You’ve spent countless hours researching, preparing, and planning, and it’s finally time to make your first step into a new, global market. You’ve found the right workers, and all you need to do is get a signed contract. Should be easy, right? Well, not always. Extending an international employment offer can be more complicated than you might think. Between local labor laws, taxes, regulations, and worker expectations, it takes some work to get an international employment offer right.
International Employment Offer and Local Laws
Before you begin writing your employment contract, make sure you understand both the labor requirements and tax laws of the country you are hiring in. Every country regulates how employers treat their employees, but each has its own set of regulations that you should be aware of.
When you are ready to hire a new international employee, consider partnering with an expert on local labor laws. It might seem like an extra expense, but they can help you make the right decisions and mitigate the risk of getting sued. Partnering with a global Employer of Record is the easiest and most cost-effective way to hire employees in foreign markets while maintaining local compliance. An experienced global Employer of Record already understands local laws and can streamline the entire employment process.
The Basics of an International Employment Offer
Nearly every employment offer or contract must include:
- Job description, hours, and place of work
- Salary and benefits
- Bonus structure and other payments
- Sick and vacation leave
- Start date
- End date (if it is a fixed-term contract)
Depending on where you are hiring, each of these items may be regulated by the local government. For example:
- Complicated deduction schemes in India means that an employee’s income is frequently divided among several allowances, each of which is taxed differently
- Many countries require employers to pay a 13th or 14th-month bonus
- Thailand mandates severance payment for employees, which can range from 30 to 300 days pay, depending on length of employment
Overlooked Employment Contract Stipulations
While most people understand the basics behind an employment offer or a contract, there are a few items that many people overlook. It’s advantageous for both the employee and the employer to think through these contractual items.
Termination clause. Termination clauses lay out how an employer and an employee can end the relationship. It should stipulate the process for termination, the time-period before leaving, and the benefits the company may offer if they are terminating the agreement. It is extremely important to write this clause precisely and unambiguously. Many companies have lost lawsuits because of poorly written termination clauses.
Intellectual Property. Specific Intellectual Property (IP) clauses help the employee and employer understand who owns IP. This is especially important in technical and creative fields where employees may work on side-projects. A clear understanding of what belongs to whom can help everyone know where they stand. IP laws differ from country to country, so each contract needs to reflect local regulation.
Background Checks. In many countries, it is standard procedure to run a background check on prospective employees, but that isn’t the case everywhere. Some countries prohibit or discourage the practice altogether. Your contract should include whether a background check is required for employment, how it will be conducted, and what will be covered.
As previously mentioned, when crafting an international employment offer, we recommend partnering with a global Employer of Record to ensure compliance with local regulations. Contact us today to learn how a global partner can help your company compliantly enter the international marketplace.