Under the extraordinary circumstances of the global pandemic, the University issued interim payroll guidance and processes that enable continuity in remote teaching and research while maintaining compliance with local employment, tax, and other regulations.
Employment is one of the most common international activities that we support. For years, Harvard Schools and departments have relied on several established hiring options for affiliates to conduct short- and long-term activities abroad.
The demand for short-term, temporary overseas work has increased due to pandemic-related travel restrictions, visa delays, and remote instruction. As such, the University has issued interim payroll guidance and processes. These processes enable Harvard Schools and departments to hire faculty, postdocs, other academics, staff, and student workers abroad according to the employment, benefits, tax, and immigration requirements where these affiliates are located.
3 Options for International Hires During the Pandemic
The options available depend on the location, the individual, and the work. Our office can help you determine the feasibility and administrative cost for each option outlined below.
Standard processing times to set up individuals on international payrolls are lengthy. Contact your School's or unit's GSS consultant as soon as possible because it takes 6-8 weeks to fully onboard an employee. Your prospective employee must submit all required documents in a timely manner to get on an international payroll cycle and avoid payment delays.
Similar to a temporary staffing agency, PEOs provide employment services, including human resource and payroll services, in nearly every country.
Harvard GSS manages the University’s relationship with several PEO firms and serves as the administrative/billing intermediary between the PEO and the Harvard department. The Harvard department signs an addendum with the PEO under our master service agreement.
Hiring via a Harvard-affiliated office is a potential option in 18 countries/territories; however, there may be limitations due to the office’s scope of work, type of registration in country, and its administrative/payroll bandwidth.
Harvard GSS acts as the initial intermediary between the affiliated overseas office and the Harvard department to help determine feasibility. If this option is available, the affiliated overseas office and the Harvard department may enter into a service agreement in coordination with School HR.
Partners include universities and non-governmental organizations, among others.
The Harvard department is responsible for sourcing and vetting a partner and negotiating the service agreement. Harvard’s Office of General Counsel, Office of Sponsored Programs, Strategic Procurement, and our office can advise on the agreement.
10 Criteria that Apply to the 3 Hiring Options
- Plan for 6-8 weeks’ processing time to get the individual on an international payroll; this processing time starts once the individual submits all required documentation (proof of citizenship, work authorization, etc.).
- Budget appropriately. The hiring department is responsible for all employment costs, which may include set-up and monthly administrative fees for processing, statutory benefits and tax contributions, and currency fluctuations.
- The in-country entity (not Harvard) is the employer of record, but the Harvard department manages/supervises the individual.
- The in-country entity is responsible for all payroll and statutory tax and benefits in the country of hire, and the Harvard department is billed for these costs.
- Individuals cannot start work until they sign the employment contract with the in-country entity. Working without a contract may violate local laws, result in payment delays, and have negative tax consequences for the employee.
- Individuals must be legally authorized to work in the country where they are located and provide proof of work authorization prior to hire.
- Individuals must be paid in the currency of the country where they are located, using a local bank account.
- Individuals are subject to the employee-paid taxes and benefits required by law in the country where they are located.
- Individuals are generally paid a salary (not an hourly rate).
- Individuals are generally paid monthly (not bi-weekly).
Frequently Asked Questions
In most cases, international payroll providers are unable to manage hourly payments. We can work with you to devise a suitable monthly amount.
Typically, payments are made once at the end of the month, but this could vary by country. If you choose to pay an employee outside of the payroll provider's typical payroll cycle, you will incur extra fees (which will be noted in the service agreement).
Based on employment regulations and practices, most countries require that employees be paid in the local currency. If you need to evaluate alternative options, please let your GSS consultant know about this when inquiring about suitable employment options to determine if an exception can be made in U.S. dollars.
Based on employment regulations and practices, most countries require that employees be paid via a local bank account. If you need to evaluate alternative options, please let your GSS consultant know about this when inquiring about suitable employment options. Payroll providers rarely make exceptions.
The process for determining exchange rates may vary by the payroll provider. For example, we use oanda.com to determine exchange rates for the PEO employment agreements, whereas other providers may use an historical average from the previous payroll period. Let your GSS consultant know if you and your employee have agreed on an exchange rate or a set compensation in local currency.
Employer-owed benefits vary by country and are mandated by local law where the individual is working. If your department would like to offer an employee additional benefits beyond what is required by law, please inquire with your GSS consultant. Offerings vary by location and are usually managed by the payroll provider.
For certain situations where it is deemed necessary and appropriate, the School or department can create an unpaid Harvard appointment in PeopleSoft so that individuals hired by an international entity can access Harvard systems. Follow your School's or unit’s unpaid appointment processes for setting up these types of appointments.
In limited cases, payroll providers may be able to sponsor work authorization; however, this service incurs additional administrative costs to the Harvard department and requires significantly more lead time before an employee can be onboarded, begin their work, and get paid.
Applying for work authorization with the local government can be a lengthy process, and individuals must have legal authorization to work in the country where they are located. If your prospective employee will need assistance with work authorization, please let your GSS consultant know about this when inquiring about suitable employment options.
Payment of salaries from sponsored funds to individuals who are living or residing outside of the US is subject to a number of legal, regulatory, and funder-specific requirements. Such payments must be reviewed on a case-by-case basis to ensure compliance with the requirements. See the Office of Sponsored Programs guidance during COVID-19.
In general, the University cannot directly employ individuals abroad. Every country has its own employment laws, statutory benefits/social insurance regulations, tax laws, immigration laws, and currency. The University’s U.S. payrolls are not set up to comply with local employment and tax laws in countries all over the world. However, Harvard has developed the three international hiring approaches (PEOs, Harvard-affiliated offices, and partner organizations) that allow overseas work compliant with University policy and U.S. and local restrictions.