Dual Employment
What is Dual Employment?
An arrangement in which an employee holds employment contracts with both their home and host country entities simultaneously, commonly used for tax, benefits, or legal compliance purposes.
Dual employment structures are used to satisfy local labor law requirements in the host country while maintaining the employee's employment relationship with the home country entity. This is common in jurisdictions where local employment contracts are required for visa sponsorship, social security enrollment, or payroll compliance.
Under a dual employment arrangement, the employee may receive salary from both entities, with the split determined by tax planning and compliance considerations. The home and host entities typically enter into an inter-company agreement to allocate costs and responsibilities.
While dual employment can simplify compliance, it also introduces complexity around benefits coordination, termination provisions, and intellectual property ownership. Organizations should ensure that both contracts are aligned and reviewed by legal counsel in each jurisdiction.
Related Terms
Shadow Payroll
A payroll run in the host country solely for tax and social security compliance purposes, without actually paying the employee through that payroll. The employee continues to receive their salary via home country payroll.
Tax Equalization
A compensation policy designed to ensure that an employee on international assignment pays no more or less tax than they would have in their home country, with the employer absorbing any difference.
Localization
The process of transitioning an expatriate employee from home-country compensation and benefits to local market terms in the host country, ending the typical expatriate package.