“AB5,” or Assembly Bill 5, is a piece of legislation passed in California, United States, that addresses the classification of workers as employees or independent contractors. Enacted in 2019, AB5 codifies the ‘ABC test,’ a three-pronged criteria used to determine if a worker should be considered an employee and therefore entitled to benefits such as minimum wage, overtime and other employment protections. The ABC test evaluates whether a worker is free from the control and direction of the hiring entity, performs work outside the usual course of the hiring entity’s business, and is engaged in an independently established trade, occupation or business. AB5 was primarily designed to address worker misclassification in the gig economy and industries like ride-sharing and delivery services. The law has sparked debates about worker rights, labor practices and the future of freelance work.
“Accrued Payroll” refers to the amount of salary or wages that a company owes to its employees for work performed during a certain period but has not yet paid. This can include regular wages, overtime, bonuses, and other forms of compensation. Accrued payroll is considered a liability for the company until it is paid out to employees. It is important for businesses to accurately track and record their accrued payroll to ensure that they are meeting their financial obligations to their employees and to provide accurate financial reporting.
Acquihiring, a portmanteau of “acquisition” and “hiring,” refers to a business strategy in which a company acquires another company primarily to gain access to its talent pool rather than for its products, services or assets. In an acquihire, the focus is on the skills, expertise and innovation that the employees of the acquired company bring to the acquiring company.
Agent of record
An “Agent of Record” (AOR) is a term used in various industries, including insurance and human resources, to refer to an individual or entity that is authorized to represent and act on behalf of another individual or entity in specific matters. In the context of human resources and employment, an Agent of Record might be responsible for handling tasks such as negotiating and managing contracts, handling insurance matters, or dealing with other employment-related issues. The specific duties and responsibilities of an Agent of Record can vary depending on the context and the agreement between the parties involved.
An “Annualized Salary” is the amount of money that an employee is contractually agreed to earn over the course of a full year. This figure is often used for full-time salaried employees and is based on a fixed number of hours worked per week. The annualized salary does not include overtime, bonuses, or other additional compensation, but it does include regular wages before taxes and other deductions. This figure is useful for comparing salaries across different jobs or industries, and for budgeting and financial planning. It’s also used to calculate the rate of pay for each pay period.
An asset purchase involves the acquisition of specific assets and liabilities of a target company, rather than acquiring the company as a whole. This approach allows the acquiring company to select only the desired assets and avoid assuming unwanted liabilities.
Back pay refers to the wages or salary owed to an employee for work they have already completed but were not compensated for appropriately or timely. It can result from payroll errors, miscalculations, or disputes over working hours. Back pay may also be awarded when an employee wins a legal claim against their employer for wage violations or discrimination. To rectify back pay issues, employers must identify the owed amount and promptly compensate the affected employee(s). Ensuring accurate payroll practices and compliance with labor laws can help prevent back pay situations.
Comparing an organization’s practices, performance or policies with those of other companies to identify best practices and areas for improvement.
A “boomerang employee” is a term used in human resources to describe an individual who has left an organization and then returned to work for that same organization at a later time. This could be in the same role, a new role, or at a higher position. The term highlights the value of maintaining positive relationships with former employees, as their return can bring valuable skills, experience, and knowledge back into the company.
Carve out employees
“Carve Out Employees” is a term used in human resources and business to refer to a group of employees who are separated or ‘carved out’ from the larger workforce for a specific purpose. This could be due to a variety of reasons such as a merger or acquisition, a strategic business decision, or for benefits administration. For example, in a merger or acquisition, a company might carve out a group of employees to transition to the new entity. Alternatively, a company might carve out a group of employees for a specific benefits plan or program. The specifics of what it means to be a ‘carve out’ employee can vary depending on the context and the policies of the company.
“Centralized Payroll” refers to a system where a company manages the payroll for all of its employees from a single, central location, regardless of where the employees are located or which department they work in. This approach can lead to increased efficiency and consistency, as it eliminates the need for multiple payroll systems or procedures. It also allows for easier oversight and management of payroll-related tasks, such as compliance with tax laws and regulations, payroll processing, and record keeping. Centralized payroll is particularly beneficial for larger organizations or those with employees in multiple locations.
Cloud-based HR software
“Cloud-Based HR Software” refers to human resources management systems that are hosted on the internet, rather than on-premise within a company’s own servers. These software solutions allow HR tasks such as recruitment, payroll, benefits administration, time tracking, employee self-service, and reporting to be managed and accessed online from anywhere, at any time. The advantages of cloud-based HR software include scalability, cost-effectiveness, easy updates, and integration capabilities with other systems. It also supports remote work environments by providing access to HR resources and tools from any location with internet access.
Co-employment is a business arrangement where two or more entities share employer responsibilities for the same group of employees. One entity, often a staffing agency or professional employer organization, handles administrative tasks, while the other entity, the client company, controls the day-to-day work and job duties. This model can offer advantages such as HR expertise and cost savings, but it also requires clear communication and legal compliance to protect the rights of the employees involved.
“Compensation Management” is a key aspect of Human Resources that involves designing, implementing, and maintaining a company’s pay system. The goal of compensation management is to ensure that the organization’s pay scale is competitive, fair, and motivating for its employees. This includes determining salaries, wage levels, benefits, bonuses, stock options, and other forms of compensation. Effective compensation management helps attract and retain talent, motivates employees to perform at their best, and ensures compliance with legal requirements related to pay and benefits. It often involves the use of specialized software to analyze and manage compensation data.
“Compensation Planning” is a strategic process in Human Resources that involves determining how employees will be compensated for their work. This includes not only base salaries, but also bonuses, benefits, stock options, and other forms of remuneration. The goal of compensation planning is to create a pay structure that is equitable, competitive in the market, motivates employees, and aligns with the company’s strategic goals. This process often involves analyzing market trends, evaluating job roles and responsibilities, assessing the company’s financial status, and considering legal and regulatory requirements. Effective compensation planning can help attract, motivate, and retain high-quality employees.
A “Compensation Policy” is a formal statement or document that outlines an organization’s approach to compensating its employees. This policy provides guidelines on how salaries, wages, bonuses, benefits, and other forms of compensation are determined and distributed within the company. It typically covers aspects such as pay scales, job grading, merit increases, promotion and demotion policies, overtime pay, and benefits administration. The compensation policy aims to ensure fairness, consistency, and transparency in the way employees are compensated, and it helps the organization comply with legal and regulatory requirements related to employee pay. It also serves as a tool for attracting, motivating, and retaining employees by offering competitive and equitable compensation.
Compensatory time off
“Compensatory Time Off”, often referred to as “comp time”, is a practice where employees are given time off from work instead of overtime pay. This typically occurs when an employee works extra hours beyond their regular schedule, and instead of receiving monetary compensation for the overtime, they receive an equivalent amount of time off from work at a later date. The specifics of how compensatory time off is implemented can vary depending on company policy and local labor laws. In some jurisdictions, this practice may be restricted or regulated, especially for non-exempt employees.
A “Contractor”, in the context of employment, refers to an individual or entity that provides services to another entity under terms specified in a contract, rather than as an employee. Contractors, also known as freelancers or independent contractors, are typically not considered employees of the company and therefore may not receive the same benefits as regular employees, such as health insurance or paid time off. They are often hired to work on specific projects or tasks for a defined period and are usually responsible for their own taxes and business expenses. The specific rights and responsibilities of a contractor can vary depending on the terms of the contract and local laws and regulations.
In a worker cooperative, employees collectively own and operate the business. Profits and decision-making are shared among the employee-owners.
“DEIB” stands for Diversity, Equity, Inclusion, and Belonging. These are key principles in the field of human resources and organizational development that aim to create a workplace environment where all individuals feel valued and are treated fairly
A “Digital Nomad” is a term used to describe individuals who use technology to perform their work duties remotely and live a nomadic lifestyle. These individuals are not tied to a specific geographic location and often travel while working, taking advantage of digital tools and internet connectivity to complete their tasks. This lifestyle is made possible by jobs that can be performed anywhere with a reliable internet connection, such as writing, programming, graphic design, consulting, and more. Digital nomads may work as freelancers, run their own businesses, or be employed by companies with flexible remote work policies.
“Distributed Work” is a work model where employees or team members are geographically dispersed and work remotely rather than in a centralized office location. This could mean working from home, a co-working space, or any other location with a reliable internet connection. Distributed work is facilitated by digital tools and technologies that enable communication, collaboration, and the performance of work tasks from anywhere. This model offers flexibility to employees and allows companies to tap into a global talent pool. However, it also presents challenges such as maintaining clear communication, building team cohesion, and managing across different time zones.
Diversity, Equity, and Inclusion (DEI)
Initiatives and policies aimed at creating a workplace culture that values diversity, ensures equal opportunities and fosters a sense of belonging for all employee.
Employee Assistance Program (EAP)
A program that offers confidential support and resources to help employees manage personal and work-related challenges.
The extent to which employees are emotionally committed to their work, aligned with the organization’s goals, and motivated to contribute positively.
Employee Experience (EX)
The holistic perception employees have of their interactions with the company, including aspects like culture, work environment, benefits and career development.
Employer of record (EOR)
An “Employer of Record” (EOR) is a third-party organization that takes on the legal responsibilities of being an employer on behalf of another company. This includes handling tasks such as payroll processing, tax withholding, compliance with labor laws, and administration of benefits. Companies often use an EOR when they want to hire employees in a location where they do not have a legal entity, or when they want to streamline their HR processes. The EOR hires the employees, but the employees perform work for and are managed by the client company. This arrangement allows the client company to focus on their core business while the EOR handles the complexities of employment administration.
Employee Stock Ownership Plans (ESOPs)
Flexible Work Arrangements
Alternative work schedules or locations that allow employees to balance work and personal responsibilities.
“Global Employment” refers to the practice of hiring and managing employees who are located in different countries around the world. This can involve a range of activities, including international recruitment, managing remote teams, navigating different labor laws and regulations, handling international payroll and benefits, and more. Global employment can offer companies access to a broader talent pool and the ability to operate across different markets. However, it also comes with challenges, such as managing cultural differences, coordinating across time zones, and complying with the employment laws of multiple jurisdictions. Companies often use services like Employer of Record (EOR) providers to help manage the complexities of global employment.
“Global Payroll” refers to the management and processing of payroll for employees in multiple countries. This involves not only calculating wages and salaries, but also adhering to the tax laws and employment regulations of each country, handling currency conversions, managing benefits, and more. Global payroll can be complex due to the variations in laws and regulations between different countries, as well as the logistical challenges of managing payroll across different time zones and currencies. Many companies use specialized software or services to manage their global payroll, ensuring compliance and accuracy across all their international operations.
The “H-1B Visa” is a non-immigrant visa in the United States that allows employers to temporarily employ foreign workers in specialty occupations. These occupations typically require the theoretical and practical application of a body of highly specialized knowledge, such as in fields like IT, engineering, mathematics, medicine, etc., and a bachelor’s degree or higher in the specific specialty, or its equivalent, is usually required. The H-1B visa is subject to a cap each fiscal year, and applications often exceed the number of available visas, leading to a lottery system. The visa is initially valid for three years and can be extended to a maximum of six years. Some H-1B holders may be eligible for further extensions or for permanent residency under certain conditions.
HR Compliance Automation
The use of automation tools to ensure adherence to various legal and regulatory requirements in different countries, minimizing the risk of non-compliance.
HR Tech Stack
The collection of technology tools and software used by HR departments to manage various functions such as recruitment, performance management and employee engagement.
Human resources information system (HRIS)
A “Human Resources Information System” (HRIS) is a software or online platform that assists in managing an organization’s human resources processes and data. An HRIS typically provides functionality to manage a variety of tasks and processes, including employee data management, payroll, recruitment, benefits administration, time and attendance, performance management, and reporting. By centralizing and automating these processes, an HRIS can help improve efficiency, reduce errors, support compliance with labor laws and regulations, and provide valuable insights for decision-making. The specific features and capabilities of an HRIS can vary depending on the specific software or platform used.
IR35, short for “Intermediaries Legislation,” is a set of tax regulations in the United Kingdom that aims to determine whether a worker should be classified as an employee or as a self-employed contractor for tax purposes. Introduced in 2000, IR35 addresses the issue of “disguised employment,” where individuals provide services through an intermediary, such as a limited company, but their working relationship resembles that of an employee. If a worker is found to fall within the scope of IR35, they are considered to be inside IR35, and their earnings are subject to income tax and National Insurance contributions as if they were an employee. If a worker is outside IR35, they are treated as a genuine self-employed contractor and are subject to different tax rules.”
IRS form 1096
IRS Form 1096, titled “Annual Summary and Transmittal of U.S. Information Returns,” is a document used by businesses in the United States to summarize information that is being sent to the Internal Revenue Service (IRS) on certain types of forms, known as information return forms. These can include forms such as 1099, 1098, 3921, 3922, among others. Form 1096 serves as a cover sheet for these information returns when they are sent to the IRS. It provides a summary of the totals from the accompanying forms and identifies the business submitting the information. As of the tax year 2020, Form 1096 is not used when filing electronically.
IRS form W-2
IRS Form W-2, titled “Wage and Tax Statement,” is a document that employers in the United States are required to send to their employees and the Internal Revenue Service (IRS) at the end of each year. The form reports an employee’s annual wages and the amount of taxes withheld from their paycheck. It includes information on federal, state, and other taxes withheld, as well as Social Security and Medicare contributions. Employees use the information on the W-2 form to complete their individual tax returns. The form is crucial for tax preparation and is typically required to be issued to employees by January 31 of the year following the tax year.
IRS form W-4
IRS Form W-4, titled “Employee’s Withholding Certificate,” is a document that employees in the United States fill out to tell their employers how much federal income tax to withhold from their paychecks. The form includes information on the employee’s filing status, multiple jobs adjustment, number of dependents, and other adjustments to income or deductions. The information provided on the W-4 allows the employer to withhold the correct amount of federal income tax from the employee’s pay. Employees may fill out a new W-4 whenever their personal or financial situation changes to ensure the appropriate amount of tax is being withheld.
IRS from W-9
IRS Form W-9, titled “Request for Taxpayer Identification Number and Certification,” is a document used in the United States by third parties to obtain an individual’s or company’s specific taxpayer identification number (TIN), such as a Social Security Number (SSN) or Employer Identification Number (EIN). This form is typically used in situations where income is being paid to another person or entity, such as independent contractors, and the payer needs to report this to the IRS. The individual or entity providing the form certifies that the TIN they are giving is correct and that they are not subject to backup withholding. The W-9 form itself is not sent to the IRS but is kept by the individual or entity who requested it for their records and to prepare other forms like Form 1099.
Learning and Development
The process of enhancing employee skills and knowledge through training, workshops, courses and other developmental programs.
“Maternity Leave” is a period of time that a mother takes off from work for the birth or adoption of a child. This leave is often paid, but it can also be unpaid, depending on the policies of the employer and the laws of the country or state. Maternity leave policies vary widely around the world and can range from a few weeks to several months. In addition to providing time for recovery from childbirth, maternity leave allows time for the mother to bond with the new child. Some countries and companies also offer paternity leave for fathers, and parental leave, which can be used by either parent.
Misclassification refers to the erroneous categorization of workers’ employment status, typically as either independent contractors or employees, often resulting in legal and regulatory challenges. Misclassification occurs when an individual is labeled or treated as an independent contractor while performing duties that align more closely with those of an employee. This mischaracterization can lead to disputes regarding wage entitlements, benefits, tax obligations, and employment rights. Governments and regulatory bodies worldwide have specific criteria and tests to determine proper classification, aiming to ensure fair treatment and adherence to labor laws.
A “Non-Compete Agreement” is a legal contract between an employer and an employee in which the employee agrees not to enter into competition with the employer during or after employment. These agreements are designed to protect the employer’s proprietary information or trade secrets and to prevent employees from using the knowledge gained during employment to start a competing business or work for a competitor. Non-compete agreements typically specify a certain period of time and geographical area where the employee is prohibited from competing. The enforceability of non-compete agreements varies by jurisdiction, with some places having strict rules about their scope and duration.
A “Notice Period” is a length of time that an employee must give their employer before leaving their job, or vice versa, when an employer is terminating an employee’s employment. The purpose of a notice period is to give both parties time to prepare for the transition. For the employer, it provides time to find a replacement or redistribute the departing employee’s duties. For the employee, it allows time to find a new job or adjust to the change in employment status. The length of the notice period can vary depending on the terms of the employment contract, the employee’s position, and local labor laws. It is often two weeks, but can be longer, especially for more senior roles.
“Offboarding” is the process that an organization uses to manage the transition when an employee leaves the company. This can include a variety of tasks and procedures, such as conducting an exit interview, collecting company property, revoking access to company systems, finalizing payroll and benefits, and transferring the departing employee’s responsibilities to other staff members. The goal of offboarding is to ensure a smooth transition for both the departing employee and the organization, to maintain security and compliance, and to learn from the employee’s experiences to improve the organization. A well-managed offboarding process can also help to maintain a positive relationship with the departing employee, which can be beneficial for the company’s reputation and future recruitment efforts.
“Offshoring” is a business practice where a company moves certain jobs or operations from its home country to another country, often to take advantage of lower labor costs, favorable economic conditions, or specific expertise. This can involve setting up a subsidiary, branch, or partnership in the foreign country, or outsourcing work to a third-party provider located overseas. Offshoring can lead to cost savings and increased efficiency, but it can also present challenges such as managing cultural differences, coordinating across time zones, and ensuring quality and compliance with different regulations. Offshoring is commonly used in industries such as manufacturing, customer service, and information technology.
The shared values, beliefs, behaviors and practices that shape the atmosphere and working environment of a company.
“Orphan Employees” is a term used in business to refer to employees who, for various reasons, do not have a direct manager or supervisor. This could occur due to organizational changes, layoffs, or restructuring where a manager leaves the company and their direct reports are not immediately reassigned to a new manager. These employees are referred to as “orphans” because they lack the guidance, support, and direction typically provided by a manager. This situation can present challenges for both the employees and the organization, and it is generally considered best practice to minimize the duration of such periods and to provide clear communication and support to orphan employees.
Paid Time Off (PTO)
“Paid Time Off” (PTO) is a policy that allows employees to take time away from work and still receive their regular pay. PTO can be used for various reasons, including vacation, personal time, illness, or to care for a sick family member. The amount of PTO an employee is entitled to often accumulates over time and may increase with the length of employment. Some companies have a “use it or lose it” policy where unused PTO does not roll over to the next year, while others allow employees to carry over unused PTO or even cash it out. The specifics of a PTO policy can vary widely depending on the company and local labor laws.
“Paternity Leave” is a period of time that a father takes off from work for the birth or adoption of a child. Similar to maternity leave, paternity leave allows the father to spend time with the new child, support the mother, and bond with the baby. Paternity leave can be paid or unpaid, depending on the policies of the employer and the laws of the country or state. The length and terms of paternity leave vary widely around the world and between companies. Some places also offer parental leave, which can be used by either parent.
Pay-as-you-go (PAYG) contractor
A “Pay-as-you-go (PAYG) Contractor” refers to a contractual arrangement where the contractor is paid for the amount of work done or time spent on a project, rather than a fixed price for the entire project. This payment model is often used when the scope of the work is not clearly defined at the outset, or when the work is expected to be ongoing. The contractor submits invoices for the hours worked or tasks completed, and the client pays these invoices as they are received. This model provides flexibility for both the contractor and the client, but it requires careful tracking and management of work hours or tasks.
The process of setting goals, evaluating progress, providing feedback, and assessing overall employee performance within an organization.
Personal Services Business (PSB) Rules
In Canada, the PSB rules apply to individuals who provide services to clients through a corporation. If a worker is determined to be a PSB, their income is subject to different tax treatment, intended to ensure fair taxation for incorporated contractors.
Phantom Stock Plans
Phantom stock plans provide employees with hypothetical or “phantom” shares that track the company’s stock price. When the plan vests, employees receive a cash payout equivalent to the value of the phantom shares.
“Remote Work” refers to a work arrangement in which employees perform their job duties outside of a traditional office environment. This could mean working from home, a co-working space, a coffee shop, or anywhere else with a reliable internet connection. Remote work is facilitated by technology and digital tools that allow for communication and collaboration over distance. It offers flexibility to employees in terms of their work location and often their work hours as well. While remote work can offer benefits such as reduced commuting time and increased work-life balance, it also presents challenges such as maintaining clear communication, building team cohesion, and separating work from personal life.
Germany has regulations to combat “sham self-employment” (Scheinselbständigkeit). If a worker is found to be in a relationship that resembles an employment relationship but is labeled as self-employed, they may be reclassified as an employee for tax and social security purposes.
A “Statutory Employee” is a term used in U.S. tax law to refer to a worker who is treated as an employee for tax withholding purposes, even though they are considered an independent contractor in other contexts. This means that the employer withholds Social Security and Medicare taxes from their pay, but not federal income tax. Statutory employees can deduct work-related expenses on their tax returns, similar to independent contractors. They are typically workers who perform services for a business under a contract that specifies the results to be achieved, but the business has the right to control or direct only the result of the work and not what will be done or how it will be done. The IRS has specific categories of workers who can be classified as statutory employees, including certain types of drivers, life insurance salespeople, home workers, and full-time traveling or city salespeople. The exact criteria for each category are outlined in IRS guidelines.
Stock options give employees the right to purchase company stock at a predetermined price (the “strike price”) within a specified period. If the company’s stock price increases, employees can purchase shares at a lower cost and potentially benefit from the price difference.
The systematic identification and development of employees to fill key leadership and critical roles within an organization in the future.
The process of attracting, sourcing and recruiting candidates to fill open positions within an organization.
Tax identification number (TIN)
A “Tax Identification Number” (TIN) is a unique identifier assigned by a government to track tax obligations and payments of individuals and businesses. In the United States, for individuals, this is often their Social Security Number (SSN). Businesses, however, are typically assigned an Employer Identification Number (EIN) by the IRS for tax purposes. Other countries have their own systems for tax identification numbers. TINs are used in all tax documents and transactions, making it crucial for individuals and businesses to keep their TIN confidential to prevent identity theft or fraud.
The Big Stay
The Big Stay refers to a contemporary workplace phenomenon characterized by a significant number of employees choosing to remain in their current employment positions rather than seeking new job opportunities. This trend stands in contrast to the earlier period known as the “Great Resignation,” during which a substantial wave of employees voluntarily left their jobs to explore alternative career paths or engage in entrepreneurial endeavors. “The Big Stay” signifies a shift in employee behavior towards increased job retention and loyalty to existing employers, potentially driven by various factors such as job stability, satisfaction with current roles, improved work-life balance, and a desire to avoid the uncertainties associated with changing jobs.”
A comprehensive approach to employee compensation that encompasses not only salary but also benefits, incentives and other non-monetary rewards.
A “Virtual Employee” is an employee who works remotely, often from home, rather than in a traditional office environment. This term is often used interchangeably with “remote employee.” Virtual employees can perform a wide range of tasks and roles, depending on the needs of the business. They communicate and collaborate with their colleagues and supervisors through digital tools and platforms, such as email, video conferencing, and project management software. Virtual employment offers flexibility for both the employee and the employer, but it also requires clear communication, self-discipline, and effective remote work practices to ensure productivity and maintain team cohesion.
The process of integrating new employees into the organization remotely, utilizing technology to provide training, introductions, and necessary resources.
Work from anywhere (WFA)
Work from Anywhere (WFA) is a flexible work arrangement that allows employees to perform their job duties from any location of their choosing, whether it be their home, co-working spaces, coffee shops, or even different cities or countries. Unlike traditional remote work, which might have specific location requirements, WFA provides greater autonomy and freedom for employees to work in environments that suit their preferences and lifestyle. Employers may establish guidelines and provide necessary tools and support to ensure productivity, communication, and data security in this dispersed work model. WFA has become increasingly popular, offering benefits such as improved work-life balance, talent attraction, and potential cost savings for businesses.
Work from home stipend
A work from home stipend is a monetary allowance or reimbursement provided by employers to employees who work remotely. It aims to offset the additional expenses incurred while working from home, such as increased utility bills, office supplies, and internet costs. The stipend can be a fixed amount or based on actual expenses. Work from home stipends not only help support employees’ remote work needs but also promote a better work-life balance and boost overall productivity and morale within the remote workforce.
Zoom fatigue refers to the mental and physical exhaustion experienced by individuals after prolonged video conferencing or virtual communication sessions, particularly on platforms like Zoom. The phenomenon arises due to factors such as constant eye contact, increased cognitive load from processing non-verbal cues, and limited mobility during virtual meetings. Extended periods of online interactions can lead to feelings of burnout, reduced concentration, and heightened stress levels. To mitigate Zoom fatigue, it’s essential to take regular breaks, limit screen time, and use other communication methods when appropriate.
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