What is a Global Employment Solution (GES)?
A Global Employment Solution is an employment solution where the work is not restricted to a certain geographic location. The employer may be based in one country while the employee works in another. This arrangement is often used to circumvent local labor laws or to take advantage of lower wages in another country. It can also be used to allow companies to operate in countries where they would otherwise be unable to.
Advantages of GES
There are several advantages and disadvantages to using a GES. Some of the advantages include:
- The ability to hire employees from anywhere in the world.
- The ability to take advantage of lower wages in another country.
- The ability to circumvent local labor laws.
Why Use a Global Employment Solution Instead of a DIY Approach?
You might choose to use a GES instead of a DIY approach for several reasons.
One reason is that it can be difficult to find and hire employees in another country if you don’t have a presence there. This is especially true if you’re trying to hire for a specialized role.
Another reason is that using a GES can help you avoid some pitfalls associated with hiring employees in another country, such as compliance with local labor laws.
When Might I Need a Global Employment Solution?
There are several circumstances in which you might need to use a GES.
For example, you might need to hire an employee in another country if you’re expanding your business into that market. Or, you might need to use a GES if you’re looking to circumvent local labor laws or take advantage of lower wages in another country.
There are a variety of distinct ways to arrange foreign employment, depending on the country and the employee’s needs:
Option 1: Localized Work with Hibernation of Home Country Employment Outsourced Employees
This entails putting the home employment on hold while arranging local employment in the host nation. It ensures statutory compliance and preserves some connection for the employee in their own country.
For example, suppose a firm wishes to send a worker from the United States to Singapore for six to twelve months. In that case, this is probably the ideal option since it is the least disruptive and allows them to go back home without losing benefits or seniority.
Option 2: Fully Localized Employment Solution Using Outsourced Employees
The second option is to localize employment in the host nation fully.
This effectively means that a local company and subject will employ the employee to local laws and regulations. This is often the best option if the employee works in the country for an extended period or if the company wants to avoid any potential compliance issues.
For example, if a company wants to send an employee to work in China for two years, it’s probably best to arrange for fully localized employment. This will minimize compliance risks and make it easier for the employee to adjust to living in a foreign country.
Employed in the Home Country, with Statutory Contributions Made in the Host Country
The third option is to remain employed in the home country but make statutory contributions in the host country.
This option is often used when an employee is only working in the host country for a short period or if the company wants to maintain full control over the employee’s employment status.
For example, suppose a company wants to send an employee to work in India for six months. In that case, it might choose to keep him or her employed in the United States and make statutory contributions in India. This would allow the company to maintain full control over the employee’s employment status and benefits while ensuring compliance with Indian labor laws.
GEs can help companies manage the complexities of global employment, from compliance with local labor laws to finding and hiring employees in another country.
A GES can be a valuable tool for companies that are expanding their business into new markets or that want to take advantage of lower wages in another country. If you’re considering using a GES, it’s important to speak with an experienced employment lawyer to ensure that you understand all potential risks and compliance issues.
Dual Employment
This option is often used when an employee is working in the host country for an extended period or if the company wants to maintain a presence in both countries.
For example, suppose a company wants to send an employee to work in India for two years. In that case, it might choose to keep him or her employed in the United States and make statutory contributions in India. This would allow the company to maintain full control over the employee’s employment status and benefits while ensuring compliance with Indian labor laws.
Alternatives to Using a Global Employment Solution
If you’re not sure whether a GES is a right solution for your company, there are a few alternatives that you can consider.
- One option is to use a local employment agency to help you find and hire employees in the country where you’re expanding your business. This can be a good option if you’re only looking to hire a few employees and are not concerned about compliance with local labor laws.
- Another option is to use an international staffing company. These companies can help you find and hire employees in other countries, and they often have experience with the compliance issues that you’ll need to consider.
- Finally, you can always try to find and hire employees independently. This can be a time-consuming and difficult process, but it may be the best option if you’re looking to hire a large number of employees or want full control over the hiring process.
No matter your choice, it’s important to speak with an experienced employment lawyer before expanding your business into another country. Doing so will help you avoid potential compliance issues and ensure that you’re fully aware of your rights and responsibilities.
