Presenting a live 90 ‐ minute webinar with interactive Q&A Multinational Employers and Cross ‐ Border p y Employment Arrangements Evaluating the Options: Secondment, Transfer, GEC or Dual Employment WEDNES DAY, JUNE 8, 2011 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific T d Today’s faculty features: ’ f l f Donald C. Dowling, Jr., Partner, White & Case , New Y ork Carole A. S pink, Partner, Baker & McKenzie , Chicago Thomas A. McKinney, S enior Counsel, Labor & Employment Law, International Specialty Products , Wayne, N.J. The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
Conference Materials If you have not printed the conference materials for this program, please complete the following steps: • Click on the + sign next to “ Conference Materials” in the middle of the left- hand column on your screen hand column on your screen. • Click on the tab labeled “ Handouts” that appears, and there you will see a PDF of the slides for today's program. • Double click on the PDF and a separate page will open. Double click on the PDF and a separate page will open. • Print the slides by clicking on the printer icon.
Continuing Education Credits FOR LIVE EVENT ONLY For CLE purposes, please let us know how many people are listening at your location by completing each of the following steps: • Close the notification box • In the chat box, type (1) your company name and (2) the number of attendees at your location • Click the blue icon beside the box to send
Tips for Optimal Quality S S ound Quality d Q lit If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory and you are listening via your computer speakers, you may listen via the phone: dial 1-866-869-6667 and enter your PIN when prompted Otherwise please send us a chat or e mail when prompted. Otherwise, please send us a chat or e-mail sound@ straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Qualit y To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again press the F11 key again.
Multinational Employers and Cross Multinational Employers and Cross- Border Employment Arrangements Wednesday June 8 2011 Wednesday, June 8, 2011 Thomas A. McKinney Carole A. Spink Donald C. Dowling, Jr. Senior Counsel, Labor & Employment Law Partner International Employment Law Partner International Specialty Products International Specialty Products Baker & McKenzie Baker & McKenzie White & Case LLP White & Case LLP Wayne, N.J. Chicago New York City TMcKinney@ispcorp.com carole.spink@bakermckenzie.com ddowling@whitecase.com
Multinational Employers and Cross-Border Employment Arrangements Employment Arrangements Roadmap Roadmap I. Options for structuring the expat assignment II. Employer considerations III. Documenting the assignment IV T IV.Terminating the assignment i ti th i t 6
Context Context IMAGINE: IMAGINE: • HQ of a multinational in (say) Chicago has a HQ employee they need to run their HQ l th d t th i subsidiary in (say) Rome for two years • They also have an employee in (say) their Tokyo operation they need to send to run their operation in (say) Beijing for two years 7
I. Options for structuring the expat assignment Some thoughts on an approach The common request for a “sample” or “form” expatriate agreement is misplaced • • Never ask “do you have a form expat agreement?” until you can Never ask do you have a form expat agreement? until you can answer: “what kind of expat structure is most appropriate here, for this particular expat assignment?” The question “how should we structure an expat posting?” The question how should we structure an expat posting? has no single answer • Major multinationals use various structures depending on context and specific needs context and specific needs. To decide among the various possible structures, analyze the concepts/issues in play What are the various possible expat structures? 8
I. Options for structuring the expat assignment p g p g Five types of expatriate: Five types of expatriate: 1. Home-country-affiliate employed and paid 2. Home-country-affiliate employed/host-country-affiliate paid 3. Localized 4. Localized with “hibernating” home country affiliate agreement 5. Dual employment contract 9
I. Options for structuring the expat assignment To decide among the five possible expat structures, understand the concepts in play (the issues that drive different structures) Glossary of Key Concepts (not necessarily terms of art) Glossary of Key Concepts (not necessarily terms of art) • “Accommodation” – Limited host country exception to law allowing certain foreigners (diplomats, reporters, military, NGOs, non- profits) to work on foreign (home country) payroll • Charge-back – Intra-affiliate payment to reconcile payroll payments one entity makes on behalf of an affiliate’s beneficial employee • Choice of law – Selection of a country’s law to apply to an expat arrangement—either overt contractual selection or selection by operation of law (in Europe, Rome Convention); in some expat arrangements, 2+ jurisdictions’ employment protection laws apply simultaneously, because of the public policy of mandatory application of employment protection laws • Dual employment or co-employment – T Two entities (two affiliates or a principal and an outsourcer) employ an expat simultaneously—either overt titi (t ffili t i i l d t ) l t i lt l ith t contractual selection or after-the-fact determination designation Expatriate • – Hired in one country and later assigned to work abroad for the same employer or an affiliate: Distinguish “participating in company expatriate program”: Not all actual expatriates are designated as “expatriates” under an employer’s program an employer s program • Expatriation “for the benefit of the employee” – (As opposed to most expatriations, which are for the benefit of the employer) 10
I. Options for structuring the expat assignment Glossary of Key Concepts (not necessarily terms of art) • “Flying under the radar” – Noncompliant payroll: Expat is paid on a home country payroll, which violates withholding/reporting/payroll laws of host country, without a shadow payroll • Foreign hire – Employee hired in one country to work a local job in another country: Avoid structuring as an expat, even where the business arrangement is to pay expat-like benefits • Global employment company (GEC) – Swiss incorporated, or other, subsidiary that employs a team of mobile “permanent expatriates” • “Hib “Hibernating” employment agreement ti ” l t t – Not terminated, dormant legacy home country employment agreement predating the expat assignment, currently superseded by an expat arrangement with host country employer entity; hibernating agreement “springs back to life” upon termination or repatriation • Inpatriate I t i t – Coming from a foreign country operation to work at HQ • Long business trip – Employee renders services for a period in a host country, but “place of employment” remains the home country 11
I. Options for structuring the expat assignment Glossary of Key Concepts (not necessarily terms of art) • • Permanent establishment Permanent establishment – “Doing-business-in” corporate entity tax presence: An expat employed and paid by a home country entity that otherwise does not do business in the expat’s host country may trigger a permanent establishment finding, making home country entity liable for host country corporate registrations and tax filings requirements • • Secondment Secondment – Employee works and is paid by one entity while lent out to (rendering services for) another (in the expat context, across borders); the entities might be affiliates or merely business partners or principal/outsourcer • Secondment (or expat) agreement vs. inter-affiliate assignment agreement – A secondment (or expat) agreement is between an employer and an expat; an inter-affiliate assignment agreement is between a home country employer entity and a host country affiliate entity (expat is not a agreement is between a home-country employer entity and a host country affiliate entity (expat is not a party) • Shadow payroll – Local payroll deductions/reporting/withholding issued on paper and charged back to foreign employer entity, which pays employee in home country (to comply with host country payroll laws) • Social security totalization treaty – Bilateral treaty by which expatriates stay on (employers contribute to) home country social security system for up to (usually) 5 years: Does not affect income tax withholding obligations • “Stealth expat” – Employee’s place of employment shifts abroad perhaps by extending a long business trip without Employee s place of employment shifts abroad, perhaps by extending a long business trip, without legal/payroll or local HR accommodating the move 12
Recommend
More recommend
