Going Global? How to Hire Outside the US

1. Going Global? How to Hire Outside the US

2. Introduction MCN Associates is a UK based Global HR Consultancy business that assists US corporates expanding overseas The key areas of expertise that MCN advise and assist with are: • Generalist HR/Employment Law • Employee Compensation & Benefits • Immigration and Global Mobility Proprietary and Confidential

3. Presenter Bio Chris Davies - based in London 17 years HR experience. 14 years experience of working exclusively with US businesses Previously headed up the International HR functions of 3 of the leading global outsourcing companies in the market Co-founded MCN to focus solely on a dedicated Global HR Solution Proprietary and Confidential

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5. Understanding the Journey…. In most cases it’s sales that drives the location of international expansion However, there is much to be considered, and decisions made before the sales team are let loose It’s advisable to avoid “retrospective compliance” where possible Proprietary and Confidential

6. Poll Question #1 Is your company looking to hire overseas? Proprietary and Confidential

7. In-Country Set-Up Options • There are a number of options that can facilitate ‘employment’ locally, typically: • Professional Employment Organization (PEO) • Independent contractor • Direct employment Proprietary and Confidential

8. CompanyStructure • Obtaining confirmation of whether your planned activities cause a Permanent Establishment is key • Typical entity types used when employing direct: • Representative Office (payroll only) • Branch • Subsidiary Proprietary and Confidential

9. Company Structure • Are there any other HR considerations to take into account when deciding on your structure? • Employment/contractor duties could be restricted • Employee benefits options could be dramatically reduced • Immigration minimum requirements may not be met Proprietary and Confidential

10. Poll Question #2 Do you currently have any advisors assisting you with your international hiring? Proprietary and Confidential

11. Pre-empting the ‘Culture Shock’ • It is important to remember that in other countries, ‘they do things a bit different’! • Quirky employee terms/requirements exist – try and embrace them • Local terminology variances can often lead to confusion • Ability to manage employee expectations Proprietary and Confidential

12. Employee Classifications • In many international locations, especially in Europe, employee classifications can also add another layer of complication • Managerial and technical level employees enjoy more employment protection • Managerial and technical level employees enjoy enhanced social and supplementary benefits • Some categories should be avoided if at all possible Proprietary and Confidential

13. Industrial Relations • Industrial relations cover a myriad of subjects within employment around the world. Such as: • Employee Representatives • Health & Safety Councils • Collective Bargaining Agreements • Work Councils • Benefits Representatives Proprietary and Confidential

14. Employment Documentation • There are distinct differences between US style offer letters and the more complex documentation used elsewhere around the world • Employment contracts • Statements of employment particulars • Employee categories and industry wide collective bargaining agreements • Local language requirements Proprietary and Confidential

15. Social Security Mandatory employer social security contributions can differ significantly from country to country These differences in social security benefits can drastically change the overall supplementary benefits package In some locations employer obligations reach further than the social security contributions and if not insured can leave the local company exposed Proprietary and Confidential

16. Supplementary Benefits Due to the varying levels of coverage via social security schemes – having a consistent supplementary benefits plan globally, is a real challenge Providing employees with supplemental benefits that are consistent with their role in each country is more cost effective Supplementary benefits often create additional tax liabilities for both the employer and employee. Non insurance based benefits are also an important part of the benefits package Proprietary and Confidential

17. Employee Stock Options • Common for US corporates to issue stock options to their international employees • Consideration needs to be given to tax implications • Options issued in the US parent company will often be deemed “unapproved”, which means that any subsequent gains will be taxed via payroll • Unquantifiable Tax liabilities on both employer and employee • Tax efficient “sub approved plans” Proprietary and Confidential

18. Immigration Considerations It’s imperative that you know the allowable activities prior to sending employees overseas on business Work permits and visa processes are not forgiving from a time perspective Employee supporting documentation issues are a common problem Immigration Authorities require robust HR procedures to be demonstrated as part of application process Proprietary and Confidential

19. Immigration – Global Mobility Employee location and appropriate accommodation is an important factor to be carefully considered Employee family requirements are a project in themselves and are key to the success of an intra-company transfer or secondment Proprietary and Confidential

20. Poll Question #3 What location is top of your expansion agenda? Proprietary and Confidential

21. Prevention is better than cure There is much to be gained by taking your business global. However, a little investment in preparing yourselves for ‘what lays ahead’, makes the journey a much smoother and less stressful one Proprietary and Confidential

22. Q&A Session Proprietary and Confidential

23. Contact Information The above/attached information is not legal advice. It should not be considered a legal opinion as to which laws apply or as to how any law applies to a particular situation. Companies or individuals should seek advice of counsel with regards to their particular situation. • Chris Davies, Director, MCN Associates • P: +44 (0)7525 534823 • E: chris.davies@mcn-hr.com • www.mcn-hr.com • Lisa McCormack, Executive VP HR Services, Melita Group • P: 408-327-2137 • E: lmccormack@melitagroup.com • www.melitagroup.com Proprietary and Confidential