Columbia departments may wish to appoint and directly employ individuals based outside the U.S. (to work either in their home country or another country). This requires careful review of the host country’s labor and tax laws and practices, and a customized plan for how employer obligations will be met. Issues to consider include:
→ Does the host country require that employment arrangements be documented in formal agreements that comply with local laws? Are employees entitled to benefits not available through Columbia?
→ Does the host country require that individuals be employed through a local employer registered with authorities in that country? If so, how will this requirement be met without exposing Columbia to overseas tax, regulatory, and legal regimes? Does CU already have an entity operating in that country?
→ Is the University prepared to meet any local customs and regulations that protect employees? For example, are employees protected against termination without cause? How much notice and what severance payments are required? (The U.S. concept of “at will” employment generally does not apply overseas.)
→ How will the University comply with local employer obligations, such as tax registrations, withholdings, retirement, social benefit, and other benefits required under applicable law?
→ Does Columbia have any special exemptions or arrangements with local authorities granting tax and other exemptions? Are there tax and other treaties between the U.S. and the overseas country which may provide relief from certain employer obligations?
Advantages: The University retains oversight of its research and academic activities, and can have reasonable confidence in the qualifications and performance of its employees.
Disadvantages: Compliance with host-county regulatory and tax requirements can be complex and expensive to meet. Appropriate programmatic oversight of activities from a distance can be challenging.
This type of arrangement is not risk-free for Columbia because employment requirements can be defined differently by country; risks would need to be evaluated in light of the particular circumstances and local law. For this reason, these types of arrangements should be made with the assistance of central administration; in this case, units should involve the Office of the General Counsel, Human Resources and the Office of the Controller.