Today’s guest blogger is Eric Snethkamp, global channels & strategic alliances manager for SafeGuard World International. For nearly a decade, organizations around the world have relied on SafeGuard World for their global HR needs, specifically around payroll and employee compliance. SafeGuard World is an Alliance Partner of NPAworldwide.
In international business, compliance can seem like a minefield. It is layered with complexities spanning employment and payroll practices where regulatory missteps can have serious implications. Consider the following scenarios that often unfold when companies set up shop in foreign countries:
- Regulations are usually documented in the native language
- Social expenses and tax calculations are unfamiliar and often confusing
- Banking processes can be undependable
- Diverse cultural and business approaches are difficult to adopt
- Different time zones and currencies make transactions more complex
A Crash Course in Compliance
Minimizing the risks and costly penalties associated with global employment and payroll practices requires specialized knowledge.
Compliance for multinational companies is a priority that begins with the global employment process. Companies are responsible for registering or deregistering employees with the appropriate authorities to ensure their right to work in a particular country. Organizations must obtain the appropriate visas and paperwork for every employee, and they need to register them for the appropriate social and company-affiliated programs. There are also different rules that mandate the specific types of data a company is permitted to maintain for its employees.
Compliance with various tax codes is another multi-faceted area of concern for global organizations. While all countries offer tax relief and require similar documentation for filing, each country is different when it comes to the following tax laws:
- Every region has particular rules for how taxes are calculated
- There are numerous processes to work through to determine which types of tax filings are required
- Tax filing deadlines can vary, as can the timeframes for filings to be withdrawn or adjusted and resubmitted. It is extremely difficult for organizations to stay current with regulatory changes and implement them seamlessly.
With any new change that may arise, they must answer the following questions:
- Do the changes apply to our organization and our current environment?
- What must we do across the board with each particular change?
- Are the changes retroactive?
- Can we catch up on these changes later?
- What is the best way to manage these changes?
Simplify with Support
Maintaining employment data and tax information in-house within a single environment is an additional challenge for multinational companies. Organizations that work with a global managed payroll provider, however, gain unified access to the diverse tools needed to maintain compliance. The right provider will also maintain a network of experts in countries throughout the world for clients to tap into to gain the critical information they need to conduct business lawfully. It is clearly advantageous for companies to seek support from global payroll providers who employ experts in all the countries in which they operate.
If your company is struggling to achieve compliance on a global scale, choose a global payroll provider with a wealth of knowledge about country-specific HR and tax regulations. The provider you choose should have a global network of in-country experts selected according to stringent criteria and a robust vetting process, with continuous reevaluation of performance. Only with resources like these can your organization mitigate global employment risks.