Introduction
Compensation and benefits refer to the monetary and nonmonetary perks an employer provides to an employee in exchange for the employee’s labor. Benefits can be monetary or nonmonetary privileges, whereas compensation refers to guaranteed or performance-based income. Benefits give additional value to compensation. As the newly appointed HR manager of Java Corporation, a producer of cold coffee and tea in the United States, I am responsible for filling an executive-level expatriate post in our brand-new office in London, England. I hope to fill this position with a candidate that Java Corporation does not currently employ; nevertheless, they must be a citizen of the United States. This position will be for two years and come with a complete remuneration package, the specifics of which will be outlined throughout the rest of this article.
Salary
When determining the starting wage for this expatriate, there are a lot of different considerations of relocating overseas that need to be considered. We have a responsibility to ensure that the associate can handle any significant financial setbacks due to the assignment, particularly given the length of the assignment (two years). Since the pound is widely recognized as a stable currency, the base pay will be paid in the native currency. A foreign service premium allowance will be provided in addition to the base salary (Min et al., 2019). This is done with the understanding that we recognize the cultural, social, and business environment adjustments that the expatriate will face and the separation from family, friends, and business associates that occurs when taking on these assignments.
Tax Equalization will ensure that the expatriates do not pay more or fewer taxes during their time abroad than they would have paid if they had remained in their home country. We will provide the expatriate with a cost-of-living and housing allowance to compensate for the disparity in the cost of living between the United States and England. This will enable the expatriate to continue living at the same standard they were accustomed to in the United States.
We do not plan to provide our employees hardship allowances, spousal support, or mobility premiums. A mobility premium is optional, given that this is an opportunity for a candidate interested in working with Java Corp rather than a need for an employee already working there. In addition, hardship allowances are optional because neither the host country nor the working environment inside the organization creates challenging working conditions (Sitopu et al., 2021). In conclusion, the additional premiums adequately compensate for the absence of spousal support.
Benefits
We are required by law to provide, in addition to the standard benefits such as 401K, health, dental, and vision coverage, the following statutory benefits: social security as a flat payroll tax on both the employee and the employer; unemployment insurance as a payroll tax on the employer; workers compensation insurance; and up to 12 weeks of unpaid family and medical leave.
Social Security
Social Security is a federally administered insurance program in the United States that protects workers and their families from financial hardship upon the worker’s retirement, disability, or death. The program is supported by payroll taxes paid by workers and their employers. Benefit eligibility is based on meeting criteria set forth by the employer, and workers start receiving payments after they reach a particular age. For several benefits, eligibility is contingent upon an employee reaching a certain age. As part of the Social Security Act, the Unemployment Insurance program is designed to help people deal with unemployment’s many challenges (Skomars, 2020). Payments are made during periods of unemployment to offset financial hardship.
Workers’ Compensation
Workers’ compensation is a type of insurance that provides benefits to workers injured or ill as a direct result of their job. The program’s purpose is to help with financial burdens such as medical expenses, lost wages, and other costs related to work-related injuries and illnesses. While most states in the United States mandate that employers carry workers’ compensation insurance, the laws governing it and the benefits it provides can vary significantly from one to the next (Absah et al., 2020). Workers’ compensation insurance may be required of foreign nationals working in the United States depending on the nature of their employment and the state in which they are located. The state in which they work will dictate this need’s specifics. Workers’ compensation laws apply to all employees equally, regardless of nationality or immigration status.
Nonetheless, foreign workers may be subject to additional regulations or constraints due to the terms of their employment contracts or visas. Companies must ensure that their overseas staff are covered by workers’ compensation insurance or face potentially severe legal and financial consequences. Both of these may occur in the event of failure to do so.
Family and Medical Leave (FMLA)
Workers in the United States who qualify for the Family and Medical Leave Act (FMLA) are guaranteed jobs while they care for family members or recuperate from medical conditions. Workers who have worked for their employer for at least 12 months and recorded at least 1,250 hours in the previous year and employers with 50 or more employees within a 75-mile radius are eligible for FMLA leave (Vohra-Gupta et al., 2020). Childbirth and neonatal care Child adoption or foster care placement.
Foreign nationals working in the United States who meet the qualifications may be eligible for Family, and Medical Leave Act (FMLA) leave. Employees with relatives living in countries other than the United States may also be eligible for FMLA benefits (Vohra-Gupta et al., 2020). An expatriate employee may be eligible for Family and Medical Leave Act (FMLA) leave if they need to care for a family member who lives abroad and has a severe health condition.
Additional Benefits
We provide advantages above and beyond what is needed by law. We will provide annual leave and a travel stipend to facilitate a trip back to your hometown. We will also consider the expat’s family when deciding on these compensation packages. We will also provide an education allowance to help offset the costs of sending the expat’s children to school. We will provide a relocation allowance to cover costs like sending your stuff to a storage facility and getting you and your family to your new home abroad.
Furthermore, we will provide repatriation benefits due to the short duration of this job (two years). First and foremost, we place a premium on retaining our talented staff members. The Repatriation Package will cover the expense of moving back to the United States, offer a position with similar responsibilities, and provide opportunities for promotion.
Conclusion
Hiring and placing an expatriate presents complications. A great deal of nuance must be considered. One of the most challenging topics is compensation and benefits. The assignment’s length, the ex-pat’s host country, and the family’s presence or absence all influence the package’s size. The benefits must be appealing to the ex-pat to justify the investment, but the cost must also benefit the company’s bottom line.
References
Absah, Y., Sembiring, B. K. F., & Francisco, Y. (2020). Analysis of expatriate compensation policy in multinational companies. International Journal of Business and Economy, 2(1), 25-30.
Min, J., Kim, Y., Lee, S., Jang, T.-W., Kim, I., & Song, J. (2019). The Fourth Industrial Revolution and its impact on occupational health and safety, Worker’s compensation and labor conditions. Safety and Health at Work, 10(4), 400–408. Web.
Sitopu, Y. B., Sitinjak, K. A., & Marpaung, F. K. (2021). The influence of motivation, work discipline, and compensation on employee performance. Golden Ratio of Human Resource Management, 1(2), 72–83. Web.
Skomars, D. (2020). Expatriate compensation and its impact on employee satisfaction: A single case study from a Finnish multinational company. Osuva. Web.
Vohra-Gupta, S., Kim, Y., & Cubbin, C. (2020). Systemic racism and the Family Medical Leave Act (FMLA): Using critical race theory to build equitable family leave policies. Journal of Racial and Ethnic Health Disparities, 8(6), 1482–1491. Web.