“International Employee Leasing may offer flexibility with administrative and fiscal advantages to the traditional independent.”

IF YOU are, say, an independent broker or IT specialist, have earning power in excess of £100,000 per annum and are wishing to take charge of your life and provide for your future without the administrative aggravation that goes with being self-employed, there still remain a number of attractive opportunities to structure your employment arrangements which can provide:

  • Superior adaptability with regard to when and where you work.
  • Superior flexibility in the type of assignments/projects to which you are detailed from time to time. (IT industry specialists, professionals, artisans, consultants and executives, among others, can all benefit from customised employment arrangements).
  • Custom made employment packages, taking into account your preferences for geographical location, working hours, vacation, family needs and other personal considerations which normal employment arrangements fail to address.
  • Standard group insurances, private medical insurance and pensions at rates not available to self-employed individuals.
  • Access to sound international trust companies administering such employee incentivisation vehicles as Employee Benefit Trust Funds (EBT’s). Properly structured, there can be generous contributions to EBT’s providing a meaningful incentive to creative and over-performing individuals.

Today, there exist a number of Republic of Ireland “international employee leasing companies” which employ personnel and supply their services on a global basis. However, the information contained in this article is primarily
directed at potential employees wishing to work or be placed in work in European Countries (EC).

Standard employment contracts are patterned after traditional employee leasing arrangements under which the services of the employees are leased to one or more parties, either directly or through intermediaries. A key feature of the employer/employee relationship is that the employment arrangements can be configured to accommodate the individual needs of the employee, and therefore can be tailored for use by diverse groups including IT industry specialists, brokers, athletes, members of the entertainment industry and entrepreneurs, to name but a few.

Employment arrangements typically involve the employee with three different corporate entities.

They are:

  • The Irish Employer (IE);
  • An Agency which is an independent leasing services company (Agency); and
  • An End User (End User).

To communicate clearly, the following description of the employment arrangements has been simplified. Each employment contract is customarily subject to modification and refinement to accommodate the needs and objectives of an employee’s particular situation.

DESCRIPTION OF EMPLOYMENT ARRANGEMENTS

An individual enters into a Service Agreement with IE. Under the terms of the Service Agreement, IE generally agrees:

  • to pay the individual a current monthly salary in an amount that is tailored to meet the individual’s personal current needs and preferences and is within industry norms;
  • to pay the individual’s reasonable business expenses; and 
  • to provide the individual with a variety of fringe benefits.

Upon securing the contractual rights to the services of the employee, IE may either:

  • enter into an Employee Subleasing Contract with an Agency with special expertise in placing individuals with the specific expertise of the employee; or
  • enter into an Employee Subleasing Contract with an End User having a current need for individuals with the specific expertise of the employee.

Under the terms of the agreement between IE and the Agencies and the End Users, IE agrees to supply the employee’s services to them in exchange for a fee commensurate with current market rates for the specific services to be performed and the level of skill of the employee.

In cases where the services of the employee are subleased to an Agency, the Agency will usually lease out the employee’s services to an End User earning a commission on the gross income generated by the work of the employee on their behalf. The gross contract receipts, less the commission earned by the Agency, are then paid to IE and are used by IE to fulfill its financial obligations to the employee.

IE is responsible for the payment of the employee’s salary, related national insurance and social security payments, and agreed business expenses not paid under contract by the Agency or End User. IE will also, from time to time, consider contributions to a variety of incentive schemes set up for the benefit of employees of the company. Such contributions, when voted at the company’s discretion, are generally made in trust to independent trustees known to the company and the employee. Once such payments are made, they cease to be an asset of IE and their management and distribution will become the responsibility of the independent trustee.

The foregoing description of employment arrangements barely touches upon the many potential benefits afforded to those who structure their working lives through an international employee leasing company. Aside from the obvious benefit of holding a flexible employment contract, there can also be significant reductions in the administrative and fiscal reporting work normally associated with being self-employed. This description has been, of necessity, highly simplified. If you would like to receive further information on this topic, you should communicate directly with your CHCL Fiduciary Group account manager who will be pleased to refer you to the appropriate Group professional, who will answer specific enquiries in depth and, upon request, present in some detail the pertinent legal and taxation authority supporting the integrity of the manner in which such employee/employer relationships are structured.