What is an employee?

An employee is someone who works under the direction and control of the employer and is subject to the employer’s policies and procedures.

Supporting a workforce in a country other than the company’s main base country can create regulatory confusion and complexities.

With that in mind, it’s important for companies to correctly classify their employees to ensure that compliance is in check and penalties are avoided.

What are the different types of employees?

Each type of employment contract entails different tax and regulatory rules.

• Full-time employees: work for a company on a regular basis. Usually, that means a minimum of 40 hours per week. Full-time employees are generally entitled to benefits like health insurance and PTO.
• Part-time employees: work for a company on a regular basis but usually fewer than 40 hours a week. Depending on the company’s policies, part-time employees may not be entitled to the same benefits full-time employees are.
• Temporary employees: brought in temporarily for a specific project. They usually aren’t entitled to benefits.
• Seasonal employees: these employees come in for a specific season, such as summer or during the holidays. Their employment tends to be terminated at the end of the season.

General requirements when hiring an employee

The process for hiring an employee will differ depending on what type of employee you’re bringing in (full time, part time, etc.) For the most part, though, the process will include the following components:

• New hire reporting
• Compliance and labor laws
• Tax withholding
• Benefits enrollment
• Records retention

Managing employees across the globe

Managing employees when they’re all over the world becomes more complicated. Some significant obstacles include the following:

• Currency exchange: Depending on their location, employees will require that payments be made in different currencies. For companies, that translates into the need to figure out a way to manage and pay out salaries and wages in different currencies.
• Local requirements: Companies with global workforces must ensure that they’re complying with local labor laws and regulations. Since employment policies differ in every country, this involves a lot of due diligence.
• Data privacy: Local data and privacy laws such as data processing according to GDPR, are another aspect companies need to consider to ensure they aren’t infringing on any processes or requirements.
• Reporting and analytics: Employers must offer timely and accurate reports on payroll to tax authorities. Since every country may have different requirements in this regard, reporting necessitates in-depth knowledge and expertise in the relevant regulatory ecosystems.

Global payroll and payments solutions can help employers overcome these obstacles by ensuring an overall smoother process, including offering a centralized platform to track payroll requirements, expertise in local regulations across multiple countries, and affordable and efficient cross-border currency conversion.