Are Your Personnel Being Mobilised Compliantly? Recruitment Advice for Chemical Companies

Global chemical companies operate sites worldwide with varying needs, and different sites will require other resources depending on their stage of development and production. Expanding a site involves a temporary construction workforce, increased demand or output requires additional qualified expertise, and managing an expanding workforce means hiring new support staff. Businesses may find that with challenging deadlines, constrained budgets, and a highly competitive job market, projects can be slowed down while local talent is sourced.

A solution to this is to examine the existing workforce and their ability to relocate and look more globally for new talent to fill challenging or highly skilled roles quickly, moving staff to where they’re needed most.

Global mobility opens new opportunities for chemical engineering companies to position these key skills strategically. Still, it must be managed compliantly, considering all the rules and regulations of the host country or region. This blog highlights some of those potential risks and how businesses can identify and meet those requirements.

How Compliance Can Affect Mobilisation for Chemical Companies

Compliance is more than just employing talent legally in a country of operation. Chemical companies must also consider the broader company's operation in that country and adapt their business practices in each location to avoid costly legal issues.

Legal and Regulatory Compliance

When relocating employees, chemical companies must adhere to the local laws and regulations of the host country. This includes creating legal entities in new locations, understanding and following immigration processes, and ensuring employment contracts align with local standards. Non-compliance can result in financial, reputational, and operational damages.

This may also extend to the certifications and licences required to operate safely within the country, such as a Certified Chemical Engineer certification or a Licenced Professional Engineer. The top talent will likely hold the right qualifications for their country of origin but may require additional training or certification elsewhere to conduct certain activities or tasks.

Chemical Handling Compliance

The chemicals industry is regulated by a series of frameworks globally, but many countries and regions have different health and safety laws around handling chemicals. Being compliant in terms of employee safety in one country does not necessarily mean compliance in another, and companies must ensure their operating practices around the handling and management of chemical products align with the operating country’s specific rules to protect employees.

The Globally Harmonised System (GHS) is a global framework that chemical companies will be aware of. Countries will also have their own requirements, such as REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) in the EU, which demands additional employee protections. Companies must ensure their employees have obtained the relevant licences and certifications for handling chemicals within the country of operation and are aware of the country-specific reporting and management systems where applicable.

Tax Compliance

Chemical companies must navigate complex tax regulations that vary significantly from one country to another. This involves understanding the tax implications of employee relocations, including which relocation expenses are taxable and ensuring all corporate and income tax obligations are met to avoid penalties or double taxation.

The format in which employees are relocated and employed can also affect tax eligibility in the employee's country of origin and operation. Businesses must consider the protection policies for expatriates, the social security contributions where applicable, and tax withholding requirements. Reporting must also be managed appropriately for an employee's home and host country.

Employment Practices

Statutory requirements, such as overtime laws, benefits, and probationary periods, differ widely across borders. For instance, employment contracts in the U.S. differ significantly from those in countries like Italy or Mexico, each with unique stipulations such as the 13th-month salary or specific bank deposit salary requirements.

This means that chemical companies cannot compliantly rely on generic employment contracts for their global workforce and must make changes to accommodate the employment law of both their home country and the host country.

Data Protection and Intellectual Property

With the rise of digital data usage, chemical companies must comply with data protection regulations like the GDPR in Europe. Additionally, intellectual property rights must be secured and registered according to the local laws of the market companies are entering.

Addressing these key areas can help companies mitigate the risks associated with global mobility and ensure a smooth and compliant operation across international borders. This proactive approach protects the company from legal and financial risks and enhances the overall success of the global mobility strategy.

Steps to Secure Compliant Work Permits and Visas

Once a chemical company understands the requirements for moving their employees into another country for a project, either permanently or temporarily, the next step is to prepare the legal documents to move their teams.

Employees cannot legally work in the host country without the proper permits and visas. Therefore, it’s essential to ensure that these documents are accurate and in place before work begins. Planning mobilisations well in advance is necessary, as the application process can be slow depending on the host country.

Different Types of Work Visas

Work visas can be broadly categorised into several types, each designed to meet different employment scenarios and applicant qualifications. Common types include:

• Temporary Work Visas: These are for individuals who intend to work in a foreign country for a specific period. The U.S., for example, offers various categories such as H1B for speciality occupations, L1 for intra-company transfers, and H-2A & H-2B for seasonal workers.
• Skilled Worker Visas: These are issued to individuals with specialised skills in demand in the host country. They’re often subject to the approval of the labour ministry to ensure that local employment opportunities are not adversely affected.
• Business Visas: Allow entry for short-term business activities like conferences or negotiations but do not permit direct employment.
• Intra-Company Transfer Visas: For employees transferring within the same company to a different country, typically granted to senior executives or managers.
• Investor Visas: These are for those making significant financial investments in the host country, potentially leading to permanent residency.
• Permanent Employment Visas: These allow individuals to reside permanently and are often tied to specific employment offers. The U.S. issues such visas under categories that include employment-based preferences, depending on skills and the nature of the job.

Each visa type has specific requirements and restrictions, such as the duration of stay, the ability to bring dependents, and eligibility for eventual permanent residency. Each country of operation will also have its terminology and specific rules for each visa, and compliance will come from a comprehensive local understanding of the country of operation.

Application Process and Timelines

The process of applying for work permits and visas involves several detailed steps, which can vary by country but generally include:

• Employer Petition: The process begins with a prospective employer filing a petition for most work visas on the employee's behalf. This is particularly true in the U.S., where forms such as I-129 are submitted to U.S. Citizenship and Immigration Services (USCIS) for temporary worker visas.
• Labour Certification: Some visa categories require approval from the host country's labour department to ensure that hiring a foreign worker doesn’t adversely affect the local job market.
• Personal Application: Once the petition is approved, the applicant may apply for the visa. This often involves gathering extensive documentation, such as proof of qualifications and experience, and attending an interview at the consulate or embassy.
• Issuance and Entry: The visa is issued upon approval, allowing the individual to travel to the host country. Further validation checks are conducted at the port of entry before entry is permitted.

Depending on the visa type and government offices' efficiency, the process can take several weeks to months. In countries with a high demand for skilled chemical industry workers, such as the U.S., specific visa categories may have annual limits, adding to the complexity and duration of the process.

Local Labour Laws and Regulations

It’s important to consider local labour laws when drafting international employment contracts. Each country has its own set of regulations governing employment, including minimum wage rates, working hours, and termination procedures. For example:

• The Labour Code mandates standards for minimum wage, overtime pay, and holiday pay in the Philippines.
• India's employment laws cover various protections, including wage regulations, dispute resolution, and maternity benefits.
• Canada and the USA have comprehensive laws that address minimum wage, discrimination, and workplace safety.

In addition, many regions expanding in the chemicals space, such as countries in the Middle East, have also set nationalisation targets for their workforce. As a result, there are also strict limits on the number of expatriates to local workers a company can hire and the roles that expatriates can occupy. A local presence with knowledge of employment law will be aware of these rules and limits and will be able to advise on how to deploy talent compliantly.

Employers must conduct thorough research or consult with legal experts in the host country to ensure that the employment contracts comply with local laws. This prevents legal disputes and protects the company from potential fines and reputational damage.

Managing Payroll and Taxes Across Borders

Managing payroll and taxes across international borders presents a complex challenge for chemical businesses with a global workforce. As companies expand their operations globally, understanding and complying with each jurisdiction's diverse tax regulations and payroll requirements becomes crucial.

Setting Up Payroll Systems

When setting up payroll systems in multiple countries, chemical companies must navigate various legal and regulatory landscapes. Each country has its own rules regarding income tax, social security contributions, and employment laws, which can significantly impact payroll operations.

• Employer Registration: A company must typically register as an employer in the host country before initiating payroll. This process may involve establishing a legal entity or registering with local tax and social security authorities. For instance, within the European Union, companies based in one member state do not necessarily need to open a new entity in another member state but must register with the appropriate authorities.
• Local Payroll Partner: Engaging a local payroll provider or hiring a payroll expert is often essential. These professionals can help navigate the complexities of local regulations, ensuring compliance with tax laws and employment contracts. Costs for these services can vary, but they’re crucial for maintaining legal compliance.
• Compliance with Local Laws: Payroll systems must meet local regulations concerning minimum wage, working hours, paid time off, and other employment conditions. Non-compliance can lead to legal penalties and damage to the company's reputation.
• Integrated Payroll Systems: For businesses operating in multiple countries, using an integrated payroll system can help manage payroll data centrally, reducing the risk of errors and ensuring consistency across different jurisdictions.

Tax Obligations in Foreign Jurisdictions

Navigating tax obligations in foreign jurisdictions requires a thorough understanding of local tax laws and international tax treaties. Companies must ensure they do not inadvertently create a taxable presence or permanent establishment, which can trigger significant tax liabilities.

• Understanding Taxable Presence: The activities of employees working abroad, such as their roles, the duration of their stay, and their level of authority, can affect whether a company is deemed to have a taxable presence in a foreign country. Companies must assess these factors carefully to avoid unexpected tax obligations.
• Withholding Taxes: Companies are often required to withhold taxes on behalf of their employees and remit them to the local tax authority. This includes withholding taxes on income, social security contributions, and other statutory deductions.
• Double Taxation: Employees working abroad may be subject to tax in both their home and host countries. Companies should explore tax treaties that may relieve double taxation and consider implementing tax equalisation policies to protect employees from higher tax burdens abroad.
• Professional Advice: Retaining a mobility tax expert or a firm specialising in international taxation can provide valuable guidance and help mitigate risks associated with cross-border tax compliance.

To ensure that all tax liabilities and responsibilities are met, the safest solution is for chemical companies to engage with tax specialists in the host country, ideally with previous experience working with international or foreign companies.  

How Employer of Record Services Can Provide Compliant Global Mobilisation

Employer of Record (EOR) services are a critical tool for global chemicals companies planning to expand their operations internationally. An EOR assists businesses in legally employing workers in foreign countries, managing payroll, benefits, taxes, and labour law compliance on their behalf. By partnering with an EOR provider, companies can access a vast talent pool without the administrative burden of hiring and managing employees directly in new markets. EOR services also offer comprehensive support in navigating complex international labour laws and regulations, ensuring full compliance across different jurisdictions.

Benefits of Using an EOR for a Global Chemicals Company

1. Ease of International Expansion and Hiring Without Establishing a Local Entity

For a global chemicals company, utilising an EOR streamlines the process of expanding into new international markets without establishing a physical presence in each country. This allows the company to swiftly enter new markets, hire top-tier global chemicals talent, and leverage new opportunities without facing compliance risks. This benefits the company, as they can deploy their existing talent compliantly to sites and projects that need their skills while offering engineers the opportunity to develop their skills and experience globally.

2. Ensuring Compliance with Local Labor Laws and Regulations in New Markets

Compliance with local labour laws and regulations is crucial when expanding operations internationally. An EOR is a local expert on employment law in their country of operation. They can support a global chemicals company in maintaining regulatory compliance on projects, minimising the risk of legal issues, and ensuring that all employment regulations are followed in the host country.

3. Streamlining Payroll, Benefits, and H.R. Administration for International Employees

An EOR assists in managing payroll, benefits, and H.R. administration for international employees, ensuring prompt and accessible support, on-time payroll, and competitive advantages. This elevates the employee experience and satisfaction, ultimately supporting the company's workforce. An EOR can also help employees with travel, accommodation, and transport support, allowing the company and employees to focus on the project at hand.

4. Reducing the Administrative Burden and Costs Associated with Global Expansion

An EOR enables a global chemicals company to bypass the overhead costs and administrative complexities of setting up and maintaining a legal entity in foreign locations. This cost-efficient option allows the company to reallocate resources in other key areas, such as research, production, or expansion elsewhere in the business.

Conclusion

Chemical companies looking to mobilise their talent need to consider more than contracts and travel. To succeed, companies will have local experts in their host countries for projects and sites responsible for the company's local compliance with employment laws and regulations. They have the local support to manage visas and permits accurately, ensuring full employment compliance. They know the regular training and development needed for specialised tasks and the laws around handling hazardous materials.

Partnering with an Employer of Record (EOR) service provider like NES Fircroft offers many benefits for a global chemicals company seeking international expansion. From navigating complex labour laws to streamlining administrative processes, an EOR service provides the essential support to ensure a seamless and compliant global expansion strategy. An EOR saves time, reduces administrative burden and offers a cost-effective solution for managing international talent and compliance.

By leveraging the expertise and support of an EOR, the global chemicals company can confidently extend its footprint into new markets while maintaining regulatory compliance, optimising workforce management, and driving sustainable growth.

How NES Fircroft Can Help – World-Leading Chemical Recruiters

The global demand for skilled talent across the chemicals industries is increasing, and competition is growing between companies looking to hire, deploy, and retain the best engineers globally.

NES Fircroft's expert recruitment teams have offices in over 45 countries with cultivated talent pools. Our sector-specific teams can source engineering and technical professionals for global roles with some of the biggest names in chemicals and engineering.

With decades of experience in international expansion, our experienced chemical recruiters can also help you hire employees from across the globe quickly, compliantly and with minimal risk.

Contact us to discuss how we can support your workforce needs.