The perks and protections for being YOUR employee are highly important when formalising an employer/employee relationship, otherwise known as employee benefits.
Apart from this being how a business compliantly engages with someone they want to do full-time work for them, it gives the individual doing the work a variety of protections and perks which only come from being employed.
The “benefits” for an employee could be many things including:
- paid sick leave
- health insurance
- gym membership
- termination protections
but they all fall into one of two categories:
- those which are statutorily required when employing in a given country
- those which the employer chooses to offer to attract and retain the best talent and because they are nice people.
Understanding exactly what benefits to provide to an employee in a foreign country is something which can cause difficulties for employers.
The issue can be that the employer doesn’t want to give more to a new employee working in an overseas jurisdiction than they do to their existing employees at home. Or it can be that they feel the need to provide something which isn’t actually expected or valued and may be a duplication of cost.
What employee benefits are required by law
Your employee is entitled to paid time off.
The number of days of paid annual leave and public holidays varies from one country to the next and the most important thing is that you must give at least the statutory minimum required in the country in which the work is being done. An employer may not reduce the entitlement in line with what their head office staff receive.
Similarly, if the employment law of a country dictates that your employee is entitled to severance payments in the event of termination, you cannot opt-out. It does not fit with the cultural norms of their homeland.
Be warned, looking for a workaround in such a scenario won’t work if a disgruntled employee goes to tribunal. Local laws will be upheld!
In the other direction, employers often want to offer something which is highly valued in their home country, but less so where they now want to employ.
For example – private medical insurance. If a country has a really good social security system and state-funded healthcare, the perk of private medical cover is less beneficial. Further, the employer may not realise that part of the statutory costs of employing in the country goes to provide healthcare provision. An unsuspecting employer could, in effect, be choosing to pay for the same thing twice.
As always, the advice is to ask an expert and the PEO Worldwide team, that’s us, is here to help you. Find out what the statutory minimums are, what this provides and what the cultural expectations might be in the country in which you will have your next employee.