- Overview: Israel
- Global PEO and Payroll
- Global HR Compliance
- Work permit for hiring expats via PEO
- Expand without a company set up
- Contractor vs. employee: which is better?
Global PEO and Payroll in Israel
When considering expanding globally, one of the first questions you may have is about the legal framework for different business entities. While this can be a complicated topic, there are some essential basics to help you understand.
All businesses, whether in your home state or another country, have a legal structure that dictates exactly how the business will be run and who is responsible for what. These structures will vary somewhat depending on where you’re doing business. Some structures are more complex and expensive than others, but they all have benefits and drawbacks.
Establishing your business entity in Israel is an option to be considered as you expand abroad. But before you invest valuable resources in establishing a business in Israel, you should be fully aware of the risks involved.
Acumen’s Global PEO and Payroll solution was designed especially for companies like yours to smooth the way for quick, easy, and risk-free business operations without establishing a legal business entity.
Global Employment Challenges and Pitfalls to Avoid
When hiring a staff to work overseas, some challenges come far beyond the nuts and bolts of finding and vetting candidates. Companies often overlook these challenges when they think only of locally-hired employees but can have extreme consequences for businesses that employ people internationally.
Why is this? Because if you’re not careful, you might find yourself unwittingly breaking one employment law regulation or another in your new country. This could lead to fines, other legal issues, and negative public exposure for your brand. It’s not just about being bad for your business, though; it’s also about being bad for the people who work in your company.
1. Employment Taxes
There are many different types of taxes that businesses have to pay, but employment taxes are one of the most important. These taxes can vary significantly from country to country and can be a large portion of a monthly salary.
2. In-country Employee Registration
It is essential to ensure that employees are properly registered with the local authorities before they start work. Failing to do so can result in penalties for both the employee and the employer.
3. Payroll Calculations: Country-specific Requirements
In many countries, payroll calculations vary significantly. Thus, it’s important to be aware of the payroll practices in your country of employment.
Some countries have different rules when it comes to employment contracts. To avoid surprises, it is crucial to understand how payroll calculations work in your new country. In some cases, you may be responsible for paying your employees for the entire contract duration even if they are not performing as expected or you want to end their employment early. This can be a financial shock to foreign employers who are not used to this practice.
For this reason, it is essential to ensure that you review and understand the terms of the employee’s contract before hiring them so you know what to expect.
4. Local Employment Contracts Compliance
As an employer, it is crucial to have local employment contracts that comply with the law of the jurisdiction where your employees work. These contracts should be provided in both English and the local language. Do not simply copy and paste your existing contract template from your home country – this could result in non-compliance and serious legal consequences.
When recruiting employees for your business, ensuring that their employment contract is appropriate for the country where they will be working is critical.
The language of the employment contract is a crucial detail to keep in mind during the recruitment process, as non-compliance to target country employment laws or any mistakes with the paperwork could cost you money, time, and potentially your business’s reputation.
5. Employment Contract Termination
The employment termination process can be just as important as the hiring process. This part of employment should not be taken lightly as it can have many implications and consequences, both for the employer and the employee. Therefore, it is important to consider all aspects of the situation before deciding.
The start of termination process begins when the employee signs the employment contract. If the termination guidelines are clear and precise, terminating an employee will be much smoother.
When setting out the terms of employment, it is important to be clear about the notice period (making sure it’s aligned with the country-specific regulations), and what is expected in terms of returning company equipment and a credit card or cash float balance. Non-compete clauses protecting your intellectual property are also important considerations. Doing so will help avoid misunderstandings and potential legal problems down the road.
If an employer does not have clear procedures for the termination in their employment contract, they may face litigation. If an employee feels they have been mistreated, they may become disgruntled and contest the termination legally. This can be costly and difficult, especially if the dispute is in another country with a different time zone and language.
How to avoid global employment challenges and pitfalls? One way is to invest in an experienced third party to share the burden of non-core administrative activities, freeing up precious time and resources to focus on the organization’s core competency.
What Is a Global PEO (Professional Employer Organization)?
A Professional Employer Organization (PEO) is a specialized staffing firm that provides human capital management services, including administration, payroll, tax compliance, workers’ compensation, employee benefits, and HR consulting services for its clients. These ancillary services allow organizations to constrain their investment in human capital management to a fixed fee per employee per year.
Global PEOs shoulder the burden of many “non-core” HR and administrative activities – from payroll to benefits administration – enabling PEO clients to focus more on their organization’s core competency. Further, PEOs that are more sophisticated provide expertise to help their clients with strategic HR decisions.
Why Should You Choose a Global PEO in Israel?
The expert team at a global PEO partner usually provides strategic guidance and a wide array of high-quality, cost-effective services tailored to your specific requirements that can help your company grow and scale up safely. Here are some of them:
- Human resources administration, including payroll, taxes, and benefits administration; employee training and development; recruitment; employee relations; compliance training; background or education checks; timekeeping services;
- Regulatory compliance assistance, including payroll tax law and reporting requirements;
- IP protection and offboarding;
- Hiring and HR compliance services, helping you navigate local regulations and avoid prohibited HR practices, including discriminatory job listings, Illegal criminal background checks, misclassified workforce, inaccurate payroll, and tax payments;
- Human resource support;
- End-to-end talent management, including recruiting, onboarding, engagement, performance management, and termination (upon employer approval);
- Liaison with legal counsel on employment issues such as discrimination, wrongful termination, sexual harassment, whistleblower protection, non-compete agreements, severance agreements, and other employment law matters.
Simplifying Global Employment with a Professional Employment Organization
Many things can go wrong when you try to find employment overseas. Acumen International can help you navigate these challenges, but it is important to know your potential obstacles.
As a Global PEO, our role is to enable organizations to quickly and easily hire employees in any country. We take care of all the employment-related details so our clients can focus on their business goals. However, if candidates are unhappy at any stage, the whole arrangement can fail.
When deciding to move abroad for work, your selected candidates consider many factors. The visa and work permit process complexities, currency fluctuations, lifestyle choices, and family considerations can all impact their final decision.
As a PEO, we understand that you must put your employees’ needs first when expanding your business globally. Considering this move’s impact on their lives, it’s important to think outside the box and ensure they are comfortable and supported at every step.
“It has become critical for organizations to understand applicable laws and regulations concerning issues such as minimum wages and benefits, employment standards, immigration, and labor relations in each location. A Global PEO can play an important role in helping organizations navigate this complex global employment landscape by offering reliable and country-specific solutions and expert advice on compliance-related matters,” says Nick Ganzha, CEO and founder at Acumen International.
Acumen Global PEO can help you solve the hard puzzle of global employment. As a Global PEO partner, we help businesses meet all their HR needs while handling compliance issues in the international arena. By offering comprehensive global employment solutions and reality checks about the compliance aspects of employing staff across the globe, we can be an important resource for your in-house HR and Management teams.
What Makes Acumen International’s Global PEO different?
- 100 % compliant, quick, easy market entry. Acumen Global PEO is your local legal entity, helping you reduce the cost and time associated with incorporating.
- Immediate global employment service coverage in 190 countries,
- Both a single point of contact and a dedicated account manager for your project for all target countries.
- A single contract for all in-country services (employment, immigration, legal, etc.)
- A single PEO provider assumes full responsibility for your international employees in multiple countries.
- Payments are made within the UK or to the UK bank company account.
- You can delegate all HR responsibilities Payroll & benefits administration, background checks, and HR helpdesk to Acumen Global PEO.
- As soon as we receive your request for a project in any country, we will send you a payroll breakdown and offer it within 2 working hours.
- Full 100% fee money-back guarantee for the employee or contractor payment delays.
- Tailored and 100% compliant employment contract drafts.
- With Acumen in your corner, you can quickly and easily onboard and compensate your employees without risk of legal repercussions.
- Acumen Global PEO protects your company’s Intellectual Property rights.
Global Payroll Calculator: Accurate Global Employment Cost Estimation
Acumen International offers the Global Payroll Calculator to help businesses understand the compliance requirements for conducting business in a new country. Acumen’s research team tracks developments in 190 countries around the globe. It provides up-to-date data on local regulations related to tax, payroll regulations, benefits, hiring practices, compliance requirements, and other labor-related factors that impact an employer’s bottom line. This valuable information makes the Global Payroll Calculator an invaluable tool for businesses looking to expand internationally.
Global Payroll Calculator helps companies reduce labor costs by providing up-to-date information on hiring, compensation, and tax requirements. It is also an ideal tool for quickly locating employees in any country.
Disclaimer: Any of the above information is subject to changes imposed by Israel laws. To get the latest updates on taxation in Israel and in 190 countries worldwide, contact Acumen’s team of global employment experts.