What Is a Professional Employer Organization (PEO)?
A Professional Employer Organization (PEO) leases employees, shares employee-related responsibilities, and manages employee-related liabilities for employers. To outsource their human resource functions, employers must enter a joint employment relationship with PEOs.
In this relationship, the PEO is responsible for payroll administration, employee benefits, compensation, employment taxes, workers' compensation, and other employee-related processes.
All employers have to do is report their wages under the PEO's FEIN (Federal Employment Identification Number) for the employees they hired with the help of the PEO. This allows employers to benefit from economies of scale with more affordable employee benefits.
In a joint employment relationship, the responsibility of employee liability is shifted entirely to the PEO. Here are a few responsibilities to which a PEO agrees:
- Recruiting and hiring
- Benefits administration
- Payroll administration
- Drug testing programs
- Unemployment administration
- Compliance assistance
- Workers' compensation administration
- Family and Medical Leave Act administration
Depending on the contract, employers can outsource nearly all of their HR functions to a PEO. In addition, companies that want to benefit from the outsourcing aspect without losing control of their employment processes can choose an administrative services outsourcing (ASO) agreement instead.
Hiring a PEO becomes crucial to maintaining compliance with foreign labor laws when it comes to expanding and building international teams. Companies wanting to hire from Belarus may benefit from the outsourcing provisions of a PEO.
The country has an extremely high literacy rate of 99.87% for ages 15 and above, leaving much potential in Belarus for building international teams. In addition, there are approximately 260k graduates per year in Belarus. So, it's safe to say that doing business in Belarus will be profitable, and a PEO Belarus is the best way to ensure that.
Remember not to confuse a Professional Employer Organization Belarus with an Employer of Record Belarus. While the PEO takes a co-employment approach, the EOR Belarus is the legal employer on paper.
Benefits of Using a PEO in Belarus
Here are a few benefits of using a PEO in Belarus that will help you improve the recruitment process and optimize daily business operations.
Improved Employee Experience
PEOs in Belarus improve the employee experience by optimizing the onboarding process for current and new employees. In addition, the organization provides all resources necessary to create fair and lawful employment contracts that compensate employees appropriately. That includes fixed-term contracts and open-ended employment contracts.
Compliance With Employment Laws
PEOs help you maintain compliance with employment laws specific to Belarus. As a result, you can avoid penalties and fines and compensate your employees lawfully.
PEOs in Belarus won't only help you save money during recruitment, but you will also benefit from a cost-effective expansion. These organizations are familiar with the ins and outs of Belarus and its economy, knowing exactly how to keep your international operations under budget.
Strategic HR Planning
PEOs help companies with strategic HR planning, eliminating the need for an onsite HR and legal team in Belarus. Instead, these organizations handle your contract renewals, terminations, annual leave management, HR, and strategic guidance specific to the team.
Payroll processing gets much easier, quicker, and simpler with the help of a PEO when they take care of all the payroll outsourcing responsibilities. In addition, they manage social security payments, Belarus corporate tax rates, and other required contributions to Belarus.
Rapid Market Entry
PEOs help make your entry into the Belarus market smooth and successful by helping with Belarus company registration. This way, you can start operating your business and hiring employees within a few business days.
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Hiring in Belarus With a PEO
Here's all you need to know about hiring in Belarus with a PEO. The PEO will take care of the following factors and more.
Most employment contracts in Belarus are implemented for a 5-year fixed term, project-specific fixed term, seasonal work duration, or temporary term to cover an absent employee. Employers must write these employment contracts in Belarusian and specify the salary in Belarusian ruble instead of foreign currencies.
Belarus's work hours last 40 hours across five days and 8 hours per day. In addition, overtime is only allowed with the employee's consent if the employee is appropriately compensated. Overtime cannot exceed 10 hours a week, and a working day in Belarus cannot exceed 12 hours, including overtime.
Nine public holidays are celebrated in Belarus per year, which are:
- New Year's Day
- Orthodox Christmas
- Women's Day
- Labor Day
- Victory Day
- Independence Day
- October Revolution Day
- Catholic Christmas Day
Meanwhile, their vacation days are limited to 24 business days per year.
Employees in Belarus are entitled to 80% of their pay for the first 12 sick leaves and 100% for any sick leaves after. This payment is funded by the Social Security System of Belarus.
Female employees in Belarus are entitled to 127 days of paid maternity leave or 140 days for twins or medical complications. In addition, she is entitled to 3 years of unpaid maternity leave, which can be extended if she has another child during that duration. Fathers are entitled to 14 days paternity leave; whether this leave is paid or unpaid is determined by employee/employer contract.
All Belarusian employees are entitled to public health insurance alongside additional health insurance provided by employers.
Employees in Belarus' IT sector are entitled to lower Belarus income tax rates, higher salaries, and Western-style benefits.
There is no legal requirement for bonuses in Belarus, but most employers offer a 13-month bonus as gratuity.
Employers in Belarus must detail a probationary period that does not exceed three months. In addition, the employee must give at least one month of notice if they initiate the termination. Furthermore, employers may terminate employees without notice in certain cases. Lastly, employees are entitled to 3 months of severance pay after being dismissed.
The Social Security System of Belarus finances most of the sick leave and parental leave payments, but the employer must contribute 6% to family allowances, funeral grants, and unemployment benefits.
Employers are required to contribute 0.3-0.9% to Worker's Injury benefits and 28% to old age, disability, and survivor pension.
PEO Services Belarus
Hiring a PEO in Belarus to help you in the recruitment and expansion process will help you in the long run. In addition, the organization handles most of the HR and legal team's responsibility, saving a lot of your company time and money.
You may think hiring a PEO requires you to give up control of your business operations, but that's not the case at all. PEOs only work as co-employers and don't interfere with any business operation that doesn't involve employment.
The main purpose of PEOs is to help you make smart employment decisions and build a better international team. Here are a few do’s and don’ts of a professional employer organization:
- Offer comprehensive HR services for employers
- Manage payroll processing, risk management, HR compliance, employment tax, employee benefits, and time and attendance management
- Minimize liability for state unemployment taxes, payroll taxes, and payment of wages
- Aid with employee recruitment
- Reduce employee turnover
- Optimize the business for current and potential employees
- Save time on daily business operations
PEOs Do Not
- Provide labor to your worksites
- Make recruitment and termination decisions
- Control your daily business operations
Why You Should Use a PEO in Belarus
Several legislative acts and regulations govern the relationship between an employer and an employee in Belarus. That includes the Constitution of the Republic of Belarus, the Labor Code, laws on trade unions, and the law on external labor migration.
PEOs help you hire and pay employees in compliance with these acts, laws, and regulations. In addition, they manage all your contracts and legal papers regarding employment, ensuring every clause adheres to the appropriate law.
As a result, your business saves hundreds on a separate HR or legal team for employees. In addition, the cost of living and employment is low in Belarus, allowing you to build an international team on a budget.
A PEO helps you ensure all your employees in Belarus are being paid and compensated appropriately and lawfully for their labor. That includes bonuses, increments, paid leaves, etc.
Over 95% of the employed population of Belarus belongs to a trade union. The tariff structure determines the monthly salary and is based on collective labor agreements, labor remuneration agreements, and labor contracts.
It's important to keep the aforementioned standards of employment in mind while hiring from Belarus. That includes employment contracts, work hours, holidays, sick leave, parental leave, health insurance, benefits, bonuses, termination, and the Belarus tax rate.
PEOs ensure that your employment contracts and work environment adheres to these standards, reducing employee turnover in the long run.
Use a PEO To Expand in Belarus Without a Legal Entity
Expanding your business or hiring employees in a new country can be intimidating, especially in countries like Belarus, where employment laws are strict. Aside from the cost of time and money, you may also be subject to penalties and fines if your business doesn't adhere to the right labor laws.
Skuad is the perfect example of a PEO that will help you hire and pay your employees in Bosnia and Herzegovina. Whether it's onboarding new hires, running global payroll securely, complying with local employment laws, or managing benefits, work permits, timesheets, and more, Skuad will handle the necessary employment responsibilities.
Sign up now to expand your business to Belarus without a legal entity.