CONVINUS Global Mobility Alert - Week 27.2024

BEST PRACTICE ASSEMBLY

BEST PRACTICE ASSEMBLY AND PROJECT ASSIGNMENTS ABROAD PART 1 - CHALLENGES IN REMUNERATION AND EXPENSE REIMBURSEMENT FRIEDERIKE RUCH, CONVINUS Assembly and project assignments have a few things in common and differ somewhat from "traditional" assignments. The main difference is that assembly and project assignments generally do not have a subsidiary or own branch or the parent company as their destination, but are usually based at the customer's site. In many cases, there is also no branch office at the location, which means that there is a lack of internal experience and information about local legal regulations as well as competent contact persons. The duration of assembly and project assignments is limited by the existing contract with the customer and can last just a few days, several weeks or even several months, depending on the order. Some of these orders are of a short-term nature and therefore do not allow for a longer planning and clarification period and often start "ad-hoc" without an appropriate lead time. Due to the fact that the specific conditions on site are often unknown, this often poses a number of challenges. In this part 1 of this series, we will look at the various legal aspects as well as the remuneration and donation issues, which we will also address in the coming parts. In Switzerland, the Posted Workers Act stipulates that an employee on a foreign assignment should be reimbursed for their travel, accommodation and catering costs. This applies not only to assignments from abroad to Switzerland, but also to assignments from Switzerland to abroad. Switzerland has established similar regulations in many other countries. Remuneration If the assembly or project assignment is limited to just a few days or weeks, the employee is usually paid their remuneration as before. Depending on the destination, an additional daily allowance is usually paid for the period of the foreign assignment, which is intended to cover the higher catering expenses and possible additional costs at the place of assignment. 8 convinus.com

BEST PRACTICE There are a number of service providers who calculate such daily flat rates. These always differ slightly in the way they are calculated, so it is advisable to use the same provider for all installation and project assignments. In some countries, there are also certain daily rates for stays abroad that are favoured from a tax perspective. These must also be taken into account when determining the daily rates. Below is a selection of daily flat rates: Country of destination / Average Daily allowance in CHF Lodgeing Food / Other Algeria 175 101 Angola 302 179 Belgium 87 68 Canada 150 108 China 176 99 Greece 137 73 Italy 175 103 Japan 117 79 Luxembourg 307 116 Morocco 174 83 Oman 178 115 USA 87 68 Source: ERI Inc., USA However, if the assignment lasts longer, the question arises as to the duration of the assignment from which a net-net approach or another remuneration approach should be applied. A final aspect to consider is that the employee's base salary must not fall below the minimum salary requirements in the country of assignment. This is always a major issue, particularly in the case of assignments from abroad to Switzerland, as this cost factor is sometimes not taken into account in contract offers to customers. 9 convinus.com