Sponsored employment in Africa

Happy Friday to all and sundry- I hope you have had a good week? I have been as productive as a beehive- collating information to add more countries to our ever- expanding portfolio so that we can provide sponsored employment in all sectors across the African continent.

The word ‘sponsored employment’ is always thrown around, but what is the exact definition of this?  A sponsoring company is also known as an Employer of Record, a Professional Employer Organisation (PEO), Management company, Umbrella Company or administration services organisations. This is also known as co-employment or employment leasing.   In a nutshell, all of the above, is a company that provides a service under which an employer can outsource employee management tasks, such as

  1. HR management – timesheets, monitoring of work standards, drafting of contracts and full work visa and any other immigration support
  2. Insurance plans
  3. Payroll Administration
  4. Government compliance such as tax, social security or any other contributions

If I was to categorise Uniglo Financial, I would classify as a PEO as well as an Umbrella company.  Along with our partners, we act as an employer of record for independent contractors (The contractors become temporary employees of the umbrella company). In this scenario, the independent contractor will be liable to pay his own taxes. Uniglo also provides a service whereby the contractor will have a tax number in the designated country and the partner will register them and pay their monthly taxes and any other contributions.

While the USA leads the field in PEO’s, it is becoming a global phenomenon, particularly in Africa. Individuals saw a gap in the market for such services and it is now a thriving industry in every African country.

In our experience, many businesses are not aware of the benefits of working with an employer of record. These are some of the advantages of working with an employer of record.

  • Instead of simply outsourcing the HR-related services, a PEO operates with a co-employment arrangement. Under this format, businesses maintain control over their employees, but the PEO shares in the risk and liability issues.
  • The PEO’s job is to pay employees and handle all of the administration of payroll and benefits.
  • The cost of a PEO varies greatly depending on the services you want provided, the number of employees you have and the type of business you operate. The cost structure also varies by PEO provider. Some PEO services charge on a per-employee basis. Under this structure, employers pay a set amount for each employee. Other providers base pricing on a percentage of gross payroll.
  • You retain essential management control over the work performed by the employees. The PEO, meanwhile, assumes responsibility for work such as reporting wages and employment taxes. Your main responsibility is paying the salaries to the leasing company to cover the payroll, taxes, benefits and administrative fees. The PEO does the rest.

A real Life scenario would be as follows:

You secured a contract abroad for 3 months or 5 years but you don’t have an entity in country? It would be impractical to open a company abroad at the drop of a hat as there are time constraints. It can take months to set up a company as there is so much red tape to get through. In addition to this, you would need premises to operate the company from as well as hire staff such as a secretary or administrator and a book keeper or accountant. You would also be liable to pay corporate tax in that country, so in essence, this would not be financially viable. Whether you require services for 2 contractors or hundreds of contractors, using the services of a PEO makes financial sense. We will also provide a dedicated account manager per project and offer full work permit/visa support.

Please feel free to pop us an email if you have any queries U2US@uniglo-financial.com

Have an awesome weekend.