A Professional Employer Organization (PEO) provides outsourcing of payroll, workers' compensation, human resources and employee benefits administration.
They are specialised in dealing with contractors, freelancers and interim workers. They can also arrange work permits and work visas for qualified candidates. In essence they are a packaged solution for ensuring compliance with tax, employment and immigration law. PEO are especially popular with small to medium enterprises and companies working internationally.
Why engage a Professional Employer Organization?
If you're not content with your answers to questions like these...
- Do you have the resources to have a Global Mobility department with full responsibility for International Assignments?
- Do they cover all the destinations where you hire and source contract labor?
- How do you currently ensure compliance on cross-border work?
Then you should talk to us
The benefits to the client are numerous :
- reduced cost
- reduced administration
- focus on core, revenue-generating tasks
- reduced or clarified employer liability
- clear delineation of obligations and responsibility for the employer to the individual
- assurance of compliance with employment, immigration and taxation law
- clearly defined budgets and costing
- increased flexibility and mobility
- access to professional HR services including claims management for workers compensation and employers liability
- full compliance on such issues as payroll, Equal Opportunity Employment, Occupational Health and Safety, Anti-Discrimination practices, locally agreed Workplace Agreements & Employee Handbooks.
- can offer better benefits package and remuneration to contract employees
Similarly Employees have much to gain from PEO's:
- better comprehensive benefits
- accurate and rapid payroll processing
- access to full resources relating to labor regulations, workers rights and Occupational Health and Safety
- full statutory protection and insurance cover
- clear and consistent policy
How do companies save by using PEO's for their international contractors?
- costs of scale mean they can deliver the same benefits (or better) than your in-house resources but at a lower cost. Especially if you're looking to establish in a new destination the cost of entry is often prohibitive.
- If you have a business need or urgent project do you have the time to properly investigate and establish the necessary structures to run staff in a foreign locale?
- The risks of not doing the proper research in this area are potentially devastating.
1) Your company could be assessed "permanent establishment" in the location of business requiring it to pay local corporation tax on any business derived in that country. Does the jurisdiction have a dual tax agreement with your base of operations? Will you be liable for double tax?
2) You may expose yourself to local employment regulations related to the staff you engage. Each country views major employment terms differently. For example in China any employee who has their contract extended twice (i.e. performs 3 consecutive contracts with the one organization) is deemed a permanent empoyee for life. You can no longer make this employee redundant without offering them retirement.
3) Who will deal with the employee's individual tax concerns. If you expose your employee to double taxation or they suffer a loss in take home pay due to being exposed to higher tax and social dues - you will have a very unhappy staff member and a major headache!
If you'd like to know more about PEO - Professional Employer Organizations and the benefits they can offer to International Assignments and Global Mobility please contact us.