Dual employment contracts UK and USA

This is not as complicated as most companies make it, but there are a few things that are important:

a. Don't have two contracts. Ever. :-)

Is it an actual secondment (home country contract controls) or is it a temp/perm transfer (destination country contract controls)?

If a secondment then add an addendum to the existing EC. If a transfer then write a new contract for the destination country and simply include language for the agreed conditions of return/resumption of role/promotion upon return at origin. Don't forget to include termination language to account for RIF at either end.

Why is this important? Because if *anything* goes wrong then you potentially have two competing contracts & legal jurisdictions to deal with.

b. Social Security etc. You want to make sure the employee is "kept whole" throughout their time. This (and there's no way around it) is expensive. While they're in the US they would normally pay into US Social Security. You can avoid (most of) this by making use of the UK/US Totalization Agreement and have them remain outside US Social Security clutches. From the US side you can review here:
www.ssa.gov/.../uk.html If you're using a UK contract with secondment then definitely keep life simple for yourself and make use of the UK/US TA.

c. d. e. ....It goes on. Did you have any *specific* questions?



evan

Many thanks for this guidance. They are going to be secondments for up to 2 years paid through the US payroll but still paying NI in the UK. Would certainly remain on UK contracts. One question on the grandfathering of benefits it gets a little completed if anyone makes use of the maternity benefit which they would normally enjoy in the UK, any experience of this?

Dual contracts can be one of the biggest nightmares imaginable in that in most countries the better conditions of the two will always apply - once you are able to find someone with the legal skills to interpret what is written under both sets of legislation........

As Evan says, either second them under their existing contract with an addendum and use the US-UK totalisation agreement to keep them in UK social security (see here for an overview) or put them solely on a US contract after jointly ending UK employment, perhaps with a promise to return

If you retain the UK contact then any UK etitlements will usually apply, including maternity. also pay attention to holiday entilements because your average american gaets 2 weeks if they are lucky and the higher benefit of your UK person could quickly become a bone of contention.

Thank you, very helpful.

Benefits - This is where having a single contract comes in handy.  If they stay on a UK contract then it is easier for the host location to swallow the fact the benefits will be greater than those their US peers get.  It will create resentment in the US work location, so make sure the EE understands that they shouldn't get into conversations about it, if possible. US HR and their direct managers need to understand it is a secondment (not a common term in the US, btw) and not a transfer.

NI - Remember that you have to formally apply for totalization benefits before the EE leaves the UK, especially if they will be paid through US payroll. Otherwise, US law states they must pay US Social Security, which then triggers US payroll and benefits taxes. 

Thank you for your guidance. UK Contract it is! We will not have the holiday problem since the business has been very generous with holiday in the US. Thanks again.