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Do You Need a US Bank Account to Hire US Workers?

Posted by Stacey Jones

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Jul 17, 2019 5:00:00 AM

Opening a US bank account can be a difficult process. There are many reasons a company chooses to do so, but there are also times when it may not be the right solution.

Many global companies worry that they won’t be able to hire American workers if they don’t have a US bank account to draw from. Is it absolutely necessary to have a US bank account before you hire an American worker?

Identify the Type of Worker

Do you need a US bank account to hire US workers? The answer is, “it depends.” The first step is to take a look at the type of worker you’re entering into an agreement with.

If you’re hiring an independent contractor, you don’t need a US bank account. You and the contractor will negotiate the terms of payment, which will include currency and method of payment. If you pay large sums, it may help you to have a US bank account and maintain a balance in it.

Does the situation change when it comes to hiring employees for your business? While it’s not strictly necessary to have a US bank account, opening one can make it much easier to administer US payroll for employees.

How a US Bank Account Helps

Foreign employers may be required to withhold payroll taxes and remit them to the IRS. To do so, the employer will need to register with and receive an employer identification number from the IRS.

Once you have an EIN, it becomes easier to open a US bank account, although you’re not out of the woods yet.

Not every foreign company will want to register. You might be testing out the US market before committing to opening a branch office there, for example. If you plan to hire American employees, however, you’ll need an EIN.

Without the EIN, you can’t administer payroll taxes for your US employee. You don’t necessarily have to open a US bank account to pay these taxes, but there are some complex rules if you want to pay through a foreign institution.

First, all funds sent to the IRS must be in US dollars. If you send your payments from a foreign bank, they must be affiliated with a US bank. Smaller banks may not be able to provide this requirement.

Having a US bank account simplifies the process. It also helps you avoid fluctuating exchange rates and additional fees, such as wire transfer fees.

No Bank Account? No Problem

Suppose you’re setting up in New York, and you want to hire an employee to help. You’ll need an EIN, but the process of getting one can be difficult for international companies.

You could choose to wait and maybe miss out on hiring the brightest talent for your new office. Or you could partner with a professional employer organization.

The PEO is already established where you want to do business, and they’ll act as a co-employer when you want to hire an employee. They already have an EIN, which may speed the process along.

They can also assist you by providing access to a US bank account, which they already have set up. Better yet, they could help you navigate US payroll taxes and regulations. It’s the easiest solution to what can otherwise be a convoluted and slow process.

Start Hiring Employees Today

The world of business won’t wait, so work with a PEO to cut through the red tape around hiring American workers for your business.

You don’t need to have your own US bank account, although it can simplify your payroll. What you really need is a partner with the expertise and resources to help you get started today.

 

Topics: Pay International Employees, international business, Workers Overseas

5 Canadian Labour Laws Your International Business Should Know

Posted by Stacey Jones

|

Feb 12, 2015 9:00:00 AM

5_Canadian_Labour_Laws_Your_International_Business_Should_KnowThere are variations between Canadian labour laws and the employment laws in other countries. If you own an international business and you’re hiring Canadian employees to work for your company, you must know and understand the Canadian labour laws to ensure you’re always staying compliant. Here are five laws your international business should know.

1. Employees with Disabilities

In Canada, employees with disabilities are given the same rights to employment as those without disabilities. Not only is it against the law to discriminate against people with disabilities, businesses must also take certain measures to accommodate them in the workplace, regardless of the burden this causes the company. But this doesn’t only include persons with physical disabilities; it also encompasses employees with mental illnesses and drug and alcohol addictions, who are often the most stigmatized in the employment world. No employer can fire, deny a job, or refuse a promotion to an employee with any of these disabilities in Canada.

2. Termination

In many countries, workers are employed “at will”, which means they can be terminated from their positions at any time without cause or notice. However, termination laws differ in Canada. Canadian labour laws state that even if you have cause to fire an employee, you must give him notice or pay him if notice isn’t given. The amount paid and the amount of time needed to give notice varies by province, employee classification, wages, and length of employment.

3. Employment Changes

In Canada, you can’t change a worker’s position or the terms of his position as freely as you can in other countries, like the United States. Canadian labour laws state that an employee is owed a raise or consideration if any changes are made to the status or terms of his employment at a company. The employee must consent to the changes for them to be legally accepted. If an employee refuses to accept the changes and is fired, the employer will owe him the salary, overtime, holiday pay, and bonuses that he would have earned during the time of the statutory notice.

4. Immigration

In Canada, there are strict employment restrictions for non-Canadian citizens and permanent residents working in the country. Under ordinary conditions, foreign workers must obtain work permits, which range from a couple months to a few years, in order to be legally employed in Canada. If you plan to hire a foreign worker, you must apply for a job offer confirmation and demonstrate to the government that you can’t find Canadian workers with the necessary skills for the position and that positive effects will occur for the labour market as a result.

5. Health and Safety

Canada takes workplace safety very seriously. Health and safety is the responsibility of both the employer and the employee. The employees have the right to be informed of any hazards, the right to participate in health and safety committees and the right to refuse unsafe work. The employer is responsible for providing information, preventing accidents and injuries, promoting a safe and healthy workplace, providing appropriate training, supervising work, making regular inspections, and investigating and reporting accidents.

Stay Compliant

When an international business employs Canadian workers, the employer must comply with all the Canadian labour laws that protect them. Ignorance isn’t an excuse. As an employer, you are responsible for knowing and following the appropriate laws that affect your business and the employees who work for you. These five employment laws only scratch the surface. There are many others that you must keep track of and stay compliant with.

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Topics: international business

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