Rotator Assignment Program Management Survey: Helpful Definitions |
Rotator: Sometimes known as 'International Commuter' assignments, rotational work is job sharing on a large scale and represents a significant part of the international oil and gas scene. One employee works overseas for 28 days, for example, and when he or she finishes the work cycle, his or her rotating partner, who has been on leave for 28 days, will fly in and take over the job for the next 28 days. The types of jobs on rotation can include drilling, production personnel, project construction managers, maintenance personnel or human resources staff.
Rotator Schedule: A roster for rotational workers. Rotator schedules vary from "one for one," where for every day worked the employee earns a day off, to "two for one," where two days worked earns one day off, to 6/2, where six weeks in-country earns two weeks' leave, and other variations.
International Payroll: A payroll system established specifically to serve employees transferring from one country to another, which may be operated by the company, or provided by a third party service provider.
Global Employment Company: A subsidiary company established in a foreign location by a multi-national company to manage their globally mobile workforce. Operational and fiscal advantages of setting up a global employment company often cited are a streamlined administration, centralized payroll, beneficial employee tax structure and a low tax profit center.
Secondment: The transfer of a person from their regular position to a temporary assignment elsewhere, sometimes overseas. Secondments offer different work situations, which is valuable for staff development.
Exchange rate protection: A company policy that offers employees protection against adverse exchange rate movement as this could seriously affect their take-home pay.
Split payroll: A payroll delivery mechanism whereby the assignee receives his pay both in his home country (in home currency) and in his host country (in host currency). Thus payroll delivery is split into two currencies. Paying the assignee from his home country provides funds in home country currency to pay ongoing obligations such as a home mortgage. The assignee also needs funds in the host country currency.
Outsourcing: Where a process is subcontracted to a third-party company. The decision to outsource is often made in the interest of lowering firm costs, redirecting or conserving energy directed at the competencies of a particular business or to make more efficient use of resources. Outsourcing became part of the business lexicon during the 1980s.
Salary banding: Salary bands refer to information used to distinguish the level of compensation given to certain ranges of jobs. Organizing pay structures in a pay band manner allows for overall control at the management level of an organization, while still giving some discretion for supervisors to reward good performance and keeping within a reasonable compensation budget structure.
Hypothetical Tax: Often referred to as "stay-at-home" liability, hypothetical tax is a component of the tax equalization process. Under a tax equalization policy, the company collects from the assignee the approximate same amount of income and social security tax that the employee would have paid if they had remained in the home country (hypothetical income), typically exclusive of assignment allowances and benefits. This is known as hypothetical tax.
Tax Equalization: A policy implemented by companies with internationally mobile workers to ensure that the assignments are "tax neutral" to employees. The employee should, according to this theory, pay the same amount of income and social security taxes as they would have paid on the items of compensation they would normally earn had they stayed in the home country. The company assumes responsibility for additional taxes relating to any assignment benefits.
Last updated
