As of 2020, foreign workers accounted for 17 percent of the workforce according to data from ACS and BLS. This equated to approximately 27 million workers in the U.S. workforce. As the news headlines continue to display a growing hole in the labor force due to migrant worker shortages, many businesses have been contemplating the benefits of adding a foreign worker to their workforce mix- and more importantly, how to get it right. While it does take some preparation, hiring international workers can be a great boost when starting your small business, its branding and its profit margins in the long run.
Why Hire Foreign Workers For Your Business
One of the greatest benefits of hiring foreign workers is the diversity they can add to your team. Workers from around the globe come with different language skills, training skills and a cultural fit. As a business, this can take your appeal to a truly global scale. In some cases, your business’ productivity can improve by hiring foreign staff. This is because different workers can come with different training and experience backgrounds. This in turn can be used to improve the efficiency of your business processes.
Also, hiring workers from more developed countries can help your business become more technologically advanced. Workers from Singapore, Sweden or Finland are known to be more technologically advanced- particularly in the fintech, engineering and payments sector. Finally, adding foreign workers to your team could reduce your labor costs. Not only do they command a lower rate in some cases but the efficiency they can introduce can save your business thousands in overheads and hourly labor charges. However, it is also important to make sure your business is adequately set up for hiring foreign workers.
Research Your Visa Options Before Hiring A Foreign Worker
In India, a business can hire an expat worker under 2 scenarios: as an employee and as a consultant. However, before you can complete the recruitment process the candidate and your company will need to apply for an Employment or E visa. The standard process and submission requirements for both the employee and employer are outlined on the Government of India website. On the other hand, if your business is based in the U.S. and is looking to employ workers from India or elsewhere, there are several categories of employment visas available- each with their own eligibility requirements. For instance, under the H2A visa program you must show as an employer that you have made attempts to recruit U.S. based workers to fill your vacancies.
Clarify Your Tax And Compliance Obligations As An Employer
In most cases, foreign employees will be subject to the standard federal withholding tax of 30 percent with the exemption of nationals whose countries have tax treaties between their country of origin and the U.S. When hiring a foreign employee, you will need to ensure they have a Individual Taxpayer Identification Number (ITIN). U.S. based employers will also need to deduct Social Security and Medicare taxes from their wages unless they meet the requirements for exemptions. These include being a non-resident alien for tax purposes or performing services in accordance with the primary purpose of the visa.
You will also need to illustrate your employee’s work authorization using Form 1-9. If they do not have the right work authorization, your business could help them secure it by sponsoring them for permanent residence.
If done right, foreign workers can help your business thrive. Before making the decision, make sure the benefits will outweigh the costs and time involved in the process.