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13th salary

A bonus (often at Christmas or year-end) which is either common or statutory in many countries. Usually the equivalent of an additional month's earnings and paid at the end of the year.


14th salary

See Holiday remuneration. 



A


ASO

See Administrative Services Outsourcing (ASO)A service wherein the client company outsources all elements of their employees' payroll, insurance provision and other employment matters, but retains the role of legal employer (as opposed to Professional Employment Outsourcing where the legal employment is shared, or Global Employment Outsourcing where the legal employment is outsourced entirely).


Administrative Services Outsourcing

aka ASO. A service wherein the client company outsources all elements of their employees' payroll, insurance provision and other employment matters, but retains the role of legal employer (as opposed to Professional Employment Outsourcing where the legal employment is shared, or Global Employment Outsourcing where the legal employment is outsourced entirely).


Agency

A term used for any staffing firm that provides temporary or permanent hire solutions.


Agency contractor

Term that refers to any temporary employees provided by a staffing firm/agency.


Agency worker

UK legal term for an individual engaged by a staffing firm/agency to perform labour for one or more of the firm/agency’s clients.


Allowance

An amount paid to a worker in addition to their regular remuneration, usually in recognition of an anticipated expense. Allowances are sometimes treated differently from regular salary and other incomes, so advance research is advisable.


Arbeitnehmerüberlassung

aka AÜG. The German labour leasing licence and the stringent regulations that surround it concerning how to contract with clients and workers.


Assignment

Refers to a task or duty that is performed by a contingent
worker.


AÜG

See Arbeitnehmerüberlassung.



B



Baby boomers

The demographic group born during the post–World War II baby boom, approximately between the years 1946 and 1964.


Bank holiday

UK term for Public Holiday.


Bill and pay

See Invoice and pay.


Blended workforce

The planned use of direct-hire staff and contingent workers to meet the strategic and tactical workforce needs of a
business.


BPO

See Business Processes Outsourcing.


Business Process Outsourcing

A service sector dedicated to the specialist outsourcing of a client's entire business unit. This may be carried out for cost purposes (when overseas, see also Offshoring) or to allow specialist tasks to be managed by a subject matter expert (see also Human Resources Outsourcing).



C



CDD

Contrat à Durée Détérminée (CDD). French term for a fixed-term contract. As is the case in many countries, France has very specific rules covering fixed-term contracts.


CDI

Contrat à Durée Indétérminée (CDI). French term for an open-ended contract.


Co-employment/Co-employer

Often used to describe the relationship among two or more organisations that apply a level of control
over the same worker or group of workers. Co-employers often share a degree of liability for shared employees. Additionally, see Professional Employment Outsourcing.


Collective agreement

A set of regulations enforced for a particular sector, industry, union or other subset of workers. Collective agreements usually grant workers more rights, benefits or remuneration in exchange for added flexibility on working time, dangerous conditions, or other factors that other workers would not be exposed to.


Collective bargaining agreement

See Collective agreement.


Collective convention

See Collective agreement.


Commercial staffing

A term used, principally in the US, to describe non-technical temporary staffing such as office/clerical and similar sectors. In contrast with professional staffing.


Contingent work

Contingent work is usually used to describe any form of work that is not full-time direct employment. This workforce may be internal (fixed-term employees and temps) or external (contractors, agency workers, PEO employees).


Contingent worker

A person who undertakes working arrangements that differ from permanent, direct wage and salaried employment, usually for an agreed or limited period of time.


Contractor

A worker, internal or external, brought in to carry out a specific task or set of tasks. Usually used for specific subject-matter expertise relevant to a project. See also Independent contractor.


Contrat à Durée Détérminée

French term for a fixed-term contract. As is the case in many countries, France has very specific rules covering fixed-term contracts.


Contrat à Durée Indétérminée

French term for an open-ended contract.


Crowdsourcing

A term used to describe the outsourcing of a task to a community rather than an individual. Wikipedia.org is perhaps the best-known example of a crowdsourced knowledge platform.



D



Day-rate Contractor

An Independent Contractor whose remuneration is based purely on an all-inclusive daily/hourly rate. Days/hours not worked are not remunerated. See also Independent Contractor.


Deemed employment

A term used to describe situations where an external worker is deemed by the local authorities to be in a comparable role to an internal employee and therefore due the same rights and advantages as an internal employee despite the lack of a direct employment contract.


Direct employment

A direct employment relationship between a worker and an employer, with no third-party broker or co-employer involved.


Dispensation

A written agreement, usually provided by the local tax authority, allowing an employer to treat a certain amount or category of income as non-taxable without providing further evidence of the incurred expense.


Double Taxation Treaty

See Double Taxation Avoidance Treaty.


Double Taxation Avoidance Treaty

An agreement between two countries on how to tax individuals with tax liabilities in both countries so as to avoid the individual paying tax twice on the same income. In practice, this often dictates an order of priority for each type of income to determine which country may tax the individual first, with the other country then allowed to charge "top-up" rates in cases where their tax rates would prove higher.


Draw

A draw is in many ways similar to a loan to an employee, often used to pay a commission to a new employee in their first month, then earned back over time as the employee builds their commission. Caution must be used when implementing these internationally as many countries won't allow the employer to recuperate any unearned funds previously paid to the employee at the end of the employment relationship.



DTT

Double Taxation Avoidance Treaty (DTT). An agreement between two countries on how to tax individuals with tax liabilities in both countries so as to avoid the individual paying tax twice on the same income. In practice, this often dictates an order of priority for each type of income to determine which country may tax the individual first, with the other country then allowed to charge "top-up" rates in cases where their tax rates would prove higher.



E



Employee

An individual who works directly for an organisation in a job with no specific end date.


Employee Social Security

Social charges imposed by the local authorities on employees. Usually used to fund national and/or local social programmes and calculated as a percentage of the employee's earnings.


Employer costs

Often used interchangeably with Employer Social Security, employer costs is a broader term and is used to refer to all the costs relating to employment (salary, employer social security, additional statutory remuneration, etc.).


Employer of Record

aka EOR. The company or department that is responsible for paying wages, tax, social security, etc.. Also used to describe a service, provided internationally, wherein the client company fully outsources the employment relationship (and associated risks) with all or some of their international employees. This service is often used to quickly explore a new market or territory without incorporating in-country right away. Also known as GEO and as International PEO.


Employer Social Security

Social charges imposed by the local authorities on employers. Usually used to fund national and/or local social programmes and often calculated as a percentage of the employee's earnings.


Employer taxes

See Employer Social Security.


EOR

Employer of Record (EOR).The company or department that is responsible for paying wages, tax, social security, etc.. Also used to describe a service, provided internationally, wherein the client company fully outsources the employment relationship (and associated risks) with all or some of their international employees. This service is often used to quickly explore a new market or territory without incorporating in-country right away. Also known as GEO and as International PEO. 


ERSS

See Employer Social Security.


ESS

See Employee Social Security.


Expenses dispensation

See Dispensation.



F


Fixed-term contract

A contract that has been concluded for a specific duration. In many countries this type of contract comes with specific requirements surrounding termination, notice, renewal, etc.


Freelance/Freelancer/Freelancing

A worker that is not affiliated with any single client, employer or agency, and is responsible for finding their own work and managing their own income. Although now often used interchangeably with Contractor, freelancers are more typically found in very short-term independent engagements such as graphic design, journalism and others.


Freelanceing platform

Online platform where businesses and independent professionals can connect and collaborate, such as Upwork.


FTC

See Fixed-term contract.


FTE

Full-time Employee.


G



GEO

Global Employment Outsourcing (GEO). See Employer of Record (EOR).


Gig work/economy

A term used to describe a small, self-contained piece of work (a "gig") and the ecosystem of companies, websites and workers that have grown up around it. Good examples include upwork.com, etsy.com, etc.


Global Employment Outsourcing

See Employer of Record (EOR).


Global independent workforce

Those around the world who are working on a temporary basis for organisations without becoming an employee.



H


Holiday allowance

See Holiday remuneration.


Holiday pay

See Holiday remuneration.


Holiday remuneration

In many countries it is statutory or customary to pay workers additional remuneration either when they take Paid Time Off or every year in early summer, or both. In different countries such additional remuneration is variously termed Holiday allowance, Holiday pay, Holiday remuneration or Holiday bonus, and is distinct from the usual salary payment associated with Paid Time Off.


HRO

See Human Resources Outsourcing (HRO).


Human Resources Outsourcing

A type of Business Process Outsourcing specifically concerned with the outsourcing of the Human Resources function of an organisation either by engaging a vendor to manage HR operations or by allowing a vendor's staff to be present at the client's site to manage matters locally.



I


IC Compliance

Independent Contractor Compliance (IO Compliance). Independent Contractor Compliance testing has arisen out of the need for tax and social authorities to distinguish reliably between true Independent Contractors and workers who claim the status only to benefit from the attractive rates it may come with. Each country has different tests in place, but most follow the logic of "command and control", which dictates that a true Independent Contractor determines his own means and method whereas an employee will be told what to do and how by a superior.


Independent Contractor

An external worker brought in by a client under contract to provide services, usually billed on a time-related basis. Independent contractors are expected to work under their own supervision and in the manner they consider best, as opposed to a managed employee. Such contractors often benefit from beneficial and/or different tax and social security treatment, which has led to abuse and to authorities' ever-increasing appetites for Indepdendent Contractor Compliance testing. Contrast with Statement of Work consultant.


Independent Contractor Compliance

Independent Contractor Compliance testing has arisen out of the need for tax and social authorities to distinguish reliably between true Independent Contractors and workers who claim the status only to benefit from the attractive rates it may come with. Each country has different tests in place, but most follow the logic of "command and control", which dictates that a true Independent Contractor determines his own means and method whereas an employee will be told what to do and how by a superior.


International PEO

See Employer of Record.


Invoice and Pay

A type of contract where an intermediary is brought in solely to invoice the client and make payment to the worker. While this type of structure is often used to remain "at one step removed" from an independent worker or to pay a worker in a non-compliant manner, it is also legally used particularly where company policy prevents a client from making payments to a correctly-registered remote worker.



L



Labour leasing

A term used in different ways in different countries. In the US more related with "laborers" such as agricultural and construction workers. In Europe Labour Leasing applies to most agencies who provide staffing services to a client.


Labour leasing licence

A licence granted by an in-country authority to carry out Labour leasing services.


One-man Limited Company

In the UK, a one-man Limited company, aka a Personal Service Company or simply a Limited Company, is a single-person company commonly used by contractors as a tax-efficient invoicing vehicle for their contracting revenue.


Limited Company

See One-man Limited Company.



M



Managed Service Provider

A company that manages a client's entire contingent workforce programme. Will often also manage the associated supply chain and provide consolidated reporting, billing, etc.. Most of these will offer a VMS platform to their clients to facilitate the relationship.


Millennials

The demographic cohort that follows the Baby Boomer generation. Although there are no precise dates for when the Millennial generation starts or ends, demographers and researchers typically state birth years from the early 1980s to the early 2000s.


MSP

See Managed Service Provider.



N



Notice period

The amount of time that one party must give another to terminate a contract or agreement. Notice periods in employment contracts are usually heavily regulated or restricted. 



O



Occupational pension

An optional, usually private, pension scheme which is put in place by the employer for the benefit of the employees. Employees may elect to pay additional contributions to the scheme, which the employer may match to a certain level.


Offshoring

The relocation of part of a client's business, often finance or customer service, to a foreign market, usually for cost purposes. Note that offshoring does not necessarily mean the use of a foreign supplier; offshoring may be accomplished by the client opening a new office in a less costly location.


Open-ended contract

A contract that has been concluded for an indefinite amount of time. Such contracts can only be terminated by giving appropriate notice and abiding by local laws and regulations governing termination.



P



Paid holiday

See Paid time off.


Paid time off

Time off that is remunerated, usually at the same rate as time worked. In some countries additional remuneration is statutory or customary: see Holiday remuneration.


Pay As You Earn

The UK payroll system, based on the employer making all deductions at source and paying directly to the relevant authorities without the employee's involvement.


PAYE

See Pay As You Earn.


Payment in lieu of holiday

A payment which takes place if the allocated holiday period has not been taken during the corresponding period, usually the end of a holiday counting period or the end of a contractual relationship. Note that Payment in lieu of holiday is illegal in employment relationships in many jurisdictions, where the employee must take the alloted amount of holiday.


PE

See Permanent Establishment.


PEO

Professional Employment Outsourcing (PEO). A service, provided principally in the US, whereing the client company shares the employment relationship with an external employment company. This co-employment of the employee means that the PEO company takes on all the employment risks and bargaining power while the client company retains command and control of the employee.


Per diem

An amount paid to a worker in addition to their regular remuneration, usually in recognition of a hardship or an anticipated expense. Workers required to travel for work purposes may receive a per diem to cover their food and laundry costs, for example. While rules exist in many countries for the treatment of such income, the simple fact of calling an amount a per diem does not render the amount non-taxable: research into local rules and practices is always advisable (or call us!).


Permanent Establishment

aka PE; a fixed place of business or deemed presence which generally gives rise to income tax or value-added tax liability in a particular jurisdiction.


Permanent placement

The bringing together of a job seeker and a prospective employer for the purpose of effecting a traditional employment
relationship.


Personal Income Tax

The tax paid by an individual relating to his/her earnings and other income. Common usage may also include tax paid on fortune/wealth.


Personal Service Company

See Limited company.


Personnel

People employed by an organisation or engaged in an organised undertaking.


PIT

See Personal Income Tax.


PO

See Purchase order.


Private pension

A pension scheme which usually selected by the employee, who will also make most of the contributions. Such schemes are often completely independent of the source of the income and can be a very useful means of tax-efficiency for individuals for whom cash flow is not an immediate concern.


Probation Period

In the first weeks or months of an employment contract, the employer and the employee may agree to a test or probation period with different terms from the remainder of the contract. Typically these differences include a shorter notice period and may include a slightly different remuneration structure.


Professional Employment Outsourcing

aka PEO. A service, provided principally in the US, whereing the client company shares the employment relationship with an external employment company. This co-employment of the employee means that the PEO company takes on all the employment risks and bargaining power while the client company retains command and control of the employee.


Professional staffing

A term used, principally in the US, to describe technical temporary staffing such as IT, engineering, finance and similar sectors. In contrast with Commercial staffing.


PSC

See Limited company.


PTO

See Paid time off.


Public holiday

A day which, at a local or national level, has been given similar status to a Sunday. Work on such days is therefore restricted and often subject to special conditions in terms of duration and remuneration.


Purchase order

A document issued to a supplier confirming the scope of work, timeframes and costs of a set piece of work.



O



Overtime

Time worked in addition to the agreed contractual hours. In many jurisdictions, and particularly for blue-collar workers, overtime is strictly defined and must be remunerated, often at a higher rate of pay and/or with time off in lieu.



R




Recruiting

The process that involves finding and screening candidates for an employer as part of a search assignment.


Recruitment Process Outsourcing

A type of Business Process Outsourcing which makes use of a third-party company to replace the client company's internal recruitment function, process and supply chain management completely.


Risk management

The act of minimising, monitoring and controlling the probability and/or impact of negative events or losses. Risks from contingent employment can include the legal aspects of co-employment, resource risk, as well as the safety of human and physical resources.

RPO

See Recruitment Process Outsourcing.



S



Service order

See Purchase order.


Sharing economy

A term used broadly (at times interchangeably with the Gig economy) to describe a service based on the sharing of a resource. Examples include Uber, Lyft, AirBnB and others. Typically very technology-driven and with very low barriers to entry, very useful for those seeking short-term stopgap income.


Sick pay

Remuneration due to an employee when absent due to illness or accident. In most countries employees' entitlements are set by law, regulation or Collective convention, though employers may choose to be more generous.


SOW

See Statement of Work.


SOW contractor

See Statement of Work consultant.


State pension


A pension scheme which is usually run or regulated by the state. Often such schemes draw their contributions from the social security contributions, and the amount received after retirement may be disproportionate to the amount contributed.


Statement of Work

aka SOW. A document that determines the activities, deliverables and timeframes for a specific piece of work.


Statement of Work contractor

aka SOW consultant. Used to describe an external worker providing services under a Statement of Work. In contrast with an Independent contractor providing services, the SOW contractor usually works to a specific goal or deliverable.


Statutory pension

A pension fund which is mandatory for a category of workers, usually employees. See also State pension and Private pension, either of these may be statutory in nature.



T



Tax at source

Tax that is withheld by the employer from the employee's payslip, and paid directly to the relevant tax authorities. See also Pay As You Earn.


Temp

Common abbreviation for a Temporary worker.  In Europe, Temp carries the connotation of secretarial or unskilled office work.


Temporary worker/employee

aka Temp. A worker who is brought in to provide services on a limited-time basis.



U



Umbrella company

A company providing an "umbrella of employment" for day-rate contractors, particularly in the UK; taking the daily rate and putting it through PAYE to provide employment-like social advantages and legitimacy.


Union Agreement

See Collective agreement.



V



Vendor Management System

aka VMS. A technology platform used by clients or their MSPs to manage and procure staffing services, and the related contracts, POs, invoices and other documents.


Visa

An accreditation delivered by a country to an individual confirming the individual's right to enter, visit or reside in the country. A Visa does not automatically confer the right to work in the country. See also Work permit.


VMS

See Vendor Management System.



W



Work permit

An accreditation delivered by a country to an individual confirming the individual's right to work in the country under certain conditions. A Work permit does not automatically confer the right to reside or remain in the country, and an appropriate Visa is often required to gain access to and reside the country.


1099 worker

US term used to denote Independent Contractors.


W-2 worker

US term used to denote Employees.

In the first weeks or months of an employment contract, the employer and the employee may agree to a test or probation period with different terms from the remainder of the contract. Typically these differences include a shorter notice period and may include a slightly different remuneration structure.