European Staffing Companies CAN make Contractor Placements for US Clients!
If you are considering making contractor placements in the USA there are various basics that you need to consider first.
Misclassification
This is hotter than the hot issue in the US. The bottom line is that US Clients are totally fearful about engaging with contractors that are classified as self-employed when they should be engaged as employees. It is essential that contractors are structured correctly from the start and determining whether an independent (1099) can be engaged or whether the contractor needs to be structured as an employee (W2) is vital and advice should always be taken.
Rate to contractor
Outside the US it is normal practice for the contractor to be given an all-inclusive daily rate and from that rate, all costs of engagement are deducted. In the US the standard is to give a contractor a daily pay rate to which the costs of employment will be added. It is, therefore, necessary to discuss these costs with your payroll company at a very early stage.
Employee costs will vary according to several factors including the State where the work is to be carried out and the job description so an outline of the job and the location have to be given in order that precise costs be calculated.
Immigration
In reality, it is “impossible” to secure work permits for contractors (quota system, getting selected via the quota, the application itself, many months application time, etc), within a sensible commercial time frame, therefore US nationals and Green Card holders should be sourced.
Billing/Paying/Funding
A US payroll company employing a candidate is required to pay the contractor on a regular basis that is normally weekly. It may well be that the payroll company has therefore to pay the worker prior to receiving funds and as such funding would be needed.
For a US payroll company to achieve the funding it will be necessary for them to hold the contract with the US client and to have a margin agreement with the foreign staffing agency or for the staffing company to place the payroll company in funds.
It is essential to take proper advice when looking to do business with US clients but the good news is that everything that can be achieved! For more information, get in touch with us today.
Disclaimer: All information written here is for general informational purposes only and is not intended to be a substitute for professional and/or legal services.