Establishing a first U.S. location with employees is far less difficult when a PEO steps in, especially one that understands international employers and is flexible toward them. An international employer who works with a PEO can get assistance with hiring, payroll, benefits, worker’s compensation, and HR support as if the PEO were their U.S. HR department.
Some PEOs offer enhanced solutions that are invaluable to an international employer in the initial stages. Even before the new business is fully in place, A PEO, for example, might assign an administrative support person at an hourly rate who will help source great local vendors for anything from bookkeeping-accounting to data/voice/phone and I.T. services, business insurance providers, short-term corporate housing and so forth. Flexible PEOs are set up for these types of requests and don’t consider them unusual.
The PEO solution itself spares an international employer from immense problems and liabilities that are associated with employing new people. By using a PEO, a global employer has an immediate, savvy H.R. department which can quickly brand and adapt all of its employment documents, suggest and provide the correct benefits and worker’s compensation for those employees, and provide critical support to on-boarding and training.
Flexible PEOs will also offer international employers an ASO arrangement if the international employer prefers to keep its U.S. employees on its own federal i.d. number. However, the PEO’s vast, local compliance and legal knowledge provide great protection to foreign employers. Under an ASO arrangement, the PEO can administer payroll and advise or perform in all areas worker’s comp, benefits and insurance-related procurement, plus set up and perform all HR tasks.
For international or foreign employers, avoiding liabilities they don’t understand is critical, and PEOs absorb much of the payroll and tax compliance, employee practices compliance, and insurance compliance in a way that is immediate and effortless. There are a lot of set-up burdens and costs that the international employer can avoid simply by hiring a PEO that caters to international companies, and the fees are usually very reasonable compared to hiring and setting up an HR department.
Whether it is a subsidiary or a branch location, PEOs operate by becoming the “co-employer” which places the PEO on the hook for correctly performing payroll and tax functions, covering the employees with worker’s compensation insurance, providing up-to-date handbooks, setting up and administering a safety program when needed, administering benefits, and in many cases preventing or absorbing employment related legal problems. These can range from a sexual harassment lawsuit to a wrong-termination claim. By using a PEO, an international employer is largely shielded from the countless issues that can arise from employing people, and this is one of many reasons why PEOs are popular for foreign and domestic employers alike.
The international company also dodges a lot of up-front costs because the PEO arrangement is “pay as you go”, and the PEO comes with all its infrastructure that includes software, documents, and communications in place.
When the international or foreign employer signs the PEO contract, within 24-48 hours there can be a branded dashboard in the employer’s name, comprehensive HR documents already branded in the employer’s name, and administrative-password rights for managers and employees. Corporate documents for the new location can also be housed securely in this branded site complete with company calendar, notification and announcement features. Synchronization with emails is done effortlessly. Customization of employee handbooks, safety manuals and job descriptions are rapidly performed. Payroll, benefits and training features are turned on within this new software dashboard. The PEO staff will also assist with setting up recruitment, hiring and on-boarding processes and documents.
From a compliance standpoint, since the PEO is considered the legal employer, the PEO will perform all communication with federal, state and local entities that require compliance to employment and tax laws. The international employer can focus on core business, and is not drawn into the endless tasks and regulatory burdens associated with employing people.
Because a flexible and internationally-inclined PEO has assisted in many start-ups and expansions, international employers have a valuable resource that ties back to the documented, stunning growth patterns of employers that use PEOs versus employers who use internal HR resources.
Leave a Reply