Managing International Assignments: Employer Guidance

Organisations deploy personnel on international assignment for many reasons. Whether you are addressing an internal skills gaps, supporting leadership development or looking to improve working relations across borders, for any international assignment to be successful, there will be a multitude of legal, immigration, tax and pensions risks to manage when sending employees overseas.

Global mobility programmes have traditionally been developed with a uniform approach, driven largely by cost management and operational efficiencies. However, organisations are increasingly taking a more flexible and bespoke approach to overseas assignments in order to attain advantage in areas such as compliance and talent development and retention.

While a one-size-fits-all approach to the fundamentals of mobility management may be a commercial reality, overlaying this should be areas of specific consideration and capability that can be adapted to the specific needs and risks of each international assignment. This allows for greater focus on the assignment’s commercial objectives and the agility to respond to the organisation’s changing global mobility needs.

 

International assignment objectives

 

From the outset of any successful assignment project, there should be clarity of objectives. Why as an organisation is the decision being made to invest in sending an employee to perform services in a different country?

International assignments can offer value in many areas, many of which typically present in the longer-term.

Internal knowledge transfer is a common assignment objective to address talent or skills shortages within overseas regions. Deploying key talent with specialist knowledge and skills to train and upskill local team members can help to resolve local labour or skill supply issues. The cost/benefit analysis can explore potential missed opportunities or delays resulting from shortages in the local talent market.

International assignments are also highly effective in building relationships and improving intercultural working. This could be relationships within an organisation, with local clients and intermediaries or local authorities. Face to face interaction remains highly effective and valuable in building influence on the ground and can offer significant potential for advantage over competitors.

Beyond relationships, value is also created in the knowledge gained by assignees working overseas, from insight into local customs and culture, improved language capability and a general understanding of how business is ‘done’ within the region and helping to adapt organisational protocol to suit the local environment. Combined with the assignee’s existing market and organisational knowledge, they can offer a global perspective with local details, bringing considerable potential to build competitive differentiation.

With clarity of objective, you can then consider whether an international assignment is the most appropriate solution. Is it possible to hire or promote locally? Would multiple, shorter trips be as effective in performance terms but with lower cost implications? International assignments demand significant investment and it will be important to assess cost projections against expected return and value to the organisation.

 

International assignment structures

 

As well as clarity of objectives, a successful international assignment also requires clarity of contractual terms, both to manage the expectations and understanding of the assignee, and also for the mobility team to identify support needs and potential risks.

Now more than ever, organisations are developing portfolios of mobility programmes to enable an agile approach to global mobility that responds to the organisation’s changing needs for international personnel mobility. Assignments come in increasingly different shapes and sizes, from permanent relocations or temporary exchanges, secondments or transfers to a different region or to a different organisation.

While organisations demand greater flexibility and agility from their global mobility programmes, underpinning the activity should be an appropriate assignment structure with a supporting contractual agreement that enables compliance with regulatory and legal duties.

When considering which structure to adopt, organisations will need to consider a range of factors including the type of assignment and the relevant environmental context such as regulatory, immigration, employment law, tax, pension implications.

For international assignments, where the employee is moving from the home country employer to a host country employer, the employer could consider a number of assignment structures, including:

 

• The employee continues to be employed solely by the home employer.
• The employment contract with the home employer is suspended for the duration of the assignment while the employee enters into a new employment contract with the host employer.
• The employment contract with the home employer is terminated with a promise of re-employment at the end of the assignment while the employee enters into a new employment contract with the host employer.
• The employment contract with the home employer is suspended and the employee enters into a contract with an international assignment company (IAC) within the employer group
• The employment contract with the home employer is suspended and the employee enters into a contract with both an IAC and the host country employer.
• The employee remains resident in the home country and works in a host country under a commuter assignment.

 

Each type of assignment structure offers advantages and disadvantages which should be considered in light of the individual assignment. For example:

 

• Do employment laws in the host country require the assignee to be employed by a local entity?
• Would the assignee be agreeable to ending their home country contract and starting a new agreement with a new entity in the host country?
• Are there terms in the home country contract that would need protecting in any new agreement, such as restrictive covenants?
• Which jurisdiction would prevail, the host or home country?
• How would local laws interpret a situation where there is no contract of employment with the employer in the host country?
• Issues such as income and corporate tax, pension and employment rights and responsibilities will need to be identified and assessed against the specific assignment objectives and budget and the assignee profile and circumstances.

 

 

Employment law

 

Employment law implications come hand-in-hand with selecting an appropriate assignment structure.

Home-country employment contracts for employees on assignment from the UK to an overseas jurisdiction should generally be interpreted under the laws of England and Wales. If a host country contract is used, there should be specific provision in the agreement to determine which jurisdiction would prevail. However, neither position is guaranteed, for example where issues of domicile arise which may supersede any contractual provisions. Again the need is to assess on an individual assignment basis.

As well as explicit contractual considerations, employers should also be aware of any statutory rights or implied terms under UK law that may continue to apply even in the host country.

Specific provisions may also need to be made to ensure confidentiality and appropriate handling of commercial and sensitive information. While this may be standard or expected for senior employees, those on assignment should also be considered for such terms relevant to the type of assignment and the commercial objectives of the project.

 

Immigration options

 

Successful international assignments will invariably require careful consideration of the immigration requirements. Governments across the globe are adopting increasingly protectionist stances towards economic migrants, as policies seek to favour domestic workers. This means business travellers and visa holders are now facing greater scrutiny when applying for work visas and when trying to gain entry at the border.

Visa options and criteria vary between countries and are subject to frequent change. Where permission is required for the assignee to work in the host country, it will be important to ensure the assignee applies for the most appropriate route to meet the assignment need, whether that is a work permit or a business visitor visa. The immigration requirements and options will be determined in most part by the rules of the home and host countries, the nationality of the assignee (and any of their dependants who will be joining them overseas) and the nature of the activities the assignee intends to perform during their time in the host country.

For example, a British citizen may be eligible to travel to the US to attend sales meetings and work conferences for up to 90 days without having to apply for a visa but to conduct ‘gainful employment’ they would need to look at a specific work visa, such as the L-1 visa for intracompany transfers.

A further factor will be the specific requirements of the visa or permit. Work visas, for example, may require sponsorship of the employee by a local entity with valid sponsor status. The application process for work visas are typically resource-intensive and in many cases will require the employer to provide compelling evidence as to why the role or work cannot be performed by a worker resident in the host country.

Preparation will, therefore, be critical, ensuring there is sufficient time to consider the relevant immigration options in light of local rules, and to then make the required application. Complications may also arise where the employee does not meet certain requirements under the local rules, for example if they have a past criminal conviction or negative immigration record. This will require careful handling and, depending on the host country’s rules, may require submission of a visa waiver to explain the issue and provide assurances of the employee’s eligibility by requesting a discretionary decision on the application.

 

Assignee remuneration

 

Relocation packages are typically the biggest expense associated with an international assignment. While cost control will remain a concern, it is important for employers to ensure they are offering packages that are competitive within the market and that the package will support both the commercial objective of the assignment and compliance with associated legal and tax risks.

Home-based packages remain common, including those which may be markedly above local market compensation levels, particularly in circumstanecs where the assignment need is business-critical.

It may be possible however to look at offering a lower package than the home-based option, by either localising the package to harmonise with host nation levels or to develop a ‘local-plus’ offering that maintains a degree of competition, but this can be challenging to apply consistently across all assignment types and locations.

Again, consideration should be given to the individual assignment and the assignee. Millennial workers for example are generally understood to value international experience and the remuneration package may not be their primary concern where the opportunity for overseas exposure is available.

For organisations with a substantial cohort of international assignees and travellers, it may be more appropriate to build a compensation scheme specifically for globally-mobile personnel.

Importantly, assignees who will remain under an employment contract in their home country may continue to be subject to home country payroll while on assignment. This will also enable pension and benefits to be offered in the same way through the home country. Taxation, however, raises more complex issues, for example where withholding rules apply in the host country. This will require specialist guidance to ensure tax liabilities in the home and host country are correctly managed and met withiin the appropriate timeframes.

 

Need assistance?

 

International assignments are demanding on the employer and the employee, but have become critical given the business imperatives to meet talent and development needs and achieve competitive advantage.

Employers should not lose sight of the need to understand the specific risks of each individual assignment, which increasingly demand bespoke solutions. While compliance, efficiencies and cost control should be underpinned by a solid global mobility infrastructure of policies, systems and procedures, the current shift is away from a uniform approach to assignment management, instead moving towards more agile management of each assignment, shaped by the specific assignment objectives, budget and risks in relation to immigration, tax, remuneration and employment law.

DavidsonMorris’ specialist global mobility consultants provide expert guidance to employers on all aspects of international assignments, from programme management and implementation to strategic consultancy to ensure value and return on the mobility investment. We understand the commercial drivers behind mobilising workers and the need to ensure compliance without impacting return on mobility investment.

We work with senior management teams, HR and mobility professionals to develop strategies that ensure effective compliance risk management while supporting delivery of the organisation’s global mobility objectives. For advice on making the most of international assignments, speak to us.

 

International Assignment FAQs

 

What is an international assignment?

An international assignment is when an employee is temporarily relocated to work in another country on behalf of their employer. These assignments can vary in length and purpose, ranging from short-term projects to long-term placements or even permanent moves.

 

How long do international assignments typically last?

The duration of an international assignment can vary greatly. They can be as short as a few months or extend to several years. It depends on the needs of the business and the specific goals of the assignment.

 

Do I need to provide cultural training for employees going on international assignments?

Cultural training is highly recommended. It helps employees adapt to the cultural nuances of the host country, improving their effectiveness and reducing the risk of culture shock. This training can also support better communication and integration within the local team.

 

What legal considerations should I be aware of for international assignments?

There are several legal considerations, including obtaining the correct work visas and permits, understanding employment laws in the host country, and ensuring compliance with both UK and local regulations. It’s crucial to consult legal experts to avoid any pitfalls.

 

How can I support employees and their families during an international assignment?

Supporting employees and their families involves providing relocation assistance, helping with accommodation and schooling, offering language courses, and ensuring access to healthcare. Regular check-ins and a clear repatriation plan also help maintain their well-being.

 

What is the process for repatriating employees after an international assignment?

Repatriation involves planning for the employee’s return to the UK, both in terms of logistics and reintegration into the workplace. It includes arranging their move back, addressing any reverse culture shock, and ensuring they have a clear role and support upon their return.

 

How can I measure the success of an international assignment?

Success can be measured through various key performance indicators (KPIs) such as the achievement of business objectives, employee satisfaction, skill development, and the impact on the company’s global operations. Regular reviews and feedback from the employee and host team are also essential.

 

What risks are associated with international assignments?

Risks include geopolitical instability, health issues, and the potential for the assignment to fail if the employee cannot adapt. Mitigating these risks involves thorough planning, offering support systems, and having contingency plans in place.

 

Is it necessary to have a contingency plan for international assignments?

Contingency planning is vital to address any unexpected issues that may arise during an international assignment. This includes plans for emergency evacuation, alternative work arrangements, and ensuring continuous support for the employee and their family in case of unforeseen events.

 

 

Glossary

 

Term	Definition
International Assignment	The temporary relocation of an employee to work in another country on behalf of their employer.
Global Mobility	The practice of managing the movement of employees across international borders for work assignments.
Tax Residency	The status of an individual that determines their tax obligations in a particular country.
Double Taxation Agreement	A treaty between two countries that prevents individuals from being taxed twice on the same income.
Work Visa/Permit	An official document that allows an individual to legally work in a foreign country.
Cultural Training	Education provided to employees to help them understand and adapt to the cultural differences of the host country.
Repatriation	The process of returning an employee to their home country after completing an international assignment.
Key Performance Indicators (KPIs)	Metrics used to evaluate the success and effectiveness of an international assignment.
Relocation Assistance	Support provided by the employer to help employees move to another country, including housing, transportation, and more.
Reverse Culture Shock	The psychological and emotional adjustment experienced by employees when they return to their home country after an assignment abroad.
Contingency Plan	A backup plan designed to address potential risks and unforeseen events during an international assignment.
Compliance	Adhering to local and international laws and regulations during an international assignment.
Geopolitical Risk	The potential impact of political instability or conflict in the host country on the assignment.
Global Talent Development	Strategies for enhancing employee skills and capabilities through international experience.
Cost Forecasting	The process of predicting the financial expenses associated with an international assignment.