Foreign-based Workers

Banner Image: 

Sections

Foreign-based Workers

Hiring Options for Foreign-based Workers

Hiring a U.S.-based worker will always be easier, quicker and cheaper than hiring a foreign-based worker. Before hiring a foreign-based worker, determine if it is possible to do the work from the U.S. If it is not possible to do the work from the U.S., there are four options for hiring foreign-based workers, and it is important that you choose the appropriate option for your project.

If you are hiring a foreign-based worker for a sponsored project, you should decide which option to use at proposal time. For assistance in determining the appropriate option, contact Global Operations.

 

Option 1: Independent Contractor/Consultant

If you determine that an independent contractor/consultant (ICC) is the appropriate option for your project, follow the Process for Engaging a Foreign-based Independent Contractor or Consultant. Many people default to the independent contractor/consultant (ICC) hiring option because they perceive it to be the easiest, quickest and cheapest hiring option, regardless of whether or not it is the appropriate one. There are many myths about the ICC hiring option of which you should be aware:

  • Myth. An ICC is the least risky option for hiring a foreign-based worker.

  • Fact. If a U.S. or foreign court finds you treated an ICC like an employee, penalties can include back pay, fines and jail time. The U.S. government is cracking down on employees misclassified as ICCs, and foreign countries already have stricter laws.

 

  • Myth. An ICC is the cheapest option for hiring a foreign-based worker.

  • Fact. ASU does not provide ICCs benefits, liability insurance, facilities, equipment or supplies. You must factor these and any other overhead costs into the ICC’s rate, which can make hiring an ICC just as expensive as other hiring options.  

 

  • Myth. An ICC is the quickest and easiest option for hiring a foreign-based worker.

  • Fact. Hiring an ICC is a multi-step process that typically takes several months. Steps including fulfilling competition requirements, confirming that ICC is the correct classification, setting up the vendor in Advantage, and executing the contract.

 

Option 2: Prime or Subcontractor Employee

If you determine that a prime or subcontractor employee is the appropriate option for your project, work with your prime or subcontractor and research advancement staff to make the necessary arrangements. This is the preferred option for hiring foreign-based workers as your foreign-based prime or subcontractor already has the business infrastructure in place to support a foreign-based worker.

 

Option 3: Hiring Firm Employee (Indirect Hire)

If you determine that a hiring firm employee is the appropriate option for your project, follow the Process for Recruiting and Hiring a Foreign-based Employee (Indirect Hire). You cannot follow the Office of Human Resources' standard hiring process for these employees.  

 

Option 4: ASU Employee (Direct Hire)

You can only hire an ASU employee through an ASU legal entity for a strategic project or initiative. If you determine that an ASU employee is the appropriate option for your project, contact Global Operations. You cannot follow the Office of Human Resources' standard hiring process for these employees.  

 

Considerations for Indirect and Direct Hires

Indirect and direct hires come with additional challenges. Becoming familiar with these challenges and recommended solutions will help you better manage the process of recruiting and hiring these employees. For assistance implementing recommended solutions, contact Global Operations.

 

 

Challenges

Recommended Solutions

Salary

  • Foreign-based workers are not part of ASU's compensation plan.
  • It is difficult to know what fair and reasonable compensation in a foreign country is.
  • Consult local partners to determine a fair and reasonable salary.
  • Use WageIndicator or PayScale to access worldwide salary data.

Benefits

  • Foreign-based workers are not eligible for standard ASU benefits.
  • Most countries legally require certain benefits such as 13 month salary, bonuses, sick and vacation leave, holiday pay, gratuity, and/or contributions to a provident fund, social security, the universal healthcare system, etc.
  • Consult local partners and local labor laws to determine a fair, reasonable, and legally compliant benefits package.
  • Get quotes from local and/or international vendors, and select a plan(s).

Payroll

  • Foreign-based workers are not part of ASU's payroll.
  • Foreign-based workers are subject to local taxes, which can be complex.
  • Utilize a PEO or another third party to manage payroll.

Human Resources

  • Local labor laws differ by country.
  • Utilize a PEO or another third party to serve as human resources.
  • Familiarize yourself with local labor laws.

Access to ASU Resources

  • Foreign-based workers do not have access to ASU resources such as systems, supplies, equipment, and facilities.
  • Budget for supplies, equipment, and facilities.

Schedule

  • Global Operations has to follow ASU's procurement process to identify and set up a contract with a PEO before the hiring process can begin.
  • Foreign-based workers require detailed employment contracts that can take weeks, and in some cases months, to negotiate.
  • Benefits packages take time to prepare.
  • Allow 2-3 months to onboard a foreign-based worker.
  • Discuss salary, benefits, and the PEO arrangement with the foreign-based worker early on to manage expectations and speed up negotiations.

Cost

  • PEO fees generally include a 15-25% margin and $1,000 - $5,000 in setup/closeout fees per employee.
  • The total cost of a foreign-based worker can be hard to predict.
  • Budget for costs at the proposal stage.
  • Research costs and consult local partners to come up with an educated estimate to include in your budget.