no longer is under his former employers’ responsibility. The trick of sending an employee abroad resides in finding the right balance between your interests and those of your employee: limiting costs and ensuring adequate protection.
To find out more about sending employees abroad:
To see what the assignment rules within the E.U are, check out Your Europe website.