JP GOOCH GLOBAL DIRECTOR, PARTNER & CLIENT SOLUTIONS CXC GLOBAL

MANAGING YOUR GLOBAL CONTINGENT WORKFORCE

MANAGING DIRECTOR, AMERICAS CXC GLOBAL

JOHN SMITH

JP GOOCH DIRECTOR, PARTNER & CLIENT SOLUTIONS 15 years in HR consulting 5 years in Global Employment and Payroll 1 Global MBA 1 Start Up Company, built and sold to ADP

CXC GLOBAL – INTRODUCTIONS MANAGING DIRECTOR 20+ years in HR consulting 16 Years Global Contractor Compliance Experience Has worked with most of the MSP, VMS, RPOs

JOHN SMITH

CXC GLOBAL EXPERIENCE 68 Countries 7 Regional Compliance Centers - USA/Canada - Brazil - UK - Hong Kong - Singapore - Malaysia - Australia 180 team members 26 languages 24 Years in Business

AGENDA

• Review global expansion, compliance and payroll trends

• Share some of the topics to be aware of when managing a global contingent workforce

• Future state of global workforce growth

QUICK SHOW OF HANDS HOW MANY HAVE MANAGED EMPLOYMENT OUTSIDE THE USA?

COMPANIES SEEK GLOBAL GROWTH 72%

60%39%

of companies plan to increase their international share of business

of companies say their international planning will increase

of US CEOs plan to complete a cross-border M&A in the next year

GLOBALLY MOBILE & CONNECTED Over 2 Billion Smartphones Worldwide

Average user checks phone 46 times per day

WHAT IS THE “GIG ECONOMY”?

Millennials

91% expect to stay less than three years

The gig economy

42 million

U.S. workers are 1099

65 million

projected increase by 2020

34% of the workforce has

a second job

1of3 millennials freelance

COSTS OF GLOBAL EXPANSION

EMPLOYMENT COSTS

LEGAL COSTS

CUSTOMS COSTS

CORPORATE TAXES

TRANSLATION COSTS VALUE ADDED TAX (VAT)

REGISTERING AN ENTITY

UNION COSTS

MULTIPLE WAYS TO ENGAGE RESOURCES

HARD TO TELL

WHICH IS POSSIBLE

EMPLOYER OF

RECORD

CORP TO CORP

INDEPENDENT CONTRACTOR

CONTRACTOR OR EMPLOYEE?

BEHAVIORAL CONTROL • When and where do they work? FINANCIAL CONTROL • Who pays business expenses, can they have a

profit OR loss? RELATIONSHIP CONTROL • How long is the contract, employee benefits

offered?

TEST IS NOT THE SAME GLOBALLY CANADA • Similar to the US; 5 question test

o Do you have "authoritative control" to do your work? o Do you set your hours? o Do you pay your own business expenses? o Do you get paid only for work done? o Can you, and do you, have other paying clients?

MOST COUNTRIES HAVE MULTI-FACTORIAL TESTS CAN VARY BY REGION OR LAW APPLIED • China - no “Independent Contractor” concept; Labor Dispatch is possible • India – rules vary by State; each has its own labor laws (29 States) • Belgium – Four Factor test in 2006 Employment Law, and Nine Factors in another 2012 Act

ASKING GOOD QUESTIONS Contractor or Employee? •Recognize that each country has different rules

Social Costs •Generally speaking, four categories: •Medical Care, Maternity •Retirement/Pensions •Work Injuries/Disabilities •Unemployment Insurance •Each country has different levels •Range from 0 to over 100% of income

Termination •Rules must be followed closely, especially union rules

Vacation / Holidays •Many countries require 13th salary (Christmas Bonus)

Annual requirements •Some countries require annual salary increases

GOOD QUESTIONS – EXAMPLES Should I be engaging this

resource as a contractor, as an employee, or under a Corp to Corp contract? Please define the Social

Costs I should expect to pay when hiring workers in

Country?

What are the rules I need to know about when terminating

an employee?

How much notice do I have to give?

What are the requirements around Vacation / Holidays

Is there a 13th salary (Christmas Bonus) required?

Are there annual requirements like union

mandated salary increases I need to know about?

CXC GLOBAL – HOT TOPICS • Major changes to treatment of UK contract workers • Wrong classification of worker will be costly • End users can be held liable for unpaid taxes, debt transfer

United Kingdom

• Restriction on independent workers • Changing rules on how to engage contract workers Netherlands

• Deemed employment issues increasing • Restriction on employment of contract workers Germany

• Changes to rules for employing contractors France

THE FUTURE? LOOK TO THE PAST…

• Specialized services: Engineering, Architecture Industrial Revolution

• Manufacturing to Asia and Latam • Expats to oversee 1970s/80s

• Global services: payroll, accounting, data processing • Mix of expats and local oversight 1990s

• Call centers, IT and coding work • Statement of work professional contractors 2000s

THE FUTURE? THE GIG ECONOMY Everyone in the world with a smart phone, an internet connection and a skill has potential • Car? > Uber driver • Bike? > Last mile delivery • STEM skills? > In demand

Workers will contract with multiple employers

Truly global market for talent

Compliance and Due Diligence will be critical

QUESTIONS?

CONTACT INFORMATION

John Smith Managing Director – Americas E: john.smith@cxcglobal.com Office: +1 203 459 0683 Toll Free: +1 800 588 0292 ext. 102 (Canada & USA only) Twitter: @Jsmith_ct

JP Gooch Global Director, Client & Partner Solutions Email: jp.gooch@cxcglobal.com Office: +1 919 825 1759 Mobile: +1 919 357 7469 Twitter: @jpgooch11

Website: http://cxcglobal.com/