An Overview of Global Employee and Independent Contractor Benefits

An Overview of Global Employee and Independent Contractor Benefits

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Introduction

With the surge of demand for remote work come globally expanding companies looking to hire remote staff and pay them due compensation and legally mandated benefits. Human resources outsourcing companies such as Skuad can help companies looking to hire international employees, and contractors find qualified candidates eager to fill remote roles.

Companies can develop a comprehensive benefits package to attract and recruit the best local talent in any particular country. These benefits packages can include all the legally mandated benefits, supplementary benefits, and perks. The benefits can add to an overall compensation package to attract employees ready to join your globally expanding company.

What Are Employee Benefits?

Employee benefits can be separated into two distinct groups: statutory benefits, which are mandated in labor laws, and supplemental or voluntary benefits. Statutory benefits are those that all companies must provide for their employees by law. Employers must make contributions that pay for certain government programs such as social security and numerous insurance programs such as health insurance, unemployment insurance, and worker’s compensation or work injury insurance.

Statutory benefits vary by country and may include the following:

  • Pension plans
  • Annual leave entitlements
  • Maternity leave
  • Sick leave
  • Personal leave
  • Healthcare
  • A minimum wage
  • Discrimination protections
  • Termination protections

Together they represent the minimum compensation package employers must provide employees. They include a nationally mandated minimum wage, leave entitlements, insurance, which the employer partially pays, social security and pensions contributions, which are also partially paid by the employer, and termination protections such as a minimum notice period and the prohibition of being fired without cause.

In order to be competitive and attract suitable candidates, employers can go beyond the minimum and offer a more favorable benefits package. The additional benefits are called supplemental or voluntary benefits.

Independent Contractor Benefits

Depending on the country and its labor code, independent contractors generally do not receive benefits mandated by law, nor are they generally protected by some of the same benefits as employees.

Usually, when a company contracts with a freelancer, the relationship is viewed as two business entities making a transaction rather than an employer hiring someone. Contractors sell their labor as a service and can charge what they want for their services. They are, therefore, not protected by a minimum wage.

Using the United States, self-employed freelancers file income tax and pay self-employment taxes, including the employer portion of social security taxes. Employees pay unemployment tax that funds unemployment insurance. Freelancers do not pay that tax.

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International Employee Benefits Examples

In most countries, there is a minimum amount of statutory benefits provided to employees. The mandatory benefits differ by country; details are spelled out in each country's labor laws. If your company is expanding globally, it is imperative to know the laws governing benefits in each market you plan to hire.

The statutory benefits below are examples that illustrate the range of benefits  proffered. They relate only to employment within a particular country’s borders.

Wherever you are hiring, you must fully understand the scope of local law and regulation, staying compliant and out of legal trouble. Either invest in a team of legal experts or work with an employer of record to remain in compliance with benefits mandates and all the other complex and ever-changing labor laws.

Statutory Benefits Requirements By Selected Countries.

Portugal

Portuguese laws required employers to pay employees a minimum wage, leave entitlements, pension plans, worker’s compensation, wage guarantee in case of company bankruptcy, and a daily meal allowance.

Entitlements required by Portuguese law:

Turkmenistan

According to Turkmenistan law, employers must provide employees with the following:

  • A minimum wage
  • Overtime
  • Mandatory daily and weekly rest periods
  • Public holidays
  • Annual leave entitlements
  • Maternity leave
  • Sick leave
  • Adoption leave
  • Childcare leave
  • Donor Leave
  • Additional leave for students, weddings, bereavement, and teachers
  • Unemployment insurance
  • Termination protections
  • Non-discrimination protections

Oman

The laws of the Sultanate of Oman require employers to provide employees with the following:

  • A minimum wage
  • Overtime protection
  • Social security
  • Work injury insurance
  • Annual leave
  • Sick leave
  • Maternity leave
  • Emergency leave
  • Special leave for marriage, bereavement, the Haj pilgrimage, and student exams
  • Termination protections
  • Severance pay
  • Notice periods

Saint Vincent and the Grenadines

The laws of Saint Vincent and the Grenadines require employers to offer employees the following:

  • A minimum wage, depending on the employee’s role
  • Social insurance
  • Public holidays with double pay if work is commenced
  • Overtime protections
  • Annual leave, depending on the industry
  • Sick leave depending on the industry
  • Maternity leave
  • Termination protections and restrictions
  • Notice periods
  • A limit on probationary periods

Different Types of Voluntary Employee Benefits

Voluntary benefits are benefits a company can choose to provide to employees above and beyond what the law mandates. These are also known as supplementary benefits. They can include employee perks you offer to your staff to attract and retain the most qualified and talented employees.

According to a recent survey, some of the most desired supplementary benefits include flexibility, more paid time off, and paid family leave. Employers can provide more time off to employees for a better work/life balance, which can be difficult even for remote workers, especially if employees are working beyond typical hours. Offering more paid vacation time can help retention of employees, increase productivity, and decrease employee burnout.

Healthcare and retirement benefits are among some of the most sought-after employment benefits. Even in nations where healthcare is mandated for employers or provided by the government, supplemental health coverage can be added above the minimum coverage.

Supplementary benefits can also include the following:

  • Dental and vision insurance
  • Disability coverage
  • A 13th -month bonus
  • Supplemental pension plans
  • Life insurance policies
  • Death service benefits
  • Career development training
  • Equipment allowances
  • Use of company cars
  • Childcare vouchers
  • Ergonomic office equipment
  • Meal vouchers
  • Gym allowances
  • A flexible work schedule

Why Invest in a Strong Benefits Package?

A strong benefits package is essential to any company’s global recruitment strategy. It can be the incentive necessary to attract the most talented and motivated employees to join your team and, perhaps most importantly, stay on the team.

When developing an employee recruitment strategy, companies should consider what they will budget toward employee compensation and benefits packages to attract and retain the best and most talented employees. In the competitive global labor market, your recruitment strategies won’t go far if you are offering the bare minimum.

When you offer a strong benefits package, your company and your advertised remote role can stand out among the crowd of global employers vying for the attention of the same qualified and motivated potential applicants.

How To Create an Employee Benefits Package for Your Team

When you work with an international employment service Skuad, you can offer basic compensation and benefits and develop an attractive supplemental package to appeal to top candidates. An employer of record can assist you in crafting your benefits offering and administering your selections to remote employees. That isn’t the only option to administer benefits.  A professional employer organization can also take care of whatever supplemental health insurance and other benefits you opt to add to your packages to attract and retain the best employees.

How To Calculate Employee Benefits

Certain benefits, such as leave entitlements, are sometimes based on seniority in the company. Employees at the company for a longer tenure may be entitled to an annual or sick leave increase. In many countries, the leave entitlements start after a certain amount of time since an employee has joined the company. After that time, an employee may be entitled to a certain amount of leave and be entitled to more leave days per year for every year of employment with the company.

Benefits can be calculated as a percentage of the total salary. Divide the annual benefits expense by the annual salary to get the benefits as a percentage. Although the percentage will vary by company, benefits typically constitute 32% of the total compensation.

Get Started With Skuad

Skuad is a global human resources outsourcing platform helping companies expand globally by hiring the best remote international talent. Companies can easily hire international employees and pay independent contractors in over 160 countries and pay them in over 100 currencies, with accurate and timely payroll, benefits administered, and global compliance ensured all in one platform.

Skuad can help your company:

  • Hire and onboard new hires
  • Offer competitive compensation and benefits
  • Pay independent contractor invoice payments
  • Ensure all mandatory benefits are provided to your staff
  • Provide supplemental benefits and perks
  • Calculate employee benefits cost
  • Process payroll and taxes

Skuad can offer your company the best employer of record experience. We can help your company hire and pay international employees and independent contractors around the globe in one easy platform. Book a demo today to see how our employer of record services work and how you can offer the most comprehensive benefits packages to attract the best global talent.

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