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12 December 2016

Tagged in: Audience 

5 considerations when looking to make placements in the US

We were recently approached by a London based recruitment agency who are looking into the possibility of making placements into the US at the request of a client and in due course aim to set up an office there. Much of the conversation was centered around the differences between the European and US staffing landscapes and how to address them. This is a discussion which we have on a daily basis so we wanted to highlight some of the most important aspects of placing a contractor in the US. Here are the top 5 considerations.

 

  • Registrations. In the United States an Employer must be registered in any State where they wish to employ workers. If the agency takes on employment responsibilities for contract workers they will need to obtain these registrations throughout any number of States where they want to conduct business, adhering to the particular laws, costs and compliance for registering their business in each State

 

  • Withholding of all necessary employment related taxes. The tax system surrounding employment in the US is notoriously complex; most of us are familiar with the saying “it’s like dealing with 52 different countries”, and this really does ring true. The tax system works on a Federal, State and at times Municipal level which results in there being dozens of specific employer and employee taxes which will vary depending on where in the Country an employee is working. You’ll also want to consider how you will manage your State Unemployment Tax or “SUTA”. This actually varies from company to company depending on each business’ history of its ex-employees claiming unemployment benefits after leaving. It’s vital that an employer withholds the correct taxes on behalf of its employees as even an accidental mismanagement can be extremely costly.

 

  • Workers Compensation. Workers compensation (WC) is an insurance which covers injury caused to an employee in the workplace and precludes employees from suing their employers. WC is determined by the role that workers are engaged in, the end clients overall company and the State in which they are working WC is managed by each state separately so if you’re lucky/have a good reputation you may be able to find a carrier willing to write you a nationwide policy (which is far more preferable). Otherwise you may end up having to find a carrier in each state (which would also then mean that you get audited by each state separately. The WC rate itself is related to the risk involved to an employee as a result of their role. So as an extreme example: “Digital Animation Creator” = lower WC whereas “Bomb Disposal Engineer” = high WC.

 

  • General Liability/Professional Liability (GL/PL). Whilst there are a great number of insurances that an employer must have, GL and PL are not legal requirements but are key in mitigating the risk taken on by an employer.  Without them, an employer is putting themselves at significant financial risk. GL covers claims that may occur when an individual is injured or property is damaged as a result of the actions of a worker. PL protects the employer from claims that might occur as a result of advice given by or professional services provided by a worker. Once again there can be difficulty trying to find coverage if you don’t have initial large amounts to obtain these insurances.

 

  • Compliance. There are a number of areas within the employment landscape which require stringent attention to detail and strict compliance. The US is a hotbed for regulation and if you’re not playing by the book or if you take your eye of the ball the consequences can be serious. Compliance is vital across a number of factors such as Healthcare, Termination, Overtime, Sick-leave, worker status amongst others.

 

PGC has over 16 years of experience in helping our partners navigate all the issues surrounding employment is the US. We have worked with numerous agencies who have made the move over to North America and never tire of seeing them take their business to new levels; being a part of that gives us a real kick!  We have teamed up with APSCO and this year are taking part in a trade delegation heading to New York and San Francisco to explore the employment landscape in the US. There will some great speakers as well as some fun networking events. If you’re lucky enough to be an APSCO Member we can provide you further information about joining us on the trip.

To find out more about making placements in the US you can get in touch with us: info@pgcgroup.com

 

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