1. Associate General Counsel
Overseas Employment
Jeff Goetz
Associate General Counsel

2. A Common Scenario
An IU department has received a grant to do work in Kenya. The department now wants to hire an individual to work full-time in Kenya for two years to assist in administering the grant. The department wants to either employ a US resident and send that person to Kenya or employ a Kenyan resident. What legal issues does the department need to consider?
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3. Baseline Question: Kenyan Employee?
Hiring a Kenyan resident – If the department hires a local, there is no question the department would need to comply with local employment requirements.
Hiring a US resident – If the department hires a US resident and sends that person to work in Kenya full-time, there is also no question the department would need to comply with local employment requirements. On the other hand, if the department only sends the US resident to Kenya for a couple months at a time, the department has an argument the person is only on business trips; this argument breaks down, though, if the employee spends the majority of his/her time in Kenya (i.e., more than 6 months in any 12-month period).
Foreign laws vary significantly when it comes to defining the thresholds that create a local employment relationship
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4. Kenyan Employment Requirements
If the department has a Kenyan employee, the department would need to comply with a host of Kenyan laws, including, but not limited to:
Business registration laws
Tax laws
Social welfare benefit laws
Labor laws
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5. Options to Structure Overseas Work
Given the significant resources required to comply with local employment requirements, the department might consider alternatives to direct employment in Kenya. Some options include:
“Leased employment” - arrange for a collaborating organization in Kenya to hire the individual and then pay that organization a services fee
Independent contractor - engage the Kenyan resident as a genuine independent contractor
Business trip – hire the US resident to work from the US but arrange for that person to take business trips to Kenya (typically not to exceed 6 months in the aggregate in a 12-month period)
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6. Recording Primary Work Location
If your department has any existing employees with a primary physical work location outside the US (such as in Kenya), please submit the relevant eDoc to indicate the work location is outside the US.
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7. Secondment
What about faculty or staff who want to maintain their status at IU or continue to receive IU benefits?
A secondment agreement may be appropriate – IU would “loan” the employee to a foreign affiliate. This may be particularly relevant in Kenya.
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8. Thoughts on Compliance
IU does not flout US tax, social security, and employment laws. We should have the same standards when operating overseas.
Not only should IU be acting as a good global citizen and protecting its reputation, but in many countries (including the US) violating these types of laws could create significant liabilities for IU (such as back-payments and civil fines). Also, in many countries, willful disregard of some of these laws is criminal.
Please give me a call ( ) or send me an if someone in your unit is contemplating hiring an employee overseas.
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