Payroll Challenges: What to Consider When Paying a Global Workforce

Huge opportunities exist when a company decides to pursue global expansion: new markets, new audiences and access to a larger talent pool. But expanding your organization’s geographic reach doesn’t always mean opening an office or branch in a new country. Sometimes, it’s hiring talent in the new market or relocating a current employee.   

This might seem easy, but cultural and legal nuances require up-to-date local knowledge to stay compliant in managing your global team. And if you’re planning on expanding into multiple countries, the challenge becomes even bigger. For example, expanding into the UK, France and Brazil requires understanding the types of employees you’re hiring and each market’s distinct employment and payroll laws. 

Correctly Classify Each Employee 

First, you must define the relationship between the company and the employee. Are you hiring talent as a full-time team member or an independent contractor? The two differ in terms of payment, benefits, taxes and more. Hiring a contractor offers more flexibility to the working relationship, while hiring an employee gives employers more control of day-to-day tasks. It’s essential to classify employees correctly to avoid legal repercussions.

Classification Considerations: 

Comply with Local Laws 

Once you understand how each employee fits into the company, you’ll need to understand the local labor laws of every market that houses your employees. At best, keeping up with these regulations can be daunting. Employment contracts, salary requirements, working hours and holidays vary from country to country. 

For example: 

• Under French Law, an employee who can’t work due to illness will likely have their employment contract suspended. 

• Employees in Brazil are entitled to 15 days of sick leave per year.   

• Eligible employees receive up to 28 weeks of paid sick leave per year in the UK. 

The administrative work required for staying abreast of each of these regulations can be overwhelming, but noncompliance with local laws can damage your business and often result in hefty fines. 

Compensate with Confidence 

This is where a Direct Employer of Record (EOR), like Atlas, can help. With entities in more than 160 markets—including France, the UK and Brazil—our Direct EOR model allows us to help you hire employees under our legal entity on your behalf. As the legal employer, we can onboard new talent, manage team members and take care of essential payroll and HR administration tasks.  

Our tech-enabled solution makes it easy to manage and pay your people all over the globe. As a result, we reduce your time spent on HR and related admin, freeing you to focus on your business. 

• Atlas software simplifies HR admin, employee management and payroll management processes with a secure, intelligent, tech-enabled solution. Paying employees in multiple markets is simple, safe and smart.   

• Our platform is complemented by the market intelligence and up-to-date insights on tax and regulatory compliance needed to hire and manage global talent. Localized expertise helps companies navigate the complexities of international HR, payroll and local laws based on your unique business needs.  

• Our Account Managers are available to provide real-time data, insight and analytics when you need them.