I see a lot of resumes come across my desk every day. When I find one I like I ask the person if I can use it as one of my favorite resume templates. Feel free to download the one you like and plug in your information.
I found a great article that talks about best practices to expand your business internationally. The Mink Company has contractors all over the world so if you are looking to expand into a different country but are not ready to take the plunge with full-time direct employees we can help. See number 4 below for more explanation on this or just give us a call.
NEW YORK—Paying U.S. personnel in countries where the employer has no registered presence can be tricky. Many organizations fail to realize the risks and run afoul of payroll and tax compliance requirements. Here are the ways to legally pay an individual in these situations, according to attorney Donald C. Dowling, a partner at K&L Gates in New York City.
There are several cases when a company might be doing business in another country without first registering with the local government: a temporary employee is working on a special project in a new country overseas or a company is “tiptoeing” into a country to test the market. Or a company may be trying to hire a worker who lives in a foreign country but would be working entirely on assignments for the U.S. company. Trailing spouses or staff who have personal reasons to move abroad but are still doing U.S.-based work can incur these risks. As do organizations operating temporarily in developing countries often hire local support workers such as drivers and personal attendants on an ad hoc basis, paying them in cash.
HR professionals should make a strong case for compliance with local overseas payroll laws. Avoid “just do it” arguments, and don’t accept claims from anyone who says, “I’ll accept the risk personally,” Dowling said Nov. 18 at a presentation by the New York City Society for Human Resource Management’s global special interest group.
Dowling said international payroll risks come up more than ever because of the growing use of technology, which facilitates remote work as never before possible.
Reasons Not to Register In-Country
When a multinational or nonprofit company launches a presence in a foreign market by opening a new local office, facility or factory, it’s typically required to register a branch, representative office or subsidiary with local authorities in order to do business legally and hire and pay staff locally. In most cases, Dowling said, clients are told by local host country attorneys to register an in-country corporate presence, get a local taxpayer ID and put the person on the local payroll.
“That’s the straightforward way to go into a new country,” said Dowling, who specializes in outbound international employment law and advises multinationals on cross-border employment law compliance.
But some organizations may not be ready to register a full-fledged legal entity. A company may be “just dipping its toes in the water of a country temporarily” before seeing if it might merit a bigger investment, Dowling said.
For example, a representative from a small machine shop in Michigan near the Canadian border may meet someone at a conference from Canada who could sell its product there but not be ready to expand until business picks up.
Another scenario involves remote workers. A U.S. company might want to hire someone in Argentina who can work from home, but the work would be for the U.S company (and not be related to any work in Argentina). Or a U.S. organization may need someone for an out-of-country temporary position for not just two weeks, but 18 months.
A final scenario is an individual moving for personal reasons, such as a trailing spouse whose partner is being sent to Sweden and the spouse wants to work remotely from home in Sweden for a U.S. company.
“The boss may say, ‘Sure, that would be fine.’ But the boss is not thinking from an HR perspective,” Dowling cautioned.
Making the Case for Compliance
Management personnel in some organizations, especially nonprofits, often cross their fingers and hope they’ll get away with keeping these “floating” employees on U.S. payroll. Or they think payroll providers like ADP or Ceridian can handle payroll, not realizing that the provider would need a client’s taxpayer ID for that country.
“Payroll providers … are merely an administrative service cutting a paycheck in your name with your taxpayer ID reporting to the government,” Dowling explained.
In the U.S., employers must report employee income to the IRS and withhold federal, state and sometimes city taxes. They also have to report to Social Security and make contributions to it, as well as help fund state unemployment insurance and state workers’ compensation insurance. Dowling said most other countries, except possibly some oil-rich countries, have laws similar to those in the U.S. for reporting payroll. And just like in the U.S., in many countries there’s the potential for criminal liability, not to mention steep fines to collect lost revenues, for not reporting income.
Dowling says the best way for HR to address internal resistance to compliance with overseas payroll laws is to pose a rhetorical question: If a foreign (non-U.S.) company had a trailing spouse working out of their New York City home on “home office” projects that had nothing to do with New York, would you advise them to just pay the person on the foreign payroll? Of course not.
“You’d think long and hard before you tell the foreign company to just ignore U.S. laws,” Dowling said.
4 Ways to Pay People
In general, there are four ways to pay a floating employee.
- Register or make the person an employee of a local affiliate. If you send someone to France and your organization is registered or has a subsidiary there, you can put the person on your payroll or you can “second” them to an affiliate or business partner. But organizations don’t typically incorporate foreign subsidiaries just to payroll one or two employees, so they look for other options.
- Put the employee on the home-country payroll. Say you’re sending an employee from the U.S. to Spain. It would be easy to keep the employee on U.S. payroll, but as soon as Spain becomes the place of employment, Spanish payroll laws likely kick in, making the home-country payroll structure a compliance risk.
But home-country payroll can sometimes be legal. If the employee works overseas for a short period of time, like a couple of months, an organization can likely keep the employee on the U.S. payroll “because the place of employment hasn’t shifted,” Dowling said. The host country might tax the employee and require a visa, but personal tax and immigration issues are separate from payroll law compliance.
Another way to do this is with a host country workaround. Some countries (not the U.S.) allow workarounds for offshore employers without any in-country presence or place of business, so check with local law.
These workarounds generally fall into three categories: Under the foreign employer exception (available in the U.K. and Thailand), if a company doesn’t do business or have a permanent establishment locally, it can hire and pay local staff without making local withholdings and contributions. The worker bears the burden of tax and social security filings as if self-employed.
France, Estonia, Sri Lanka and some other countries offer a payroll law compliance option for the employer, under which foreign employers with no in-country premises can make special “payroll only” registrations with in-country tax and social security agencies so they can issue a legal local payroll.
Payroll law option for the worker. Some countries, for example, some in Africa, allow an individual employed by a foreign employer not doing business in-country to self-declare as “foreign payrolled” to the local tax agency.
- Make the person a leased or assigned employee. This is a form of secondment or lending. The employee is employed by entity A but doing work on a daily basis for entity B. For example, an organization may need to send an employee to another country to handle customer service and can ask its in-country customer to payroll that person.
If there’s no local business partner, temporary agencies like Adecco, Manpower or Kelly often provide leased employment. “You can say we want Steve or Sarah, and Adecco will hire them and put them on the Adecco payroll,” Dowling explained. A floating employee in Argentina could be paid by Adecco, which would second the person’s services to your firm. The former U.S.-based employee typically resigns or his or her employment is suspended during this time, Dowling noted.
A variation on leased employment is creating a “shadow payroll.” Division A of a U.S. company may do something completely different from its sister division B, which alone operates in France. If division A needs to send someone to France, it can ask division B to fill out the paperwork and report wages to French Social Security and the like and can reimburse division B for doing the payroll.
“From the French payrolling point of view, it looks like the employee is being paid by division B, so you’re complying with all the payroll laws,” Dowling explained.
- Pay the worker as a legitimate independent contractor. This is risky and usually not the best route. Say an organization needs a salesperson in England but doesn’t want to register there, so classifies the salesman as an “independent contractor.” If that’s such a great idea, Dowling asks, then why not make all your U.S. salespeople independent contractors, since you’ll save on Social Security, employee benefit contributions and the like?
The answer is that you can’t because they’re performing as employees. Dowling said there’s general consensus around the world about legitimate contractor classification. If the person has set work hours and receives benefits and performance evaluations, then he or she is an employee.
A salesperson who represents product lines for a variety of companies in addition to yours might be able to be paid as an independent contractor, but if someone’s title is executive vice president and the person is on your organizational chart, that’s not going to fly, Dowling said.
Glassdoor.com sifted through tens of thousands of interview reviews to find the 50 most common questions. It would be good to review them before your big meeting to make sure you are as prepared as much as possible. It is also a good idea to think a bit outside of the box. Companies have been known to ask questions like how many cows are in the state of California or what would you do if someone offered you a million dollars to start your own company. The reason for questions like this is to evaluate your thought process.
The 50 Most Common Interview Questions:
- What are your strengths?
- What are your weaknesses?
- Why are you interested in working for [insert company name here]?
- Where do you see yourself in 5 years? 10 years?
- Why do you want to leave your current company?
- Why was there a gap in your employment between [insert date] and [insert date]?
- What can you offer us that someone else can not?
- What are three things your former manager would like you to improve on?
- Are you willing to relocate?
- Are you willing to travel?
- Tell me about an accomplishment you are most proud of.
- Tell me about a time you made a mistake.
- What is your dream job?
- How did you hear about this position?
- What would you look to accomplish in the first 30 days/60 days/90 days on the job?
- Discuss your resume.
- Discuss your educational background.
- Describe yourself.
- Tell me how you handled a difficult situation.
- Why should we hire you?
- Why are you looking for a new job?
- Would you work holidays/weekends?
- How would you deal with an angry or irate customer?
- What are your salary requirements?
- Give a time when you went above and beyond the requirements for a project.
- Who are our competitors?
- What was your biggest failure?
- What motivates you?
- What’s your availability?
- Who’s your mentor?
- Tell me about a time when you disagreed with your boss.
- How do you handle pressure?
- What is the name of our CEO?
- What are your career goals?
- What gets you up in the morning?
- What would your direct reports say about you?
- What were your bosses’ strengths/weaknesses?
- If I called your boss right now and asked him what is an area that you could improve on, what would he say?
- Are you a leader or a follower?
- What was the last book you’ve read for fun?
- What are your co-worker pet peeves?
- What are your hobbies?
- What is your favorite website?
- What makes you uncomfortable?
- What are some of your leadership experiences?
- How would you fire someone?
- What do you like the most and least about working in this industry?
- Would you work 40+ hours a week?
- What questions haven’t I asked you?
- What questions do you have for me?
1. You can never overdress:
- I know, I know! I hate to dress up just as much as the next guy. That said when you are going on an interview break out the nice clothes. If the potential employer knows you went out of your way to look nice they know you are taking the opportunity serious.
2. Research the company:
- If you have not yet found the company website you need to right away. I can’t tell you how many times I have heard “they did not even know the CEO of our company”. It is very important to research all parts of the company. Where are all the offices? What are all the products/services? How many employees? Press releases? Find out everything you can about the company before you start that interview.
3. Research the role:
- Study the job description over and over. Look at the website for the original job posting. Know all the requirements. Because I talk to so many people every day I do have a tendency to sail over the details of the position. If there is something that is not clear send me a note.
4. Research yourself:
- This one sounds kind of silly but a person really does forget their accomplishments and what is on your resume. Make sure you know your resume and what is on it.
5. Interviewer insight:
- All organizations and HR departments are different. Take a look at my 50 top interview questions link to help prepare you for the interview.
- Run through the questions and your answers. Use the mirror if you don’t have anyone to practice with.
7. Build a rapport:
- Be friendly. Most people like that. There is nothing wrong with starting a conversation with the weather, sports or commonalities that you have discovered through your research.
8. Never be late:
- Just like it says. Make sure you are there 15 minutes early sitting in the parking lot.
- Just like Aaron Rodgers said at the beginning of the 2014/2015 NFL season. “R E L A X” The person that is interviewing you wants you to be good just as much as you want to be good. They are on your side and want you to hit the ball out of the park.
10. Be positive:
- The reason you are looking for a new job is not that all the people you work with currently are idiots. You always should have a positive spin with your answers and a positive attitude in general. No one wants to hire a person who can’t play well with others or is always a downer.
I found a great article that helps explain the costs associated with employees and the money that can be saved by using contractors. If you have a need or would like to entertain using contractors please feel free to reach out to TMC as we would be happy to answer any questions you may have.
Classifying workers is one of the important decisions small business owners must make. It’s common for certain company contributors to fall under the “independent contractor” title, including consultants, writers, web designers, search engine experts, secretaries, janitors, machine operators, painters, electricians and other service providers. However, misrepresenting employees as contractors could cost companies big-time, so one must know the definition and the costs of an employee vs. an independent contractor.
The Internal Revenue Service (IRS) looks at three factors to define an employee or an independent contractor: behavioral control, financial control, and relationship. Employees are told when, where and how to work. They are given set hours and paid an hourly wage or salary. By contrast, independent contractors work on a project-by-project basis, taking as many hours as they need to complete the task for one set fee. Employees traditionally have most of their tools and financial expenses covered for them by the business, whereas independent contractors may have to purchase their own equipment without reimbursement. Employees usually receive benefits that include pensions, health insurance, vacation days and disability insurance, and contractors pay their own way. Independent contractors are also responsible for paying all of their own taxes, as opposed to employees who share the cost with their employers. Generally, employees are hired on a more long-term basis compared with independent contractors.
In April 2010, the Bureau of Labor Statistics estimated that employer costs for employee compensation averaged $29.71 per hour, with wages accounting for 69.6 percent and benefits averaging 30.4 percent of the total employee cost. They found that civilian employer costs, including private industry and government workers, averaged $2.62 per hour for life, health and disability insurance or 8.8 percent of total compensation. Legally mandated benefits, including Social Security, Medicare, unemployment and workers’ compensation, totaled $2.30 per hour or 7.7 percent. Benefits that include paid leave, vacation, holiday pay, sick days and personal leave amounted to $2.06 per hour or 6.9 percent. Retirement and savings plans cost employers $1.32 per hour or 4.5 percent. Supplemental pay, such as overtime, shift differentials, and bonuses, average 73 cents per hour or 2.5 percent.
According to Businessweek Magazine, employers can save up to 30 percent by hiring an independent contractor because they avoid paying payroll taxes, unemployment insurance, workers’ compensation and disability, as well as benefits that include pensions, sick days, health insurance and vacation time. Because independent contractors are considered self-employed, they must pay the federal government 15.3 percent for Social Security and Medicare, as well as any state or local taxes themselves. Classifying regular employees as contractors also gives businesses the freedom to evade minimum wage requirements and overtime mandates as well.
However, the cost of misclassifying employees is steep. The New York Times reports that California Attorney General Jerry Brown won a $13 million judgment against two companies that misclassified 300 janitors. The Illinois Department of Labor was awarded $328,500 in penalty fees from a home improvement company that misclassified 18 workers. In New York State, commissioner M. Patricia Smith says her task force has identified more than 31,000 instances of misclassification, bringing in $11 in unpaid unemployment taxes and $14.5 million in unpaid wages since late 2007.
Many small businesses rely on independent contractors and freelance workers because they’re more flexible — not to mention cheaper. However, the IRS warns that employers may end up paying more in the long-run for this game of dodging the system. “Bloomberg Businessweek” magazine reported that the IRS launched a three-year program in February 2010 that will examine 6,000 companies to look for permanent workers misclassified as independent contractors. President Barack Obama’s 2011 budget includes 100 new positions for caseworkers to pursue litigation if necessary. Most of these actions will target small businesses and the self-employed, says the General Accountability Office. If found guilty of misclassification, employers will be responsible for all past payroll taxes, unemployment taxes, plus interest and penalties. Although many business owners object that the legal definitions aren’t clear enough, the crackdown suggests that it may be better safe than sorry in this case.