Employee Benefits: Overcoming the Complications when Hiring Overseas
The key component of any business is its workforce. It is very important to have a motivated, flexible and supportive staff to take your business to greater heights. Almost 85 percent of employees traveling or living overseas expect the employer to provide coverage and access to quality care while away from home. With more and more employers hiring international employees, internal audit compliance are becoming customary. The burden on employers to comply with regulations in the various countries is increasing employer liability enormously. When you go international you soon learn that each country is quite different and that the term ‘benefits’ have a wider meaning.
While salary is an important aspect of the job, employee benefits form a crucial determinant in creating a resourceful work environment that is mutually beneficial to the employer as well as the employee. Many employers may wonder about the employee benefits that they are legally required to provide in a international expansion. A good benefits plan also indicates the level of interest and concern an organization has towards its employees’ well -being. This in turn builds a positive working environment and promotes better work habits and financial processes. Employee benefits in an international set up include many aspects, such as taxes, social security, relocation costs, terms of termination, health care benefits, retirement benefits, life insurance coverage, dental and vision insurance, flexible work policies, maternity and paternity leave, family leave, medical leave, disability compensation, paid holidays, etc. In an international business expansion, the type of industry under which the business falls is a major deciding factor for employee benefits. Most employers do need to educate themselves on the various laws and compliance issues as they differ from country to country.
The following bullets provide a broad classification of some of the country – specific HR laws:
Mexican Pretax Profit for Employees
Employees have certain rights which cannot be denied by any contract in Mexico. The most unwelcome news too many U.S. employers is that employees can be entitled to 10% of the company’s pretax profit! Maybe the second most unwelcome information is that they are also entitled to an extra 25% of their salary during holidays.
Chinese Marriage Leave
In China, an employee gets the benefit of an additional leave; “marriage leave” which varies by age. If the employee is marrying later in life, (e.g. the groom is over 25 years or the bride is over 23 years) they will be entitled to 10 additional days during which period their wages and other welfare benefits must not change.
German Parental Leave
Parental leave is a relatively new concept. Parents in Germany are entitled to leave for up to 14 months during which period they must receive 67% of their net income. Fortunately for employers, the amount is capped at 1,800.00 EUR per month. More specifically, fathers have a right to leave during the first three years of a new baby’s life, but up to 12 months can be deferred and must be taken before child’s 18th birthday.
Italian Monthly Salary
When you agree a salary with your employee in Italy, you should remember that the employee will benefit from a thirteenth and fourteen month salary, which is equal to one-twelfth of the annual salary.
Healthy Employees in Netherlands
And if you are employing someone in the Netherlands, you need to know the additional health benefits provided to employees. If the employee gets sick, the company is required to pay the employee 70 % of the last earned salary for two years. If your industry has a collective bargaining agreement, the employee may benefit more.
It is undoubtedly a challenge to keep up with the unending list of benefits and employment laws governing employee rights, and you need a professional partner who can assist you in meeting these regulations and avoid being legally penalized. These professionals have profound expertise in dealing with employee benefits related to retirement, disability, termination, death and medical plans, and are one of the biggest advantages in an international expansion.
Know more – tax equalization expat
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