Payroll Challenges: What to Consider When Paying a Global Workforce

Huge opportunities exist when a company pursues global expansion: new markets, new audiences and access to a larger talent pool. But expanding your organization’s geographic reach doesn’t always mean opening an office or branch in a new country. Sometimes, it’s hiring talent in the new market or relocating a current employee.?

This might seem easy, but cultural and legal nuances require up-to-date local knowledge to stay compliant in managing your global team. And if you’re planning on expanding into multiple countries, the challenge becomes even bigger. Say you’d like to expand in the UK, France and Brazil; it’s crucial to understand the types of employees you’re hiring and each market’s distinct employment and payroll laws.

Correctly Classify Each Employee

First, you must define the relationship between the company and the employee. Are you hiring talent as a full-time team member or an independent contractor? The two differ in terms of payment, benefits, taxes and more. Hiring a contractor offers more flexibility to the working relationship, while hiring an employee gives employers more control of day-to-day tasks. It’s essential to classify correctly to avoid legal repercussions.

Classification Considerations:

Comply with Local Laws

Once you understand how each employee fits into your company, you’ll need to understand the local labor laws. Keeping up with the regulations of every market where your employees reside can be daunting. Employment contracts, salary requirements, working hours and holidays vary from country to country.

For example:?

• Under Nicaraguan Law , the labor code establishes 15 calendar days of paid annual leave every 6 months of work.??
• Employees in Brazil are entitled to 30 calendar days of paid annual leave, and employers must pay 1/3 of an employee’s salary as a vacation bonus.
• In Norway , parents can take 49 weeks of parental leave at full pay between them, or 59 weeks at 80% pay. The employer pays the benefit and is reimbursed by the state.??

The administrative work that comes with staying abreast of all regulations can be overwhelming, but noncompliance with local regulations can damage your business and often result in hefty fines.

Compensate with Confidence?

This is where a Direct Employer of Record (EOR), like Atlas , can help. With entities in more than 160 markets, our Direct EOR model allows us to help you hire employees under our legal entity on your behalf. As the legal employer, we can onboard new talent, manage team members and take care of essential payroll and HR administration tasks. We’ll also ensure you’re compliant with all tax obligations and employment laws.?

• Our tech-enabled solution then makes it easy to manage and pay your people all over the globe. As a result, we reduce your time spent on HR and related admin, freeing you to focus on your business.?
• The Atlas HXM software simplifies HR admin, employee management and payroll management processes with a secure, intelligent, tech-enabled solution. Paying employees in multiple markets is simple, safe, and smart. ?
• Our platform is complemented by the market intelligence and up-to-date insights on tax and regulatory compliance needed to hire and manage global talent. Localized expertise helps companies navigate the complexities of international HR, payroll and local laws based on unique business needs. ?
• Our Account Managers are available to provide real-time data, insight, and analytics when you need them. ?

Need a compliance check??

Set up a free 15-minute call to discuss common global payroll pitfalls and the solution to ensuring international compliance.??