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Hiring and Staffing Abroad

Three people sitting around a table in a library.
 

Here is an overview of the five employment options Cornell has vetted for staffing international projects. You can also download our quick reference guide.

  1. Partner with an Established Organization in the Host Country

  2. Hire Through One of Cornell’s Foreign Legal Entities
  3. Contract with a Professional Employer Organization
  4. Use Staff Who Remain on or Join the Cornell Payroll
  5. Use Independent Contractors

Be sure to analyze the budget implications beyond the salary or payment provided to the employee or contractor as you evaluate these options. Some options require substantial lead time. Plan to allow at least six to eight weeks to complete your HR process.

Also remember to work closely with your college or unit HR department on your staffing decision. The information below will inform you about each option but should not be seen as a replacement for consulting the international HR director, who must also approve the selected option.


1. Partner with an Established Organization in the Host Country

Working with a local partner, such as a peer university or non-governmental organization, in the host country to employ local staff—and in some cases, U.S. expats or third-country nationals (TCN)—can be significantly simpler than hiring staff directly. 

Cornell colleges and departments are responsible for identifying and vetting the partner organization and negotiating the service agreement. These partners are often found through pre-existing research relationships. Global Operations, the Office of the University Counsel (OUC), and the Office of Sponsored Programs (OSP) can advise on the service agreement.

In this arrangement, the staff are employees of the local organization, and the administrative requirements associated with their employment are the responsibility of the local organization.

Considering this option early on can make it easier to fold staff into services provided by existing subcontractors or local service providers, and correctly set expectations for employees.

Key Considerations

Pros

  • Fast implementation relative to other options
  • Potential for office space
  • Limited risk for university
  • Partner responsible for tax and labor law compliance
  • Partner administrative fee typically less than other options

Cons

  • Visa sponsorship may not be available
  • Little or no control over benefits
  • Potential for conflicts of interest

Budget Implications

  • Salary
  • Fringe expense to cover employer-sponsored benefits and employer-owed taxes
  • Partner's monthly administrative fee to cover cost of adding employee to payroll (typically 5–10 percent of salary)
  • Visa sponsorship fees, if necessary

2. Hire Through One of Cornell’s Foreign Legal Entities

In countries where there is an existing Cornell-affiliated office or legal entity, that office may be able to employ staff for your project. In some cases, they may also be able to rent office space to your project.

The suitability of this option depends on the specific job duties and how the office was originally formed. For example, some offices have a scope legally limited to particular types of work.

Key Considerations

Pros

  • Cornell University affiliation
  • Potential for office space
  • Potential for access to Cornell systems (online libraries, shared drives, etc.)
  • Low administrative fee (typically at cost with no additional mark-up)

Cons

  • Benefits vary by entity
  • Visa sponsorship limited
  • Office space not guaranteed

Budget Implications

  • Salary
  • Fringe expense to cover employer-sponsored benefits and employer-owed taxes
  • Entity's monthly administrative fee to cover cost of adding employee to payroll (up to 15 percent of total compensation)
  • Visa sponsorship fees, if necessary

Cornell Entities and Affiliates

  • Ezra (Beijing) Business Consulting Co. Ltd., China

  • Cornell-in-India Private Limited, India
  • Cornell Education Research Foundation, India

3. Contract with a Professional Employer Organization

A professional employer organization (PEO) provides employment services, including human resources and payroll services, similar to a temporary staffing agency. Global Operations manages Cornell’s relationship with several global PEO firms and can guide you through this option, if it’s right for your project.

Contracting with a PEO is an option when a small number of employees are needed in a specific location for a limited period of time. In this model, the individuals are employed by the PEO and provide services to the department, college, or school. The PEO is responsible for all employment law, tax, and reporting requirements. Because Cornell may share liability if the PEO fails to comply with the law, however, such relationships must be closely monitored.

Key Considerations

Pros

  • Widely available
  • Limited risk for Cornell
  • PEO responsible for tax and labor law compliance
  • Potential to source office space
  • Potential for visa sponsorship

Cons

  • High administrative costs
  • Little or no control over benefits
  • Potential for joint-employer liability

Budget Implications

  • Salary
  • Fringe expense to cover employer-sponsored benefits and employer-owed taxes
  • PEO’s monthly service fee (10–15 percent of compensation, or a minimum of $750–$1,200 per employee)
  • PEO one-time onboarding fee ($500–1,000 per employee)
  • Visa sponsorship fees, if necessary

4. Use Staff Who Remain on or Join the Cornell Payroll

If your project doesn’t need full-time in-country staffing, frequent business travel by U.S.-based staff may be an acceptable solution. This approach may avoid many of the complications of employing someone based in a foreign location. It is only an option if the employee resides in the U.S. for more than six months per year and maintains a U.S. address.

Combining this option with another hiring option can also be a good solution. For example, local nationals could be hired through a local partner (option 1), and then the U.S.-based staff could travel to train the locals and provide oversight. As long as the employees spend more than six months of the year in the U.S., they will usually be considered based in the U.S. and can be paid through the Cornell payroll.

Key Considerations

Pros

  • Avoids foreign employment complications
  • Full Cornell University affiliations, benefits, and access

Cons

  • Can be difficult to accurately predict travel within the tax threshold
  • Travel expenses can add up
  • Business and work activities may be limited
  • Visa and work authorization requirements can be costly, time-consuming, and require sponsorship
  • Use of office space abroad can trigger permanent establishment and tax liabilities
  • Overstays can trigger individual income tax and payroll tax obligations

Budget Implications

  • Salary
  • Fringe expense to cover employer-sponsored benefits and employer-owed taxes
  • Travel expenses (flights, lodging, per diems, visa and passport fees, immunizations, etc.)

5. Use Independent Contractors

Enlisting an independent contractor (IC) can be more straightforward than hiring an employee, but every country has different rules about the distinction between contractors and employees. Work closely with your unit’s international IC representative to submit contractor classification evaluations and develop agreements using Icertis, Cornell’s online contract management system.

In most countries, workers are assumed to be employees unless they qualify as contractors by meeting certain criteria. The following factors may influence the classification:

  • Duration of assignment

  • Percentage of time spent on Cornell projects in aggregate
  • Control over how, when, and where the work is done
  • An established business as a contractor doing similar work for clients other than Cornell
  • Use of own offices or facilities and equipment
  • Payment of own business expenses
  • Compensation based solely on services rendered (no vacation/holiday pay or employer-sponsored benefits like health insurance)

Some countries may require ICs to register as businesses and/or collect a service tax or value-added tax (VAT) from their customers, including Cornell. Cornell leaves these matters as the responsibility of the IC. A few countries require employer-like obligations (for instance, tax withholding) for institutions engaging contractors.

In what is becoming a worldwide trend, the market is experiencing more incidents of IC misclassification. If an IC is later found to be an employee—which may happen in the case of a dispute—the university could have significant liability for retroactive payroll taxes, payroll withholdings, vacation, severance, and any applicable fees and penalties. These costs will be charged to the department administering the project.

Key Considerations

Pros

  • Fast implementation relative to other options
  • IC responsible for tax compliance in most cases
  • IC responsible for work/office space
  • IC responsible for obtaining visa sponsorship, if needed

Cons

  • No Cornell University affiliation
  • Increasing contractor restrictions worldwide
  • Triple damages for misclassification
  • Not a viable long-term solution

Budget Implications

  • Service fees
  • Any other costs agreed to in the contract (for example, travel expenses)
  • Country-required expenses for tax withholding and reporting requirements, in rare cases