It’s no secret that higher education is an increasingly global endeavor. Besides sending a significant number of students to participate in study abroad programs (which has more than tripled in the past two decades), colleges and universities also engage in research projects, collaborations and countless other international activities.
To support these enterprises, universities may send their U.S.-based faculty and staff to work abroad on short- and long-term assignments. But these assignments frequently involve unfamiliar—and often overlooked—home- and host-country laws. Failure to comply with these laws can result in fines and reputational damage for the institution.
Don’t assume staff on a U.S. payroll are exempt from host-country taxes
This is probably the biggest misconception related to sending faculty and staff abroad, and it can have negative consequences for both the university and the individuals involved. An institution’s U.S.-expat and third-country-national (TCN) employees may be required to pay income and social security taxes to host-country authorities even if they remain on a U.S. payroll and continue paying U.S. taxes.
Residency laws vary by country, and in some cases workers are required to pay income and social taxes to local authorities after remaining in a country for just a single day.
Learn your employer obligations in the host country
If your staff must pay taxes in a host country, your institution will almost certainly be required to withhold individual income taxes (and possibly social taxes) in the host country and remit them to local authorities. Your institution may also have to register as a legal entity in the host country and fulfill other obligations, such as making quarterly and annual regulatory filings.
Ensure that your staff complies with immigration requirements
It is not uncommon for a faculty or staff member to assume that a tourist visa is sufficient for a U.S.-expat or TCN employee working abroad on behalf of a U.S. institution. Often a work visa—not a tourist visa—is required even for short-term assignments. Failure to comply with visa and work-permit requirements can result in fines, deportation and even imprisonment.
Watch for hidden costs and budget appropriately
If you don’t understand host-country employer obligations before sending staff abroad, you may wind up with a budget shortfall. After accounting for tax equalization, tax services, benefits, cost-of-living allowances and other factors, the cost of sending an employee abroad may be two to three times the annual salary of that employee.
Avoid “cash in a suitcase”
Paying for program expenses abroad can be challenging given obstacles related to foreign bank accounts, wiring money and finding vendors that accept credit cards. Still, administrators should avoid issuing cash advances—cash in a suitcase—to employees prior to a trip to pay for host-country program expenditures.
This can significantly degrade an institution’s financial control and put travelers at risk of being robbed. In addition, a traveler typically must declare cash amounts over a certain limit to immigration officials, and failure to comply can lead to asset seizure and arrest.
Develop a global mobility policy
Colleges should develop a global mobility policy to establish consistent practices for engaging individuals legally in a foreign country as employees (or contractors) and for supporting these individuals from the home campus. Global mobility policies should also address tax equalization, establishing appropriate compensation, health and safety plans, and obtaining medical insurance in the host country.
Central point of contact
If your institution has significant international activity, consider naming a central office to be responsible for developing international health and safety policies, and for providing cultural training and other country-specific information. This office is the single point of contact for travelers in the event of emergencies.
In addition, keep all travel, health and safety policies, emergency-preparedness plans, and travelers’ links on a single, dedicated, well-publicized web page.
John Bostwick is a technical writer for the Higher Education and Non-Profits practice at Radius. Prior to working at Radius, he held various positions within Harvard University’s central administration, most recently as a writer and developer of financial policy.