Global Employment Company: Is It the Right Fit for Your Organisation?

By on April 10, 2014
Posted In Employment

Multinational companies increasingly have internationally mobile employees (IMEs) who perform services in more than one country, other than their country of citizenship, during a single taxable year.  It can be quite challenging to manage legal compliance and tax risks with a globally mobile workforce using a typical secondment arrangement.  Under this arrangement, an IME is employed by the home country (usually the place of citizenship) employer and is then assigned or seconded to work in a host country.  This approach can result in several entities within a multinational company’s controlled group having multiple assignment letters for each IME, without having any common administration.

A global employment company, or GEC, is an entity established by a multinational company to employ its IMEs.  In effect, the GEC serves as a leasing company that is responsible for the employment, compensation and benefits, immigration and income and social tax matters for IMEs.  The GEC provides the assignment letter to the IME, pays – or arranges with a third party to pay – compensation and benefits, and handles all required administrative support for the assignment.  The GEC in turn charges a service fee to each entity that uses the IME’s services.

For more details about GECs, read the full article here.

Andrew Liazos
Andrew C. Liazos is the global chair of McDermott’s Benefits & Compensation Practice Group and has practiced at McDermott for over 25 years. Andrew focuses his practice on compensation and benefit matters, including related securities, M&A, IPO, private equity, international and litigation matters. Clients range from Fortune 500 companies to compensation committees to individual executives in employment and severance negotiations. Read Andrew Liazos' full bio.




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