How do I pay a foreign employee?

I have an employee who started with us while in the US on a temporary work visa. That visa has just expired, due to an attorney’s incompetence, and she will be going home to Ireland at the end of the month. She will return on a visa that will let her work legally in the U.S., but that may not be until next October.

In the interim, I want to keep her on working remotely, which is not ideal but would help us both out. How do I pay her? She has a US bank account, is on our payroll, and wants to do whatever she can to keep her job and return to the US on a longer-term visa.

My organization is nonprofit, if that matters. Our staff is tiny, but we do have an outside payroll company handling payroll. Is this something easily handled by our payroll company?

It should be no issue for your payroll company. This has happened to our company. The important thing is to pay her. By law you must meet payroll and you must pay your employees. Any violation can trigger an audit and you don’t want that.

As long as the time period she was working was covered by her visa, you’re in the clear. If you are saying that she overstayed her visa, you still have to pay her, but you need to consult your lawyer, because you were in violation of the law, if she worked anytime passed her stay.

I suspect that you cannot continue to employ her (using “employ” in its legal sense), but you would be able to use her as a consultant. The consultancy agreement should make it clear that:
(1) she is not an employee;
(2) you will not retain any PAYE income taxes for her (she will be responsible for paying tax on her income in her home country);
(3) you will not pay social security tax for her;
(4) she will not receive benefits that employees usually get, such as payments into a retirement fund or health benefits.

I don’t think you should use your payroll company for this. Your accounts department should pay her for the consultancy just as it pays others providing you with goods or services, after she sends you an invoice for her consultancy work.

(I know about this from two experiences working outside the US as a quasi-employee that was not really an employee of a non-profit in the US.)

When she leaves at the end of the month she will have worked about five weeks past her visa expiration; I’ve spoken to our attorney and we’re not really worried about that. (We’re actually being audited for fiscal 2011 at the moment. She was legal the whole time we employed her during that period. Whew!)

One of her options is to marry her boyfriend who is here on an H1B visa. If she does that, she can get an H4 visa to let her return to the country, but that’s not a legal work permit so we wouldn’t be able to employ her. That to me is the worst-case scenario–I’d have to hire a temp until she gets legal again, and all that training will go to waste. ARGH!

I was in pretty much the exact position once (beyond the statute of limitations). The company wire-transferred funds directly from an offshore account in the Cayman Islands into my Irish bank account, which I accessed in the US via an ATM.

I do not think this is true at all. I have been an off-shore employee of an american company and had a CDI (a type of civil code employment contract) not a consultancy contract. As a sole representative, there was no office or legal presence of this firm. I was paid in my account in Paris and my pay was passed through their payroll.

I also know two other persons who work in the same fashion with American firms.

I can not imagine in these many instances of different firms that there is a violation of american labour code.

I note both by my experience and by those others I know, that only (2) and (3) are the case in our contracts. I received when I worked for the american firm the same benefits (as did several other overseas foreign employees in similar conditions).

Because of the expense of adding and subtracting employees from benefits enrollements, unless it is an absolute obligation, and the cases I know suggest it is not, they should not do it.

But it seems the employment risk is in the visa overstaying. No country is very nice about this, although no doubt arrangements can be made.

There is a poster here who knows these things, Eva Luna I think.

The company I do a great deal of contract work for had this issue. Originally they hired employees, but because we come from all over the world they ran into all sorts of payroll and tax issues.

So, they made us all into contractors and use Odesk to handle all the payments.