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Career Center » Your Contract

YOUR CONTRACT

There are a many aspects to consider when  reviewing and signing an expat employment contract. Many expatriates have been on the circuit long enough to know them however for those who are looking at completing their first assignment or for many of us who require a gentle reminder, here are some of the more pertinent points.

»  Employment Terms
»  Accommodation
»  Healthcare
»  Transport
»  Single/Family Status
»  Leave & Holiday Entitlement
»  Working Offshore
»  Relocation
»  Salaries
»  Local Taxes & Cost of Living
»  Training & Education
»  Escape / Break Contract Clause
»  Signing the Contract


Employment Terms
Ensure that your terms of employment are clear and agreed in writing, with particular emphasis on the following:

- Job Description;
- Place of work;
- Hours of work;
- Bonus entitlement; and
- Overtime.

As an expatriate it is not unusual to be working a 60+ hour week. However, it is often the case that paid overtime offered casually at interview, is often unpaid or non-existent.

Accommodation
You may be offered 'suitable' accommodation, but by whose standards? It may be single or shared accommodation, an apartment or house on a compound. Find out if it is rent-free or subsidized and if utilities, local taxes and / or insurance are included.

If you have to find your own accommodation, you may also have a hefty deposit to find. Worse still, in some countries you have to pay rent at least 12 months in advance. If the accommodation is unfurnished you will also need to consider the cost of moving furniture abroad or perhaps buying furniture and appliances when you are in situ - who will pay for this?

Think also about the possibility of having to break your contract in an emergency situation - the deposit and rent advance may not be refundable. Legally you may not even be able to break the lease and may therefore be responsible for paying rent as per the remainder of the contract. If your contract is written in a language foreign to you ensure you seek suitable advice prior to signing.

Healthcare
Is medical insurance being provided by your prospective employer? Are you also covered outside working hours and on leave? Does it cover family members or can it be extended to include your family if they are with you? Check your salary status in the event of illness or accident - you may be laid off for months or completely lose your position. Does your employer provide sick pay and for what period? What is the situation in the country you are living in – is any healthcare available, or is medical insurance essential?

It is strongly recommended that expatriates arrange their own medical insurance (if not being provided by the employer). Expatriates should also seriously consider 'income protection' cover. Additionally, particularly for those working in remote locations or third world countries medivac and trauma cover should also be considered.

Transport
Some form of transport is often provided. This could mean a chauffeur driven saloon, a private self-driven vehicle or a shared/pooled vehicle. It may also be a travel allowance. Your transport may be limited to the hours you actually work, and not available to you out of working hours. Check the insurance arrangements in detail and ensure you are fully covered to drive the vehicle at all times. If your family is with you, check whether they are covered to drive the car. Finally, check that you have the necessary driving license for the country, or whether you need to get extra documentation.

Single/Family Status
If you are considering family status, find out if the location is suitable for a family. Will your wife/husband be able to work too? Will your family be able to adapt to the local climate and customs, which can sometimes be prohibitive? What education facilities are there for your children? Education fees can be very expensive overseas, so you need to know the costs before you decide whether your contract is going to be financially viable.

If you are offered single status with the assurance that your family can join you later, ensure that you get this written into your contract.

Leave & Holiday Entitlement

How many days leave will you get per year and are they paid? Does your contract state that all flights are included, both outward and return? How many flights are offered? Are all family flights covered and in what class of travel (i.e. economy or business class)? What are the local public holidays? Will you get paid leave for these days? Are there any requirements to take holidays at certain times of year?

Working Offshore
The tempting rotational positions such as the common 28 days on/28 days off oil and gas industry contracts may actually mean that you are only reimbursed for the 28 days actually worked. In some cases the contract may still be very reasonable however this needs to be considered.

Relocation
Who pays for shipping your furniture and belongings, including the trip home and storage costs? If the company pays for relocation (repatriation) at the end of the contract, is this dependent on completion of the contract, or does it include early termination? If so, do the circumstances of termination affect who pays for the relocation? Who insures the items against damage or loss? Who will be responsible for any further relocations during the period of the contract? Will you receive a disturbance allowance if you are once again relocated?

Salaries
If you are asked what salary you expect, always ask the prospective employer to give you an indication of the going rate. They are in the business of employing people so they are in a good position to advise you.

A prospective employer will rarely offer the maximum salary. All employers have a budget range - upper level is usually as much as 50% higher than the lower level. In some companies that range is higher depending on the demand and market conditions.

In what currency are you being paid and how will you be paid? If you are paid in local currency and it is devalued you may be severely out of pocket, which could affect your financial commitments back home. If it is paid in local currency by reference to a different currency (eg dollars / sterling) check the rate of exchange, and whether that is fixed of variable. If it is variable, bear in mind that the variation may work for or against you.

Check any salary comparisons you can find. Some countries pay significantly higher salaries but also have a higher cost of living.

Never enter into agreements whereby the employer states he will not declare taxes. You can enter into a tax-free agreement but if you do, ensure that the agreement clearly states net of tax in the remuneration clause. Therefore, if the employer changes their mind, any tax owed is their responsibility. They will have to adjust your remuneration accordingly or pay the tax for you. It should be noted that in some countries even if your contact states your employer is responsible for paying your taxes legally you are still responsible.

Local Taxes & Cost of Living
Does your country of citizenship require you to pay local taxes or does it have a reciprocal agreement with your country of residence?

Are there any other deductions to be made from your salary? This may include loans for relocation purposes if you are to bear the cost.

Find out the costs of essential everyday goods like petrol, food, parking, entertainment and utilities. Knowing this kind of information will help you weigh up the real value of the salary package

Training and Education
Will language lessons be offered? Will cultural training and mentoring be available? Will you be reimbursed for other relevant courses associated with your relocation or position? Ensure all agreed training and education have been included or relevant policies referenced within your contract.

Escape / Break Contract Clause
If you are on a short-term contract, there may not be a legal option to terminate. One or two year contracts usually require at least 28-days notice, and you may also have to bear the cost of repatriation. What will happen to your money in this event - especially the bonuses? Is there a requirement to be in employment (and not under notice given or received) at the time the bonus is calculated, or are you eligible for it on a month to month basis?

Signing the Contract
Only sign on the dotted line if you are entirely content with the terms and conditions on offer and have ensured that all verbal amendments have been written into the contract. Consider seeking legal advice.