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Onboard your employees in Switzerland with Global Employer of Record service

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  1. Overview: Switzerland
  2. Global PEO and payroll
  3. Global HR Compliance
  4. Work Permit for Hiring Expats via EOR & PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
  7. Global Payroll Calculator
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Are you looking to engage and pay offshore IT developers in Switzerland?

Find out how you can make an informed decision on whether you should engage and pay employees or independent contractors using our free ‘Employee vs. Independent Contractor’ Checklist.

Designed to be used by companies engaging remote workforce in Switzerland, the checklist is the best way to define why and in what cases companies should onboard new hires or convert existing contractors/freelancers into employees without missing any crucial aspects.

 

What Our Clients Are Saying?

I’d like to share my experience dealing with Acumen International company.

Speed & responsiveness: Very prompt in response from my first enquiry about converting contractors into employees to follow up questions.

Completeness of information: I like how detailed the estimates and the transparency makes us feel more confident in knowing where the money goes to.

Overall experience: I am pleased and impressed with how fast they respond to my enquiries. We can trust the company to employ the contractors we want to keep.

Quah Shen Dee,
People Success Officer

I always found Acumen International very supportive, professional and helpful. They pay salary on time and are always ready to sort out any issues that arise.

I must admit I truly enjoy my time as an Acumen International employee and feel like they care about me as an individual. I have my own dedicated manager that provides me with detailed explanations when it’s needed. Payments are always prompt and the entire team does its best to respond to any of my questions.

I highly recommend Acumen International to anyone that requires their services.

Andrew Yanchurevich,
COO


Contractors Vs. Employees Knowing The Difference

Misclassification of employees is a common problem for global companies that are looking to expand their teams. Companies can face legal and business issues if they misclassify employees, including:

  1. Inaccurate tax reporting
  2. Non-compliance with local and international employment laws
  3. Greater likelihood of employee and insurance company lawsuits
  4. Decreased retention because independent contractors may feel insecure and like second-class citizens.

Companies must take action when they begin to hire or outsource their services to mitigate these risks and ensure compliance with local labour law. By following a checklist that addresses the most important issues related to working with contractors, you can be sure that your business will remain compliant and avoid the costly consequences of employee misclassification.

Why Convert Independent Contractors to Employees?

1. Avoid Misclassification Risk

It is not uncommon for an employer to misclassify an employee as an independent contractor. An employer may misclassify an employee in order to save on taxes, overtime, and worker compensation. Working with Independent Contractors is also an invitation to a potential lawsuit. The employer can be found liable if the tax authorities come after him for employee misclassification.

The tax authorities have been cracking down on independent contractors who are not, in fact, independent but rather full-time employees. This happens when a company misclassifies an employee as an independent contractor. Workers misclassified as independent contractors are not provided with certain benefits that are available to employees. These include unemployment taxes and workers’ compensation insurance.

The tax benefits of hiring independent contractors are only available for employers if the contractor is treated like one. That means they should be able to negotiate with you over their hours, rates, and projects; they should have ultimate control over how and where their work is done, and they should have the freedom to offer their services to multiple employers at once and incur entrepreneurial risk. If your employee seems more like an independent contractor, you should ask yourself why you are treating them like an employee and what are your potential misclassification risks.

If your workers were misclassified, you can be held responsible as an employer for back taxes owed on their behalf.

The tax authorities have developed multi-faceted tests they use to determine whether someone is an employee or an independent contractor. It includes factors such as

  1. whether a worker can substitute someone else to do their work; 
  2. whether they have control over how they perform their work; 
  3. whether they own their tools (as opposed to renting or borrowing them);
  4. whether they perform work outside their employer’s place of business (which would indicate they are part of the company). 

2. Avoid Under-taxation

Independent contractors (ICs) are self-employed individuals, and as such, they are allowed to deduct a range of expenses from their gross income that employees are not allowed to.

Independent contractors are not subject to the same tax laws as employees. Instead of paying a fixed amount of money in taxes yearly, they pay a percentage of their income. In other words, they get to deduct expenses that employees cannot. Most independent contractors are subject to a wider range of tax deductions than employees. Take equipment purchases, office rent, or communications and travel expenses, for example.

3. The Independent Contractor Is an Asset for Your Company

Their work is exceptional and their skills and expertise are unique. You can’t afford to lose them.

You may think that Independent Contractors aren’t worth the hassle or expense of adding to your payroll, but here’s why they are invaluable to your company:

4. Independent Contractors Demonstrate a Good Work Ethic

Independent Contractors have a good work ethic and reliability when it comes to their job. They know the value of their time and services and don’t waste any time with unproductive tasks that do not add value to their output. This is excellent for any company concerned about maximizing its productivity.

5. Independent Contractors Have Unique Expertise

They are smart. Independent contractors tend to be highly skilled and knowledgeable professionals with many years of experience under their belts. As such, they bring a wealth of wisdom and insight with them as team members. They have unique capabilities that can help your business succeed in new ways.  Not just anyone can be an independent contractor— they must have skills and expertise that are unique and difficult to find elsewhere. 

Independent Contractors understand that their work is important—it’s more than just a job for them; it’s something they take pride in doing well. They have a sense of ownership regarding their role in the company, which means they’ll never shirk from meticulous work. If there’s ever an issue with quality or delivery, you won’t see them making excuses.

6. Independent Contractors Are Loyal and Passionate

Independent contractors take great pride in their work. They often choose a few companies on which to focus their efforts; they don’t hop from job to job. As such, they tend to have more loyalty toward your company as a client and will want to do their best for you. Independent contractors are passionate about their work. They want to be challenged, and they want to make a difference. They’re invested in the success of your business, even if it doesn’t always feel like it. 

How Global EOR Facilitates Contractor to Employee Transitions

The benefits of converting contractors to employees, enhanced by using a Global Employer of Record, include:

  1. Enhanced Legal Compliance: Ensures adherence to employment laws, reducing misclassification risks.
  2. Cost Efficiency: Potentially lowers overall costs through streamlined payroll and benefit management.
  3. Increased Worker Loyalty: Converts to higher engagement and commitment, improving productivity and company culture.
  4. Access to a Broader Talent Pool: Attracts those seeking employment stability and benefits.
  5. Risk Mitigation: Lowers legal disputes and fines risks.
  6. Simplified Administration: Eases the administrative burden by outsourcing HR tasks.
  7. Improved Resource Allocation: Allows for more effective project and task distribution.
  8. Better Training Opportunities: Offers more development programs for skill enhancement.
  9. Enhanced Company Culture: Fosters a stronger sense of belonging and job satisfaction.
  10. Streamlined Communication: Simplifies internal communication processes.

When businesses make the strategic shift from engaging independent contractors to hiring full-time employees, they unlock a host of valuable benefits. This transition, often facilitated by global EORs, goes beyond mere compliance; it offers many advantages that can reshape an organization’s dynamics and performance.

Unlocking Value: Six Benefits of Converting Contractors to Employees

The benefits of transitioning from contractors to employees extend beyond compliance with labour laws. It encompasses cost-efficiency, heightened loyalty and commitment, risk mitigation, broader talent acquisition, workforce stability, and simplified HR management. Global PEO solutions play a pivotal role in realizing these advantages, making the shift a strategic move for businesses looking to thrive in today’s global economy.

Here are some of the key benefits:

  1. Cost Savings: Transitioning to an employee model can result in significant cost savings. While independent contractors may charge higher hourly rates or project fees, employees often incur more predictable and manageable costs. This includes standardizing salaries, reducing contract-related expenses, and streamlining benefit packages.
  2. Enhanced Loyalty: Employees exhibit higher commitment and loyalty levels than contractors. They feel more integrated into the company culture, which can lead to increased productivity, better teamwork, and a positive impact on overall employee morale.
  3. Risk Reduction: One of the primary motivations for converting contractors to employees is risk reduction. Proper classification and adherence to labour laws significantly lower the risk of legal disputes and fines related to misclassification. Global EORs are crucial in ensuring compliance with local regulations across multiple jurisdictions.
  4. Access to a Broader Talent Pool: As a business transitions to offering full-time employment, it becomes more appealing to a broader talent pool. Some professionals prefer the stability, benefits, and career growth opportunities that come with employment, making it easier to attract top-tier talent.
  5. Improved Workforce Stability: A workforce composed of committed employees often experiences greater stability. Lower turnover rates mean reduced recruitment and training costs and a more experienced team can contribute to better business continuity.
  6. Efficient HR Management: Outsourcing HR tasks to a PEO streamlines administrative processes. This allows companies to focus on their core operations, leaving HR experts to handle payroll, benefits, and compliance-related tasks.

Mitigating Permanent Establishment Risks with Global EOR

Utilizing a Global Employer of Record (EOR) significantly reduces the risk of inadvertently establishing a permanent business presence in a foreign jurisdiction, or ‘permanent establishment’. This is crucial for companies employing workers overseas, especially in regions where they lack a formal business entity. A permanent establishment can lead to complex tax obligations and regulatory compliance requirements. By partnering with a Global EOR, businesses can navigate these challenges effectively. The Global EOR’s expertise in local employment and tax laws ensures that international staffing does not unintentionally trigger these liabilities, providing the client company peace of mind and legal safeguarding.

Streamlining Compliance: EOR in Contractor-to-Employee Transition for Risk Mitigation

In our role as a Global Employer of Record, Express Global Employment is dedicated to addressing the “how” and “why” of contractor-to-employee transitions with a focus on risk mitigation. Our tailored solutions are designed to handle this process’s legal and payroll complexities efficiently.

Our approach is driven by practicality and the delivery of tangible value to our clients. We understand that every business operates in a unique context, which is why we take the time to navigate the specific requirements of each jurisdiction where our clients operate. This commitment to detail ensures compliance with local laws and regulations across 190 countries, reducing the risks associated with employee misclassification and permanent establishment.

To achieve this, we take on the intricacies of employment contracts, ensuring they align with the legal framework of each jurisdiction. We also ensure that our clients adhere to local labour laws and fulfil their tax obligations accurately. This comprehensive approach results in a secure and efficient transition process customized to the specific needs of each business we partner with. Our ultimate goal is to provide peace of mind and legal compliance as our clients navigate the complex landscape of contractor-to-employee transitions.


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the ‘Employee vs Independent Contractor’ Checklist

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