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Global Work Glossary

What is a Global PEO and its purpose?

A global PEO is a service firm that assists companies in expanding into new markets without establishing new international business entities. It acts as the employer of record for client companies, taking on the complexities of international hiring, payroll, and tax compliance. Also known as an international PEO or employer of record (EOR), it facilitates international expansion by managing various aspects of global workforce management.

Functions of a Global PEO:

Global Payroll: Facilitates processing and distributing payroll for a workforce spanning multiple countries, ensuring accurate payments and compliance with local tax laws. Employee Benefit Plans and Administration: Selects and administers benefit plans that comply with legal requirements in each employee's country, ensuring competitive compensation packages. Tax Filing: Manages taxes, social contributions, pensions, and other fees, ensuring compliance with local tax regulations and deducting the correct amounts based on local laws. Employee Onboarding: Streamlines onboarding processes by preparing contracts and legal documents for new employees to e-sign on the global PEO platform. Employment Contracts: Creates employment contracts compliant with each country's tax and employment laws, ensuring legal compliance. Insurance Plans: Offers employees access to comprehensive health insurance plans tailored to their region. Regulatory Compliance: Ensures legal compliance by regularly reviewing contracts and documentation, collaborating with legal partners, and staying updated on changing requirements. HR and Employee Management: Automates administrative tasks, simplifies digital processes, and provides a centralized platform for managing employees, while legal and compliance tasks are handled by experts.

Distinction between PEO and Global PEO:

PEO (Professional Employer Organization): Co-employs a company's employees, requires a legal entity in each country where an employee resides, handles general HR tasks and administrative duties, and may have minimum employee requirements. Global PEO: Acts as the legal employer of international workers, likely has local entities in workers' countries, handles various tasks including onboarding, contracts, payroll services, insurance, legal compliance, and requires no minimum employee requirements.

Benefits of Global PEO Outsourcing:

Time and Energy Savings: Allows HR teams to focus on core business needs by delegating international expansion tasks to experts. Cost-Effective Savings: Invests in long-term savings through robotic process automation and efficiency gains. Access to Global Talent: Enables hiring from anywhere in the world without geographical constraints, tapping into the best talent available. Local Compliance: Ensures compliance with local laws and regulations, mitigating legal and financial risks associated with international hiring. Global Expansion without Setting up Entities: Facilitates international hiring without the need to establish new business entities, saving time and resources. Employee Data Security: Ensures GDPR-compliant data security measures, protecting sensitive employee information from unauthorized access or breaches.

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