Who are Expatriate Employees and Are you Considered One
We’ve all been hearing this term expat employee or expatriate worker. Living abroad and working on expat assignments are part of being an expat employee. Sometimes, the assignments are short, and sometimes it takes more than a year. Other times, expat employees travel from one country to another to complete their job tasks. So what exactly does it mean? In this article, we will explore the definition and what exactly it is to be an expatriate employee.
Definition of Expatriate Employees
A person living/working in a country other than his or her country of citizenship is considered an expat. Expatriate employees are often working in another country temporarily. Expatriates employees are often sent abroad by a multinational employer (profit or non-profit) on a long-term job assignment over a yea. Often the organization has to send a senior manager to oversee the operation abroad or set up a new branch office. Often there will be local nationals in the office – which would be the employes that are citizens of the country or have been domiciled there for a long period of time.
Understanding Expat Employees
When it comes to expat workers, they earn more than they would at home, and more than local employees. Furthermore, if you’ve chosen to become an expat employee, your company will also give your expat employee benefits such as relocation assistance and housing allowance. Becoming an expatriate has a lot of benefits from getting opportunities for career advancement and global business exposure to living abroad and exploring exotic cities and cultures.
On the other hand, it can also be a difficult transition emotionally for some expats as they will have to leave their friends and family back home and adjust to a new culture and work environment. It is also one of the main reasons why companies offer higher compensation to expat workers.
Expat Employees are Special
Generally, expatriate employees expect and deserve higher levels of pay, international health insurance, benefits and more from global employers for a variety of reasons:
- Expats are often in high demand and their positions are more often than not senior management level
- They fulfil important positions abroad that are critical for your organization’s financial success
- International experience is considered to be requiring additional income
- Expats are moving abroad by themselves and especially with their families are making a big financial and emotional commitment. Picking up stakes and moving your life abroad to a new country is also a big deal
- Expat assignments are expensive. Not only do they often get paid more, but you have to factor in costs such as housing, schools, insurance, travel and much more.
Who are Expatriate Employees?
Expat employees are a professional or skilled worker in his or her profession. The employer can become an expat employee by taking job opportunities outside of their home country, either independently or through his or her employer. The employer can be a company, university, government, or even non-governmental organization. A simple example is if you are working in the Silicon Valley office, and your employer sends you to work for a year in its Hong Kong office. In the Hong Kong office, you’re an expatriate employee.
Who is NOT considered as Expat Employee?
Business travelers are those who are still employed and have a payroll with their employers in the home country. They can be sent on short- term global mobility assignments, and their place of employment are still in the home country. For example, someone can go overseas on a business trip for a few days or longer, yet it’ll still be a short-term assignment. Most business traveling employees are going on trips under 6 months.
An accidental expat is when a business traveler stays overseas for too long, and sometimes with the host country law, the place of employment may shift to the host country. They may end up working for a year, coming home only on the weekends. In such a scenario, business travel risks becoming an accidental expatriate. In other cases, even global nomads who move to one country to another without returning home become an accidental expat. The COVID-19 pandemic has certainly added a lot of accidental expats as employees who were traveling are now stranded in overseas locations.
Other than business travelers, another type of false expatriate employees is foreign hire. Multinational companies occasionally recruit candidates from one country to work in another country. For example, contractors in the Middle East recruit laborers from Indonesia, Phillippines, and other developing Asian countries.
Another example is giant tech companies in the USA recruiting graduates from top universities in India for jobs in California. Foreign hires also include US multinational companies hiring American security guards to work in the Middle East. All these employees are considered foreign hire and not expatriate employees because their employer is in just one country. However, one may certainly disagree with this description – you might just call these valued hires expats.
Some global mobility managers will not consider contractors employees if the person is sent or hired abroad for a short or long term assignment. They are not on the company payroll and are often considered contractors or consulting employees. However, if that “contractor” is only working for your company and certainly if the contract is extended beyond a year, is he or she really a contractor? If something goes wrong or if there is a sickness or injury, that expat contractor might be seen as an employee by the courts – local or back in the home country.
We have written some articles on the global mobility manager’s duty of care. It is a hot topic in global mobility circles these days. Suffice to say, it is critical for managers to ensure that expat employees, local nationals, contractors, and business travelers are protected and well insured. All too often we see people sent abroad for short and long term assignments with inadequate global healthcare coverage, disability, evacuation, and life insurance coverage on a group or individual basis.
Many expat employers do not place adequate kidnap and ransom coverage for employees in high-risk locations. This puts employees and employers at risk – either because global mobility managers are not being well-advised or the employer wants to save money. Many countries, including the USA and Canada, have issued guidelines for meeting the duty of care for overseas employees. This can extend to adequate insurance, but also health and safety as well. International employers need to take a proactive stance to insure, prepare, and protect their employees everywhere.
As part of TFG Global Insurance Solutions Ltd, we are able to discuss your duty of care from an expat insurance specialist perspective. If your organization would like to have us examine your global benefits plan, please feel free to reach out to us today. If possible, you can send us the details on your global health insurance plans, expat census, and contracts. We have often been able to find holes in current insurance coverage that was putting