Arden T. Ng President Blueback Global, Inc.

18 Pages·2013·1.06 MB·English

by  A Ng

Silicon Valley Women in HR
“Global HR Business Practices”

March 20, 2013

Presented By:
Arden T. Ng
President
Blueback Global, Inc.
© Blueback Global, Inc. 2013. All Rights Reserved
Agenda

6. Recent Developments 1. Introduction
5. Onboarding and 2. Sending Employees
Termination Overseas
3. Hiring Locally –
4. Managing the Global
Contractor or
Employee
Employee
© Blueback Global, Inc. 2013. All Rights Reserved Page | 2
Introduction

|Singapore | |Paper plant|
|Silicon Valley |
| Audit | |Shandong | Global travel |
| Technology |
| CPA | China |
- Exploring the unknown, conquering the challenges
- Global business initiatives: International operations set up and management, sales
operations reviews, business risk management and channel management
- International business International Finance, Tax, HR, Entity Structuring and Cash
Repatriation issues
- No part of the world works the same way
- People, Process and Technology
© Blueback Global, Inc. 2013. All Rights Reserved Page | 3
Introduction

About Blueback Global, Inc.
- Minimize complexity of managing global accounting, business process and HR requirements
- Gateway to major markets: Asia-Pacific: Australia, China, Hong Kong, Japan, Korea, Philippines,
Singapore, Taiwan; and Europe
- Quality service - Feel like you’re the only client we serve

Our Core Services:
1. GO
- Planning entry into new markets and countries. Help assess the entity type, tax structure,
HR/resource management, market knowledge
- Feasibility study: risk factors, governmental attitude, local culture and acceptance
2. Grow
- Becoming operational – entity setup, HR administration, accounting and finance support,
and meeting regulatory requirements
- Develop employment contracts, social security setup, employee recruitment and retention
3. Glow
- Continue to develop and expand within markets. Repatriation of cash/profits
© Blueback Global, Inc. 2013. All Rights Reserved Page | 4
Sending Employees Overseas

Imagine that you receive this request:

“HR team, the Company is sending an executive to China next month, for 3 years. Help!”

Now what?
Immigration
Tax Planning Support
Payroll – Home or Host
Compensation
International Benefits/Social Security
Global Mobility Policy
Softening the Cultural Shock
The Move and Paperwork
Welcome back
© Blueback Global, Inc. 2013. All Rights Reserved Page | 5
Sending Employees Overseas –

A Case Study

Case Study – When the Unexpected Happens
In 2011, an educational institution identified a U.S.-based employee to go to Hong Kong
to set up its Asia admissions office in Hong Kong.

Key events:
- Employee “leaves” the U.S. entity in January 2012
- Becomes an employee of the local Hong Kong subsidiary in February 2012
- 12 month work visa
- Employer enrolls the employee into its U.S. Global Insurance program
- Two month in Hong Kong, the employee suffers a devastating stroke and is
permanently disabled. Employee requires long term intensive care

Key Challenges:
- Employee wants to return to U.S. for treatment; requires a medical plane ($30K)
- By leaving Hong Kong, terminates from Hong Kong entity; loses Hong Kong benefits
- Within 90 days after terminating in Hong Kong, Global Insurance coverage ceased.
- Becomes medically unfit for work, U.S. Insurance would not underwrite her insurance
coverage.
© Blueback Global, Inc. 2013. All Rights Reserved Page | 6
Hiring Locally – Employee or Contractor?

Elements Things to Consider
Costs - Agreements are needed, a commercial contract
- Must be properly drafted
- Contractor fees similar to an equivalent employee
- Benefits and social security protection
- Severance payments for employees
Timing - Contractor is generally easier to onboard
- Contractor may be fixed term or open term
- Employee is usually open term
- Termination of employee regulated by local laws; notification
Relationship - Contractor arrangement allows the employer to assess
Management performance and fit
- Good contractor may not want to be contractor for long term
- Contractor has no formal structure in place and no benefits
© Blueback Global, Inc. 2013. All Rights Reserved Page | 7
Hiring Locally – Employee or Contractor?

Elements Things to Consider
Risks - De-facto employment relationship is formed
- Permanent Establishment (“PE”)
- Personal income tax evasion by contractor may implicate the
Company
Obligations - Company is not responsible for payroll withholding taxes or
social security payments for contractors
- Compliance with tax and employment laws in country
Contractors - Speed is important
- Duration is short term
- Informal relationship
- “Probationary” assessment of mutual fit
- Market feasibility
- Specialized skill set
Employees - Longer term view
- Retention is important
- Customer perception
© Blueback Global, Inc. 2013. All Rights Reserved Page | 8
Common Attributes of a Contractor

Degree of control is less than that over an employee
No benefits extended – no leave, no pension, no holidays

No “sole right” to services
Contractor is hired through another company
No incentive compensation or bonuses; invoices, not payrolled
No indemnity; provides own insurance and equipment
Substance Over Form:
A Contractor is not a Contractor simply because one chooses to call him/her so!
© Blueback Global, Inc. 2013. All Rights Reserved Page | 9
Risks of “Sham Contracting”

If “De Facto Employment” is established:
Retroactive Implications:
- Holidays/Leaves;
- Reinstatement of equitable pay
- Severance (e.g., in China);
- Penalties for “sham contracting”
- Taxation issues
© Blueback Global, Inc. 2013. All Rights Reserved Page | 10