Workers

Hiring options for foreign-based workers

Hiring a U.S.-based worker is generally 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 ASU’s process for engaging ICC’s. 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 international 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 other 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 weeks. Steps include: fulfilling competition requirements, confirming that ICC is the correct classification, setting up the vendor in Workday and executing the contract.

Option 2: Prime or subrecipient employee

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

Option 3: PEO employee (indirect hire)

If you determine that a Professional Employer Organization (PEO) 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. For common questions related to PEO employees, see our FAQs doc. 

Option 4: ASU employee (direct hire)

You can only hire a foreign-based ASU employee for a strategic project or initiative through one of ASU’s legal entities. 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 is in another country.	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 all standard ASU benefits. Most countries legally require certain benefits such as a 13th month salary, bonuses, sick and vacation leave, holiday pay, gratuity, and/or contributions to a provident fund, social security, the universal healthcare system, etc. Employees on permanent or semi-permanent foreign assignment may not be able to access standard ASU benefits.	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). Contact ASU Benefits to discuss options or utilize PEO or Secondment arrangement during assignment if no ASU legal presence in-country.
Payroll	Foreign-based workers are not part of ASU’s payroll. ASU payroll only issues physical checks or requires a U.S. bank account. Foreign-based workers are subject to local taxes, which can be complex.	Utilize a PEO or another third party to manage payroll. Direct hires will need to coordinate with ASU Tax Services for employees to be set up on ASU’s payroll wire platform. PEO/Local partner employees will be paid in local currency via a local bank account. ASU cannot provide personal tax advice. Foreign-based workers should seek out personal tax consultation.
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 may have limited access to ASU resources such as systems, supplies, equipment, and facilities.	Budget for supplies, equipment, and facilities. Obtain an ASU Affiliate ID for the worker. Utilize in-country partners to procure, receive, or provide necessary resources.
Schedule	ASU’s procurement process is still required to be followed to 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 worker early on to manage expectations and speed up negotiations.
Cost	PEO fees generally include a 10-25% 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.
Visas	Does the foreign-based worker have work authorization in the country? Will the worker(s) require visa sponsorship in the country?	Consult local partners or seek outside advice to determine visa needs. Foreign assignments may require the use of a PEO for visa sponsorship. A direct hire option may not exist if ASU will not be setting up a legal entity.