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Article

20 min read

The Enterprise Guide to Global Compliance Management in 2024

Legal & compliance

Author

Jemima Owen-Jones

Published

March 01, 2024

Last Update

July 04, 2024

Table of Contents

Global hiring compliance

Merges and acquisitions compliance

Worker classification compliance

Localized contract compliance

Documentation compliance

Benefits administration compliance

Payroll and tax compliance

Equipment management compliance

Equity management compliance

Background check compliance

Work authorization compliance

Regulatory update compliance

Workforce compliance

Termination compliance

Data privacy and protection compliance

Stay compliant globally with Deel

Key takeaways
  1. Expanding internationally is crucial for enterprise businesses, but it can be a complex and costly process that requires collaboration across multiple teams.
  2. Despite significant investments, many enterprises struggle to establish internal teams with expertise in global regulatory compliance or find effective compliance technology to support their expansion plans.
  3. Deel's global HR and compliance platform provides enterprises with the necessary tools and expertise to implement a robust compliance program to meet legal obligations in every country where they operate.

Adhering to diverse legal requirements can be complex and overwhelming for enterprise organizations. For international enterprises that operate across jurisdictions, their global presence requires navigating various legal and regulatory environments while managing a widely dispersed workforce. 

Despite significant expenditures, many enterprise companies struggle to develop internal teams with expertise in global regulatory compliance or find effective compliance management software to keep pace with their expansion plans. 

Outsourcing specialized tasks related to labor laws, tax regulations, or data privacy to local legal teams may provide a temporary solution. Still, it can be costly and make it difficult to apply global compliance processes and policies and maintain a cohesive compliance culture in the long run. 

This guide explores how a global HR and compliance platform such as Deel's provides enterprises with the necessary tools and expertise to build a world-class compliance management system and operate confidently and efficiently internationally.

Global hiring compliance

Enterprise organizations face many compliance hurdles when it comes to hiring employees in new markets, which can result in the need to open a new foreign subsidiary to avoid permanent establishment (PE). This process can be both costly and time-consuming.

Deel’s HR and compliance platform has a built-in employer of record (EOR) solution, empowering you to expand your business and hire employees in new markets quickly and efficiently without the cost and ongoing administration of opening an entity. 

Deel has entities in 50 countries (and counting), and we manage the entire employment process, taking on all employment liability and ensuring compliance with local laws.

In addition, Deel’s platform has an agent of record (AOR) solution called Deel Shield for hiring contractors compliantly. As your AOR, Deel takes full liability, allowing you to focus on growing your global workforce without worrying about accurate classification, contractor agreement localization, and compliant contractor payments.

✨ Discover how SiteMinder confidently expanded in global markets while staying compliant with Deel.

Deel is currently supporting us with around 52 employees spread out across around 11 countries at the moment,” said Donelly. “The benefits of Deel’s dashboard allow us to effectively manage these 52 people from one platform. It also allows greater efficiencies for our payroll teams globally.

Bec Donnelly,

Vice President of People, SiteMinder

Merges and acquisitions compliance

Onboarding new team members compliantly after an acquisition, particularly when they’re located in different countries, can be a time-consuming process. Additionally, employees undergoing a business transfer are entitled to certain legal protections that vary by country, which can further complicate the process.

To expedite the migration of employees to a new firm or entity, acquirers can leverage the EOR service as a stopgap solution, streamlining the process and eliminating the need for a transitional services agreement (TSA).

By using Deel's EOR service, enterprises can avoid investing in new legal entities or hiring additional HR staff, which can be costly and time-consuming. This can result in significant cost savings, with Deel estimating over $210,000 in entity set-up costs per country.

✨ Discover how EEG managed its acquisition and absorbed over 30 contractors with Deel.

Deel helped facilitate EEG’s onboarding of the entire team and provided a solution to centralize their global payroll. With locally compliant documents and flexible payment options, Deel transformed days of work into a few hours and made managing acquisitions a breeze. Since then, EEG has onboarded 48 team members, spanning 20 different countries.

EEG,

esports and online gambling company, North America

Worker classification compliance

Navigating the intricacies of worker classification can be an overwhelming task for enterprises, especially with the constantly evolving guidelines and classification tests set by governmental bodies in different countries. 

With a global HR and compliance platform like Deel’s, you can access a powerful AI-based worker classifier that can accurately assess the classification of your workers worldwide. This way, your internal legal team can avoid spending countless hours researching new classification laws and potentially risking misclassification.

Partnered with Queen's University, Deel's misclassification assessment is localized in 15 countries, using award-winning research and localized employment count cases to classify your workers with over 90% accuracy. All you need to do is answer a few questions, and the software will determine the worker's classification using relevant local laws and precedent legal cases.

✨ Discover how Project44 saves around $500k a year since switching to Deel Shield.

Deel Shield gave us peace of mind when hiring people as contractors in any part of the world. I don’t have to worry anymore about compliance. It feels much safer.

Chloe Riesenberg,

People Specialist, Project44

Localized contract compliance

Enterprises operating across different countries must ensure that their work contracts comply with the legal requirements of each country where they are hiring. 

With a global HR and compliance platform like Deel’s, localized contract generation is integrated into the hiring process, eliminating the need for external or in-house legal departments. The platform's intuitive workflow guides you through every aspect of the contract, ensuring that you comply with the specific requirements of each country. 

Local legal experts vet every new contract created on the platform, ensuring they are up-to-date with the latest changes in labor laws and compliance requirements. The contracts are updated quarterly and stored securely in line with the highest global security standards.

Deel's platform also provides timely notifications to ensure you stay on top of all your contracts. You will receive notifications when a contract is awaiting signature, when it is nearing renewal, or if the worker wants to resign or discontinue the work arrangement.

✨ Discover how Fnatic unlocked global hiring with Deel’s compliant contracts and EOR.

By partnering with Deel, Fnatic has been able to accomplish things that otherwise would have been impossible. Deel didn't just make HR compliance and global payroll easier; it made them a reality. Being able to rely on compliant contracts and an efficient EOR partner unlocked doors for them to expand further into Asia and Europe to keep up with their growing audiences. What were once multiple blockers to scale are no longer an issue.

Fnatic,

E-Sports, Europe and Middle East

Documentation compliance

From work permits to tax forms and employment contracts, the list of compliance documents required to hire is extensive and varies from country to country. 

This process becomes simpler and more efficient with a global HR and compliance platform like Deel’s. Your HR team can benefit from streamlined HR document management and compliance features. The self-serve tools make it easy to upload and share documents securely, all of which are stored in a centralized cloud-based system. This gives your team complete control and oversight over your organization's compliance documents.

Deel's security features ensure that document management is even safer. With granular permissions, you can limit access to sensitive data. You can also manage data retention and deletion, track documents, view their status, and encrypt them to prevent unauthorized access.

Benefits administration compliance

Managing employee benefits globally involves enrolling employees in benefits plans, managing employee contributions, and ensuring employees receive the correct entitlements depending on local employment laws.  

To make this process easier, global HR and compliance platforms like Deel offer built-in benefits administration. Deel's platform has local experts who can handle all mandatory local benefits, such as health insurance and pensions, for you. This approach is often more cost-effective than negotiating with the benefit providers independently because Deel has partnered with many large providers, which means it has access to exclusive discounts.

In addition to mandatory benefits, Deel also offers non-mandatory benefits and perks to contribute towards worker satisfaction and talent attraction. For example, employees and contractors can enjoy the benefits of discounts on car rentals or gym memberships.

By using Deel's platform, you can ensure that your employees receive the benefits they deserve, comply with local laws, and save time and money.

Payroll and tax compliance

Payroll is another area fraught with compliance challenges due to the varied laws and regulations across different countries. 

Payroll compliance typically covers worker classification, eligibility, tax withholding and reporting, payment schedules, minimum wages, work-hour requirements, wage withholdings, government contributions, and tax filing. Often, enterprises use multiple local financial service providers to pay their global team.

Global HR and compliance platforms like Deel’s integrate global payroll into their service offering. Local payroll experts located throughout our wholly-owned legal entities ensure that all the necessary payroll taxes, social contributions, and other government fees are accurately paid. The platform also handles payslips and all other HR administration tasks. 

Moreover, with Deel, you can seamlessly run payroll for all worker categories, including direct employees, EOR employees, and independent contractors, without leaving the unified platform.

✨ Discover how BCG centralized payroll across 6 nations while enhancing employees’ experiences.

Before 2019, we had to use four [payroll] vendors for six countries, and each had a different way of operating… [switching to Deel] enabled us to standardize the entire process… all employees can use a single platform to view payslips, upload background checks, apply for leave, and more.

Rajes Rajamorganan,

SEA-Payroll Manager, BC

Equipment management compliance

In many jurisdictions, employers are legally required to provide equipment and technology to workers. For instance, countries like Mexico, El Salvador, Chile, and Russia have such provisions. 

Even if local laws do not specify the employer's obligation to provide or reimburse equipment, it's highly advisable to do so to ensure that you are fulfilling your basic duty of care towards your remote workers. 

Providing equipment also helps create a safe and conducive working environment. It's equally important to ensure that the equipment provided complies with local health and safety regulations. These regulations can be specific and vary from one region to another. 

Additionally, there are tax implications to consider when providing equipment to remote workers. If you purchase equipment for your remote workers or gift equipment to them, you must be aware of the tax implications. 

Global HR and compliance platforms like Deel's simplify equipment management for your remote workers. Deel's equipment partner, Hofy, handles all the logistics, including tax compliance, customs and shipping documents, and door-to-door delivery to over 150 countries. All devices provided by Hofy comply with local health and safety regulations, and we can retrieve equipment in line with tax and InfoSec compliance.

Equity management compliance

Granting and managing equity for a global team can be difficult to navigate. In addition to identifying the right equity type, your finance and compliance team must ensure you're operating compliantly in each market; the process can be a minefield for any legal team.

With a global HR and compliance platform like Deel's, you can offer competitive incentives to your employees and contractors worldwide through equity or token grants. Our local experts work to secure an optimal legal and tax framework, providing guidance around applicable employment taxes and withholdings and assisting with reporting requirements.

Background check compliance

Conducting background checks across different jurisdictions introduces several HR and legal challenges, such as navigating complex data protection laws, maintaining consent requirements, streamlining verification processes, and adhering to data transfer regulations. 

Unlike traditional screening services, which are built for local hires and take a long time to complete, global HR and compliance platforms like Deel's provide fast and globally compliant screening results in minutes, thanks to its AI-powered technology, speeding up your hiring process by around 80%.

Candidates can easily verify their identity through a mobile or desktop device, track the status of their background check, and access in-app support. Our background check partner, Certn, ensures that the results are GDPR compliant, SOC 2 compliant, SOC 3 compliant, and ISO 27001 certified. 

Work authorization compliance

Work authorization is a crucial aspect of global hiring that determines the eligibility of foreign nationals to work in a specific country. HR professionals must thoroughly understand the work authorization requirements of each country they hire in to ensure compliance with local laws. This also involves obtaining the necessary work visas or permits for foreign workers to avoid any legal issues.

Global HR and compliance platforms like Deel’s are designed to simplify the work authorization process. When you create a new employment contract, you automatically trigger the platform to identify the specific work authorization requirements in the country or region where you intend to hire. The system then requests the new hire to upload the necessary compliance documents, such as passports, visas, or green cards, to confirm that they are current and valid. 

In cases where the new hire doesn't have the necessary work authorization, you can use the platform's visa and immigration services to help them (and their dependents) obtain the required work authorization, making the entire process smooth and hassle-free.

✨ Discover how Quantium retained top talent with Deel's global mobility solutions.

Partnering with Deel, Quantium has been able to support and retain employees based in Canada, Italy, and the Netherlands. In addition to enabling compliant hiring abroad, Deel was also able to help retain an employee looking to work from the Netherlands through sponsoring a highly skilled migrant visa, which only took 2-3 weeks (talk about Deel speed)!

Lysette Randall,

Executive, HR Performance & Partnering, Quantium

Regulatory update compliance

In 2022, Thomson Reuters reported that 61,228 regulatory events occurred across 190 countries. This means an average of 234 daily alerts, indicating the overwhelming volume and pace of regulatory changes companies must keep up with. Despite the best efforts of governments and regulatory bodies to provide early notice and transitional periods for implementation, compliance teams often miss these changes, resulting in costly legal fees, penalties, and damage to the company's reputation.

Fortunately, global HR and compliance platforms like Deel's provide real-time compliance monitoring that uses automation to keep track of the ever-evolving regulatory landscape across 150 countries. This feature gives companies the confidence to hire and manage workers worldwide while meeting the highest compliance standards. The tool detects changes to employment laws across jurisdictions, such as wages, pensions, private insurance, leave policies, tax obligations, and more.

Moreover, the compliance monitor provides concise summaries of the impact on your business in plain language, making internal audits and risk management easier and saving your HR and compliance departments hundreds of hours that would otherwise have been spent on compliance tracking.

Workforce compliance

As your enterprise grows, so does your compliance risk. Each country has its own set of regulations that can impact your operations, workforce, and business structure. 

For instance, when hiring employees in different countries, you must know the laws and regulations that trigger permanent establishment. For example, in Argentina, a foreign company is considered to have PE status if it has over 50 employees working there for more than 183 days in a taxable year. In contrast, in Canada, a foreign company triggers PE status if it has more than ten employees working there for more than 183 days in a taxable year. In both cases, the foreign company must pay taxes on its income from local sources and file a tax return.

Similarly, in some countries, the distinction between a contractor and an employee can change based on how long the worker has been with the company, their responsibilities, and their level of control over their schedule. For instance, in Brazil, a contractor can work for a company under a fixed-term contract for a maximum of two years before the company must reclassify them as an employee. 

In Germany, a worker may need to become an employee if their income is primarily or entirely derived from the company or if their role is essential to the company's operations. In the United Kingdom, however, a contractor's earnings do not necessarily determine their classification.

Global HR and compliance platforms, like Deel’s, have built-in continuous compliance software that performs due diligence and generates workforce insights tailored to your business's unique concerns. No need to run manual risk assessments. 

You can access the workforce risk reports on the platform or receive them in your email monthly, which will alert you to any vulnerabilities, including misclassification risks, expiring visas, and non-compliance with employment laws such as minimum wages, benefits, and more.

Termination compliance

It is crucial for companies to be familiar with both local and federal laws related to termination before proceeding with the process. This is important to ensure that the termination process is carried out in accordance with all applicable regulations. Not understanding the legal nuances surrounding terminations can lead to legal issues and can be unfair to the employee. 

Global HR and compliance platforms like Deel's comprise local legal teams who can manage the complex legal process of terminations case-by-case on your behalf. With over 5000 terminations handled compliantly, you can rest assured that every termination is handled gracefully and respectfully, no matter where your employees reside.

Data privacy and protection compliance

Enterprise companies face multifaceted challenges in complying with diverse and evolving data protection and privacy laws across different countries. These challenges include navigating varied legal frameworks, managing cross-border data transfers under stringent restrictions, adapting to different consent and notification requirements, and committing substantial resources to implement necessary technical measures and staff training. 

A global HR and compliance platform like Deel's provides a range of global data management procedures and policies to ensure that you and your global hires’ data are protected. This includes a comprehensive data privacy policy that is updated regularly to remain compliant with global data security standards. The platform also offers data processing addendums (DPAs) that regulate several aspects of the data processing of two parties, including the purposes of processing, data transfer safeguards, and a list of sub-processors.

In addition, the platform has a data subject rights management procedure in place to ensure that the data subjects (employees or contractors hired through Deel) can exercise their rights toward the party processing their personal data. Deel has procedures for handling potential data breaches and has built its cybersecurity services to ensure continuous compliance with legal and regulatory requirements of operating in different jurisdictions.

Deel has a team of in-house legal experts and compliance managers specializing in data protection and privacy. In case of any data breaches or incidents, the team assists in responding to these incidents. 

The platform also has localized data processing agreements built into the contract creation process, covering you for privacy laws all around the globe. You can store and access every signed DPA agreement in a single place and authenticate access to your Deel account with a single sign-on. 

The platform's entire information security program is built on the ISO 27001 framework, and it is fully GDPR compliant, so your data remains encrypted.

Stay compliant globally with Deel

Staying ahead of compliance trends is crucial for maintaining a competitive edge. In 2024, these trends are likely to emphasize the importance of technology in compliance solutions. 

Deel's the future of global HR and corporate compliance technology, but it's a platform enterprises can use today. It works for enterprises wherever they operate, whatever the employment status of their workforce. It's built-in global hiring, contracts, visas, background checks, payroll, equipment, benefits, equity, salary insights, and more, made to help enterprises compliantly hire, manage, and pay anyone worry-free.

Whether you want to hire worldwide without opening legal entities, streamline HR for your global team, or reduce your compliance risk, Deel does it all. Plus, local legal experts teamed with the latest advancements in artificial intelligence and automation are there to support you every step of the way. 

Sounds like the solution you're looking for? Book a demo today to start your global compliance journey.

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