Employee Contracts for Overseas Service

As the domestic economy continues to be challenged many firms are sending some of their best employees overseas to assist in launching or expanding branch offices in foreign countries where the market appears to be better for the company’s products and services.  The terms and conditions of services in a foreign country should be documented in a formal employment agreement.  Re-location is obviously an important decision for the employee, particularly when his or her family members will be impacted, and the agreement should carefully describe the things that the employer is willing to do to make the transition proceed smoothly and ensure that the employee and, if appropriate, his or her family can live comfortably in the foreign country.  In turn, the employer wants to be sure that its overseas employees understand their duties and responsibilities and comply with the rules and procedures established by the employers for all of its employees and any specific rules and procedures applicable to its employees in the particular foreign country.

The agreement should cover all the issues that are customarily negotiated in any employment contract including place of employment; scope of job duties, include days and hours of employment; compensation and benefits, including salary, bonuses, vacations and holidays and health insurance; ownership and protection of intellectual property rights; and term and termination of the employment arrangement.  Special issues for overseas assignments that should also be covered in this type of agreement include reimbursement for transportation expenses related to the employee and his or her family members; provision of living accommodations in the foreign country; payment of local income taxes; reimbursement of expenses incurred by the employee and his or her family members for language school; insurance coverage on the employee’s activities, including travel to and from the foreign location; medical examinations, medical and hospital care and vaccinations; and procedures for return passage of the employee and his/her family members upon termination of the assignment for any reason.

The content in this post has been adapted from material that will appear in Going Global: A Guide to Building an International Business (Fall 2008) and is presented with permission of Thomson/West.  Copyright 2008 Thomson/West.  For more information or to order call 1-800-762-5272.

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