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Your Global Mobility Guide

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About the Author

Kiki Stannard

Partner, Fitzgerald & Law

Whether it’s advising clients about international assignments, global payroll management, employee benefits or compensation planning

- Kiki combines the compliance with the practical.

If you are looking for a 360 degree HR service, support with pre-employment checks, offer letters and contracts or simply PTO

tracking, Kiki can help you find a tailored solution that’s right for your company and your employees.

kstannard@fitzandlaw.com Kiki-Stannard

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Contents

4. Introduction

5. Assignment Agreement

5. Letter of Understanding/Assignment Letter

5. Immigration & Visas

5. Home Sale Assistance

5. Host Country Housing

5. Travel & Shipping

6. Administration of Salaries & Allowances

6. Relocation Allowance

6. Compensation

6. Education Allowance

6. Employee Benefits

7. Home Leave

7. Annual Leave

7. Emergency Leave

8. Tax Equalisation Policy

8. Localisation

8. Other Considerations

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Introduction Our experience of HR for globally mobile employees tells us that one of the biggest challenges for an international businesses is not about obtaining answers to particular HR queries but knowing which queries to raise in the first place.

In this guide, we aim to set out some of the key things an employer needs to consider before sending talent overseas.

We can advise you on all aspects of international assignments, so contact us to discuss your specific circumstances.

As well as the ‘people’ related services on the right, we also provide all of the corporate services a company needs when expanding internationally including company incorporation, corprorate secretarial, corporate tax, VAT, management accounting, vCFO services, audit and statutory accounts advice and compliance.

HR services we provide include:

• HR Compliance: Offer letters, employmentcontracts, absence management & PTO,compensation benchmarking, employmentchecks, HR software (HRS), performancemanagement and employee exit management.

• Global Payroll Compliance: Our full suite ofglobal payroll compliance services means thatyou can rest assured that any interaction withthe tax authorities will be accurate, on time andas convenient as possible for your employees.

• Employee Benefits: The level of one-to-onetime employees enjoy with an F&L specialistwith regard to their personal benefit programmeis unrivalled.

• Expatriate Tax: We help companies to managethe complex tax, planning, administrative andstrategic aspects of deploying an internationalworkforce.

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First things first Assignment Agreement

Assignments should be executed subject to obtaining the appropriate government work or residency permits and medical clearances.

Letter of Understanding/Assignment Letter

The terms and conditions of each international assignment will be set out in a Letter of Understanding called an ‘Assignment Letter’. The letter needs to confirm the mutual understanding between the employer and the employee regarding the terms and conditions applying to the international assignment.

The assignment letter must specify the length of the assignment. Depending on the length of the assignment, certain tax reliefs are available.

Immigration & Visas

It is imperative that expatriates, employees and their employers comply with all immigration and visa requirements in all countries. Expatriates are generally responsible for obtaining passports, visas, work permits and other necessary documentation themselves. If medical examinations or immunizations are required or recommended by the expatriate's personal physician, the employer will usually bear the cost of those medical examinations on behalf of the expatriate employee and accompanying family members.

It’s important that your employee understands that they are expected to comply with all regulations and requirements set forth in the work permit or immigration visa.

Home Sale Assistance

At the outset of an international assignment, an employer needs to define what support they will provide to an expatriate in relation to any home sale assistance. An employee may decide they wish to rent out their existing home, or own other properties – all of this must be clearly established early on.

Host Country Housing

Will the employer identify and contribute towards temporary housing? Will they directly pay or reimburse the cost of reasonable housing and utilities? Should reimbursed utility expenses include personal telephone and cable television costs? What happens if the expatriate wishes to purchase property in the host country? All the possibilities must be explored and clarified ahead of any assignment.

Travel & Shipping

Which class of air travel will be provided for the expatriate and accompanying family (if applicable) on the commencement of an assignment? Who will pay for any belongings being stored or shipped and to what extent? This needs to be considered for repatriation as well as for the assignment.

Finding out whether an expatriate is considering relocating any pets is also relevant when planning the assignment.

You will need to consider if the employee will require a vehicle or incur other costs to commute and who will pay for this.

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Allowances & Compensation

Administration of Salaries & Allowances Should expatriates be paid by direct deposit into a home country bank account? How will assignment allowances and reimbursements be calculated? Generally, allowances will be paid by the payroll provider responsible for salary payments, while direct reimbursements (e.g. housing) may be paid in the host location. The precise details and associated liabilities will need to be established before creating and entering into an agreement.

Relocation Allowance A relocation allowance is commonly provided at the beginning and end of the assignment. The relocation allowance is intended to compensate expatriates for all incidental expenses of relocation (e.g. electrical appliance conversion, linen, kitchen supplies etc.). It will usually be paid upon expatriation and repatriation.

Compensation Regularly, expatriates base salaries will be determined and administered from the home country, with any changes or exceptions noted in the Letter of Understanding. Incentive programme participation and awards will be determined based on home country offerings, taking into consideration local host country practices and laws.

Education Allowance

Sometimes, when an expatriate relocates with their family, an educational allowance may be necessary to provide adequate elementary and secondary education for an expatriate's children.

Employee Benefits

Whether an expatriate will continue to be eligible for home country state benefits (e.g. social security, unemployment insurance etc.) will be driven by the laws in the host country. An employer will need to think about what is typical in the host country in terms of employee benefits such as healthcare, travel, workplace pensions, salary sacrifice programs and so on. With the right advisors, local employee benefits packages can often be aligned with the benefits provided at HQ.

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Vacation / PTO

Home Leave Home leave is intended to provide the expatriate with an opportunity to make annual visits to their home country to:

• reaffirm ties with family and friends in their home country;

• attend to personal business; and

• lessen the cultural problems of re-entry upon repatriation.

Home Leave is usually specified as something that cannot be exchanged for vacation/holiday or cash and cannot accumulate from year to year. If possible, home leave should be timed with a business reason to return to their home country. That said, the period during which the expatriate is on home leave will normally be considered vacation/holiday time.

Annual Leave While on overseas assignment, the host country annual leave entitlement will commonly apply; however, advice should be sought for each country.

Emergency Leave An assignment policy will often include what will happen in the event of a death or any serious illness or injury involving a member of the expatriate's immediate family in the home or host country.

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Last but not least

Tax Equalisation Policy When sending an employee on assignment the employer will need to recognise that the employee could incur additional income taxes due to the foreign assignment.

Tax equalization ensures that the expatriate bears a proportionate tax burden to that which they would have paid had they remained in their home country.

Tax equalization provides similar tax treatment to all expatriates on international assignment, regardless of the host country location.

The policy is designed and intended to yield neither a tax benefit nor tax determent because of employment outside the home country.

A Tax Equalization Policy ensures compliance with home and host country tax law.

Localisation

After an expatriate has been on assignment for around five years, it is typical to review the situation and determine whether they should be transitioned to a local compensation package.

Other Considerations

The items highlighted herein are a broad indication of some of the key considerations. Being as prepared as possible will help to ensure a smooth and successful assignment.

Other considerations include:

• Exit & Entrance Interviews

• Cultural & Practical Guidance

• Recordkeeping Requirements

• Policy Modification

• Voluntary & Involuntary Termination

• A Change in Status

• Repatriation

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Get in touch

Provided it is structured and handled in the right way, global mobility is a

hugely exciting step for any company and for any employee undertaking an

international assignment.

To discuss creating your globally mobile strategy or to review your existing

arrangements, contact Kiki below.

Kiki Stannard, Partner +1 415 760 0489

kstannard@fitzandlaw.com

149 New Montgomery Street, 4th Floor San Francisco, CA 94105

USA

www.fitzandlaw.com