Late one afternoon, the company president notifies you that he or she has decided to (1) “loan” an engineer to a very important customer in Europe or Asia, or (2) send a group of employees to a sister company in the United States for an extended period of time. What factors should you consider and what documents should be drafted to administer these temporary, but long-term employee assignments?
The temporary assignment of employees to another entity is often memorialized through the use of a Secondment Agreement (“Agreement”). Depending on the circumstances, these Agreements can be executed between the two companies involved in the transaction or by the company and the employee. Whether it is a domestic or international secondment, these Agreements reduce risk by detailing the rights and responsibilities of the parties to the Agreement. Additionally, these Agreements provide assurances to employees regarding seniority, pay, employee benefits protection, family travel, and other terms and conditions of employment.
Frank Del Barto recommends that, before temporarily assigning employees to the control of another organization, employers should consider using secondment agreements that address: (1) the length of the secondment period, (2) the employee’s title and level of authority, (3) the employee’s working hours, place of work, travel requirements and expense reimbursement, (4) which company will pay the employee, (5) how health insurance will be handled, (6) which company’s rules the employee is required to follow, (7) how confidential information be should handled, (8) which company is liable for the employee’s actions, and (9) which state or country’s laws should govern the Agreement. Additionally, employers should also consider several family-friendly benefits, such as: travel document (passport/visa) assistance and payment, language training, housing assistance, company- paid return trips, and emergency repatriation due to family illness or emergencies. Frank further comments that, depending on the situation, it is possible for the two companies to be considered joint employers of the seconded individual. For further assistance, please contact Frank. Companies should also contact their tax advisors.