Step by Step Guide to Hiring Global Employees in the United States

Do you want to engage global recruitment solutions to add value to your organization’s workforce? This article will answer all your questions about the benefits, requirements and processes of hiring international employees in the US.

In 2022, it is easier than ever before to engage global talent to grow your business. Thanks to technology and the emergence of new job markets, international recruitment tools are enabling organizations to seamlessly build dynamic global workforces. Hiring global employees can deliver on a wide range of benefits, such as accessing a larger, more qualified and more diverse talent pool, lowering labor expenses, expanding business offerings internationally, and localizing products and services. 

Do you want to engage global recruitment solutions to add value to your organization’s workforce? This article will answer all your questions about the benefits, requirements and processes of hiring international employees in the USA.

What are the advantages of hiring global employees?

The benefits of engaging global talent are multifold. With global recruitment, you can source the most skilled workers in your industry across the world. Your organization could thus benefit from global insights and unique skills, which could help to enhance localized offerings and effectively enter new markets. Further to this, a global contingent workforce can offer the flexibility you need to quickly respond to capacity requirements and skill gaps. 

Beyond the plus points of accessing a wider pool of job seekers to increase the chances of finding the most qualified and best suited candidates for the position, global recruitment can positively contribute to workplace culture in terms of productivity, creativity, diversity, inclusion and representation. Hiring a more diverse workforce will help to foster an inclusive and rewarding professional environment. Building your team with employees from different backgrounds will add global innovation to your workplace to support problem solving and creative thinking. Your organization can also benefit from specialized knowledge of foreign markets and languages. 

What are the risks of hiring global employees?

While global recruitment offers plenty of benefits for companies in the USA, there are several risks to consider. Worker misclassification, compliance issues, failure to comply with labor laws, and unaddressed tax obligations can lead to major problems in the process of hiring and paying foreign employees. Whether you are hiring foreign workers in their home countries or relocating employees to the United States, make sure you comply with all global employment requirements to avoid penalties and more severe legal consequences. 

When hiring overseas workers in their home countries, your organization must register a local entity in the relevant country to ensure full compliance with local labor laws. To simplify this step, a third-party employer of record can be engaged to serve as the local entity in any country outside the USA. This will allow you to hire global employees from anywhere in the world. When hiring global employees with the prospect of relocating them to the USA, additional logistical matters such as visa applications, legal work permits, and relocation compensation packages must be considered. 

Worker misclassification is one of the biggest missteps an employer can take when hiring global employees. All workers must be classified either as an employee or a contractor. Many employers misclassify workers to benefit from lower labor costs and tax payments. When a company misclassifies an employee as an independent contractor for tax and legal purposes when they should have been classified as a permanent employee, the organization is putting itself at financial and legal risk with the possibility of an audit, misclassification lawsuit, fines, penalties, litigation expenses, and worker settlements. Worker misclassification risks can be absolved by enlisting professional contract management services from a Professional Employment Organization (PEO) to ensure full compliance with employment laws and tax requirements. 

The global payscale is another important factor to consider when hiring international employees. The employer should evaluate the payscale and the cost of living in the employee’s home country to ensure fair compensation in their own currency. In the case of relocation to the United States, foreign employees must be paid according to local remuneration standards. The relevant tax laws of both the USA and the employee’s home country should be followed.

How can US companies recruit and hire international employees?

Companies and organizations in the United States can hire foreign workers as full-time employees or independent contractors, either working remotely from their home country or relocating to work in the USA. Global employees who are relocating to the United States must be in possession of the correct labor certification and working permit. 

Employers in the USA can apply for the relevant certification documentation from the US Department of Labor. To apply, the company must provide evidence for the need of a foreign employee as well as the ability to pay the worker the required wage. The occupational requirements of the position that is being hired for will determine whether Permanent Labor Certification, H-1B, H-1B1, and E-3 Speciality (Professional) Workers Certification, H-2A Temporary Agricultural Program Certification, or H-2B Certification for Temporary Non-Agricultural Work will be needed. Once the application for certification for a foreign employee has been approved by the Department of Labor, the employing company can start sourcing global candidates. 

The next step is to apply for the relevant work visa for the selected candidate from US Citizenship and Immigration Services. The most common US work visas available for application include L visas for specialized workers, E visas to transfer qualified workers, H visas for temporary foreign workers, and P visas for fulfilling temporary engagements in the USA. Foreign employees who are already located in the United States can use Form 1-9 to verify their work authorization. A candidate who is not already located in the United States will require a sponsored visa from the employing company. 

How can US companies pay foreign employees?

Working hours, payment instalments, employment benefits, tax regulations, currency conversion rates, and the regulatory bodies and laws of the relevant foreign country must all be taken into consideration when calculating the payment structures of international employees. All international employees working in the United States must apply for a social security number and must adhere to the US tax rates of 30%. Non-US tax residents can claim tax treaty benefits by using the W-8 forms to prove their foreign status.

US companies can pay global employees by setting up their own entity in a different country, or by establishing a subsidiary in the relevant foreign country if the number of employees in the country justifies the time and cost of completing this process. Remote payment options such as an international bank transfer, an international money order, or digital wallets like TransferWise or PayPal can be used to pay foreign workers who are based in their home countries. 

Alternatively, and more conveniently, US companies can work with an Employer of Record (EOR) to administer all foreign employment matters on their behalf. The services provided by an EOR can simplify the process of sourcing, onboarding and managing global workers while ensuring full compliance with local employment laws and tax requirements. 

Outsourcing global recruitment solutions will help to overcome all risks and challenges in the hiring process, including compliance concerns, varying tax regulations and labor policies, language and communication barriers, employment contract and compensation negotiations, international payment systems, currency conversion, onboarding costs, and relocation assistance. 

 

CXC is a global HR outsourcing organization with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks

Contact CXC today to start enabling your future workforce.

 

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