Human Resources/Employment law

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Question
Can a contractor working out of a Hong Kong office can be given a US contractor agreement instead of a Hong Kong contractor agreement (basically the contractor being placed under the parent company rather than its Hong Kong subsidiary) What risks the company might have if the contractor working out of the Hong Kong office be held to US laws instead of HK employment laws? Is it advisable to put the contractor under the Hong Kong employment contract? Thank you.

Answer
Hello Jo,
Thanks for your question.

If I was a USA company hiring a contractor out of Hong Kong, I would want the work agreement to be with the Hong Kong Company, not the individual worker or a contract based in the USA.  I would not want to have the individual worker on my USA payroll or subject to 1099 reporting.  In that way the Hong Kong company is responsible for the entire compensation package, expenses, travel and so on.  Also the contract worker is not exposed to wage and hour laws associated with being on a USA payroll or under a USA contract.  And the USA company would have no reporting obligations associated with a foreign national on payroll, nor would the Hong Kong company and worker be saddled with tax equalization which I can vouch from personal experience is as complicated as payroll and taxes can be.

If this is a one time, short term deal then I believe the above would work for you. If its a longer-term, repetitive situation I would suggest seeking out legal advice and creating processes that would be repeatable and reliable.

As I am sure you know, notwithstanding the above payroll conversation, foreign nationals and contractors working in USA companies can create liability for the USA company under some USA based laws and the best example to use would be OSHA and NIOSH… were the USA company could be held liable for an action of the foreign contractor if that action created a hazardous situation or worse for the company.  Another example of exposure would be improper actions or behaviors which violated harassment and discrimination laws.

That is a summary of my experience and advice.  I hope you find it of value.  From a personal standpoint I am always interested in feedback for purposes of continuous improvement. So it would be helpful and appreciated if you could take a minute and rate this answer by completing the 4 multiple-choice evaluation questions on the “AllExperts.com” website. It only takes a minute.

Thanks again for your question Jo.  Good luck with your project.
Mark

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Mark Eichinger

Expertise

Any type of question related to domestic and international Human Resources work. My H.R. passions include Compensation design and systems in competitive markets, Health and Safety in Industrial Environments, Performance Management, Talent Management (Hiring, Selection, Employee Development, Compensation, Creating Space, etc.), Communications, Coaching, Counseling, Leadership, and Management. Questions I cannot answer: I am sure there are questions within these categories that I may not be able to answer but my experience below would suggest those would be few.

Experience

I own International Human Resources Coaching and Consulting, LLC. www.IHRCConline.com. Previously, I successfully held corporate executive and management leadership positions from 1979 to 2007 in two $9B+ multi-national corporations. Positions included: Vice President, Human Resources for the Asia Pacific Region, Eaton Corporation; I was based in Shanghai, China. Prior to that assignment, Vice President, Human Resources International and Operations, Eaton World Headquarters, Cleveland, Ohio with global responsibility for Eaton’s Human Resources practices, international assignee management, and Regional Human Resources Directors in Asia Pacific, Europe, and Central and South America. Specifically, my experience spans work at domestic and international locations at the operating plant, division, business unit, and corporate levels and most business scenarios to include startups, closedowns, restructurings, integrations, and ongoing operations. I am an Eaton Business Excellence Assessment Examiner (Malcolm Baldrige based system). I introduced processes and process mapping into the Human Resources environment. I have extensive experience with and working in domestic and international organization matrix structures. In the Asia Pacific region, my responsibilities included, leading the regions H.R. team and processes, managing the H.R. relationship with the corporation, creating and leading the professional and general manager development programs, China’s university relations program and managing the Asia Pacific key leader’s process. I have coached managers and leaders. I am a professional listener, my style open, direct, and focused on leader accountability and employee engagement. In Summary, my career responsibility included more than 60,000 employees, 60 union and union free operations, and 45 countries. I also lived in Korea for two years while in service with the USA’s armed forces.

Organizations
SCORE – Counselors to Americas Small Business; at various locations I have also belonged to Rotary, Lions, Kiwanis and the Chamber of Commerce. I have served on Boards of medical, community and institutional organizations.

Education/Credentials
Bachelor of Science in Business Administration, Youngstown State University. MBA work Youngstown State University, and University of Bridgeport. University of Tennessee, Lean Manufacturing Certified. Thunderbird School of Global Management, Management Certified.

Awards and Honors
Corporate level awards for compensation systems, communications campaigns.

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