Glossary
Definitions for key terms in global employment, EOR, payroll, compliance, and international HR.
An additional month's salary paid annually as a mandatory bonus in countries like the Philippines, Brazil, and several Latin American nations.
An employment arrangement (primarily in the US) where either party can terminate the relationship at any time without cause, subject to certain legal protections.
Singapore's mandatory savings scheme where employers and employees contribute to retirement, housing, and healthcare funds.
A contract negotiated between employers and a labor union covering wages, hours, benefits, and working conditions for a group of employees.
A legal contract between a company and an independent contractor defining the scope of work, payment terms, intellectual property rights, and termination conditions.
A treaty between two countries preventing individuals or companies from being taxed twice on the same income across both jurisdictions.
A third-party organization that legally employs workers on behalf of another company, handling payroll, tax compliance, benefits, and HR administration in the worker's country.
The process of paying employees across multiple countries while complying with each country's tax, labor, and reporting requirements.
An end-of-service benefit common in Middle Eastern countries (UAE, Saudi Arabia) paid to employees upon termination, calculated based on tenure and salary.
A self-employed individual who provides services to a client under a contract, maintaining control over how and when the work is performed.
The amount of time an employee or employer must provide before terminating employment. Mandatory notice periods are defined by local labor law.
The process of formally ending an employee's tenure with a company, including final pay, benefits termination, equipment return, and knowledge transfer.
The process of integrating a new employee into an organization including paperwork, orientation, training, and compliance verification.
A co-employment arrangement where the PEO shares employer responsibilities. Unlike EOR, the client company must have a local legal entity.
A fixed place of business that gives rise to tax obligations in a foreign country. Hiring through an EOR helps avoid creating a PE.
An initial employment period during which an employer evaluates a new hire's performance. Duration and rules vary significantly by country.
The legal authorization for an individual to be employed in a specific country, typically verified through work permits or visa documentation.
Legally mandated employee benefits that vary by country, such as health insurance, pension contributions, paid leave, and social security.
Compensation provided to employees upon termination of employment, often mandated by law based on length of service and reason for termination.
Government-mandated insurance programs covering healthcare, pensions, unemployment, and disability, funded through employer and employee contributions.
Saudi Arabia's quota system requiring private-sector companies to employ a minimum percentage of Saudi nationals.
The full cost of employing a worker including base salary, taxes, benefits, insurance, EOR fees, and any other mandatory contributions.
Incorrectly categorizing a worker as an independent contractor when they should be classified as an employee, which can result in legal penalties and back taxes.
Government-issued authorization allowing a foreign national to legally work in a country. Requirements vary by jurisdiction.
A mandatory electronic salary transfer system used in UAE and other Gulf states to ensure employees are paid on time and in full.
Our team of global employment experts can help clarify any aspect of international hiring and compliance.