According to Deloitte, experts forecast global spending on outsourcing to climb to $971 billion by 2023.
As technology improves, distances across countries shrink. It isn’t a surprise why outsourcing to different continents is so popular: It’s much easier than before, allowing companies to increase their workforce while reducing spending, boosting efficiency, and penetrating global markets.
Although companies can enjoy many benefits through outsourcing, it does raise essential employment concerns. One of these is how international holidays and celebrations might affect the bonus pay of outsourced employees.
Holiday celebrations are a big part of many cultures and traditions worldwide, but not all countries celebrate similarly. Some countries celebrate holidays exclusive to their culture, which could complicate remote working arrangements.
Some industries, such as healthcare or customer service, require employees to work on holidays due to their role as frontline workers or critical support staff. These dates can create challenges for remote employees in a company’s global workforce.
How do International Holidays Affect My Bonus Pay? 4 Factors to Consider
Holiday pay and bonuses vary depending on the country, the company, and the specific terms of the contract. When you’re trying to determine whether a holiday will affect your bonus pay, you need to consider multiple factors of your employment.
1. Company and Legal Policies
What do your company’s official policies say about employee compensation during holidays? Companies may have special procedures and benefits for outsourced employees that cater to the country they’re working from.
The amount you receive may also depend on how long you’ve been with the company, your position, and what country you reside in. Work with your human resources department to help you understand how to calculate your holiday pay.
In some cases, you could also receive double compensation for working on a holiday, primarily if you work for a Philippine company. In the Philippines, employees who work during regular holidays receive an additional 30% of their daily rate. Meanwhile, those who work on special holidays get an extra 50% of their daily rate.
In addition to different holiday pay policies across countries, there may also be differences in the number of annual leaves or paid time off (PTO) your employer gives you. Employees from some countries may receive up to 30 days of PTO annually, while much less in others.
However, the United States does not require employers to pay employees for time not worked, and it usually comes down to employer-employee agreements.
Communicate with your employer about your holiday pay policies and other compensation issues to ensure everything is clear.
2. What Holidays Affect You
It could be clearer if your company operates in multiple countries with different calendars.
One example you can look at is the United States because 68% of its companies outsource tasks overseas. They have specific holiday policies that dictate how much an employee should receive holiday pay. Employers implement the policies and typically base them on the employee’s tenure within the company.
The most commonly observed holidays in the United States are Christmas, New Year’s Day, Memorial Day, Independence Day, Labor Day, and Thanksgiving. If you’re working for a US-based company, you can receive holiday pay for these days.
However, there are US-exclusive holidays where you may not be eligible, such as Martin Luther King Jr. Day, Presidents’ Day, and Veterans Day. Receiving pay on these days depends on the terms of your contract, so it’s essential to check it thoroughly and ask for clarification from the employer.
Clarify with your employer regarding pay for holidays that span several days. If you live in China or India but work for a US-based company, you may not receive holiday pay for Chinese New Year or Diwali.
3. Timezones
If you’re working for a company based in a different time zone, there may be confusion when a holiday starts and ends. Take the Fourth of July, a holiday, for instance. Suppose a Filipino works remotely for a US-based company; they have roughly a 12-hour time difference. When is it a holiday for the Filipino employee? July 4 in the United States or the Philippines?
Your employer should clarify what date counts as a holiday and which timezone the company prioritizes.
4. Tax Laws
You may be subject to different tax laws and regulations depending on your location as an outsourced employee. These taxes can also impact your holiday pay, as some countries may have higher taxes or different rules around bonuses and holidays.
Additionally, you’ll need to consider the laws and regulations regarding your rights and benefits.
According to the US Equal Employment Opportunity Commission (EEOC), multinational employers must comply with the laws of the country where the employee works and the laws of the company’s home country. However, remember that the EEOC’s jurisdiction only applies within the US.
Why You Need to Understand Your Company’s Holiday Policies
You may not realize that your company isn’t paying you for your services appropriately. Knowing which working days your employer considers a holiday is essential to staying aligned with your remote company.
Holiday pay policies may differ depending on the country and your company. Therefore, familiarizing yourself with the principles and guidelines of your employer is essential. Feel free to reach out to your HR department to learn how you can compute your holiday compensation.
Studying your local and employer’s labor laws can also help you better understand your compensation, as you may have to clarify which tax laws you must follow. The taxes can also impact your salary since other countries may have higher tax rates or different policies.
Ensuring You Obtain Proper Compensation
Ultimately, it is best to communicate with your employer thoroughly. Ask them for clarifications about your pay and whether a date is a holiday. These conversations will keep you aligned, reducing frustrations and helping you avoid exploitative business practices.
By knowing your rights and studying the procedures of your home country and your employer, you can ensure you receive fair compensation for the time you spend working during holidays.
