Navigating Compliance and Regulatory Challenges in Global Mobility: Insights from TriNet and Oyster

As small and medium-sized businesses think about assembling the optimal workforce, they are increasingly seeking talent worldwide and exploring new markets. But with global employment comes a variety of compliance and regulatory considerations. Here, we explore considerations to be aware of for companies exploring a global talent strategy including emerging trends, compliance complexities, as well as best practices and solutions for companies looking to hire and retain global talent in a way that’s both compliant and scalable.

1. Trends Shaping Global Hiring

As global mobility evolves, several trends are influencing how businesses hire and manage talent.

Technology and Automation
Advances in technology, including AI-driven HR tools, are changing how companies approach recruitment, payroll, and compliance. While these tools streamline operations, they also come with potential risks, such as regulatory scrutiny over data use and discriminatory  practices in hiring algorithms. Businesses need to remain vigilant and adaptable as regulations catch up with technological advancements.

The Rise of Digital Nomads
Countries like Portugal and Barbados are pioneering digital nomad visas, enabling individuals to live and work abroad more flexibly. For businesses, this offers opportunities to access global talent but also introduces challenges in managing cross-border compliance for remote workers. As this trend grows, companies will need to consider how they handle compliance obligations for employees in new jurisdictions.

Workforce Demographics and Talent Shortages
Aging populations in many developed nations have created workforce shortages, driving demand for international hiring. Businesses increasingly look abroad to fill skills gaps, making a nuanced understanding of global employment markets essential for growth. This demographic shift also underscores the importance of creating inclusive, flexible workplaces that can attract and retain top talent.

Shifting Regulatory Landscapes
Regulations surrounding global hiring are becoming more dynamic, with governments enacting laws to protect workers, encourage local hiring, or attract foreign businesses. For example, some countries are introducing stricter data protection laws that impact how companies manage employee records, while others are offering tax incentives to foreign companies that establish local operations. Staying ahead of these trends is critical for businesses seeking long-term success.

2. Common Challenges of a Global Workforce

While the benefits of expanding internationally are compelling, companies must navigate a range of challenges when hiring across borders.

Governing Laws and Cultural Variations
Different regions approach employment relationships in distinct ways. For instance, many countries outside the U.S. require employment contracts that dictate how terminations are handled, including severance requirements and notice periods. Similarly, cultural differences can influence expectations around benefits, workplace norms, and employee engagement. Employers must be prepared to tailor their HR strategies to align with local laws and customs.

Immigration and Tax Considerations
Global mobility often intersects with immigration and tax issues. Employees working in foreign jurisdictions may require visas or work permits, which can involve significant paperwork and delays. Furthermore, tax laws frequently apply depending on the length of time an employee spends in a particular location. For businesses, this means keeping detailed records to support compliance with both corporate tax laws and employment-related tax obligations.

The Complexity of Remote Work
The rise of remote work has introduced new compliance challenges. Employees working in states or countries different from their employer’s base location may trigger tax and employment-related obligations. For instance, an employee relocating temporarily to another state in the U.S. could prompt state payroll tax registration requirements. Similarly, an employee working remotely in France without a local entity may run afoul of employment laws. Planning ahead and seeking expert advice can help businesses navigate such pitfalls, or an organization can consider HR outsourcing for remote teams; expert support for the complexities of remote teams, while the business focuses on core goals.

Cost and Administrative Overhead
Hiring internationally often involves navigating layers of compliance, including setting up contracts, managing tax obligations, and compliance with local employment-related laws. For small to medium-sized businesses, this can pose significant resource constraints. Building an in-house compliance team or relying solely on external counsel may not be feasible, making streamlined HR solutions particularly valuable.

3. Best Practices for Expanding a Global Workforce

For businesses exploring global expansion, thoughtful planning and attention to compliance are essential.

Assess Market-Specific Requirements
Employment-related laws and compliance obligations vary significantly between regions. For instance, setting up a team in Europe might require navigating collective bargaining agreements or works councils, while hiring in the U.S. may involve navigating a patchwork of federal, state, and local laws.

Tailor Policies to Local Norms
A one-size-fits-all approach rarely works in global mobility. From creating region-specific employee handbooks to offering locally competitive benefits, companies must be prepared to adapt their policies to each location.

Invest in Cultural Understanding
Beyond compliance, cultural awareness is key to a successful global workforce strategy. This includes understanding workplace expectations, communication styles, and employee engagement practices in different regions. A culturally sensitive approach can help foster trust and collaboration across diverse teams.

Leverage Expert Resources
Whether through internal teams, HR advisors, or external strategic relationships, businesses can benefit from expertise to help them navigate compliance. These resources provide guidance and operational support, helping companies mitigate costly missteps.

Focus on Long-Term Strategy
Expanding internationally is not just about immediate growth—it’s about building a sustainable global presence. Businesses should take a long-term view, investing in scalable processes and tools that allow for future expansion.

4. Solutions to Help SMBs Go Global

Navigating HR compliance across borders requires sophisticated infrastructure and localized expertise. Professional Employer Organizations (PEOs) and Employer of Record (EOR) services provide solutions for addressing these challenges.

PEOs and their clients enter into a co-employment relationship in which the PEO provides administrative support for services such as payroll, payroll taxes, and access to benefits, while the client company retains control over daily operations and employee management. This approach is available for businesses navigating the complexities of hiring within the United States, where local, state and federal laws vary widely. The PEO model is predominantly used by SMBs to help support their workforce in the United States. 

In contrast, EORs act as the official employer for compliance purposes, enabling companies to hire in multiple countries without establishing entities. This model is especially useful for businesses testing new global markets or hiring remote employees outside of the United States. By taking on certain responsibility for employment, EORs simplify the process of global hiring and reduce the administrative burden on businesses.

Both PEOs and EORs offer businesses a way to simplify the compliance and administrative demands of employment support, allowing them to focus on growth.

Navigating Compliance
Employment laws vary widely by jurisdiction. For example, private industry in the U.S. primarily follows an “employment-at-will” doctrine, while many countries in Europe require formal employment contracts that outline notice periods, severance, and other protections. Navigating these discrepancies requires localized expertise, as even minor compliance missteps can lead to regulatory  and financial penalties. Businesses expanding into regions with complex regulatory environments, such as the European Union or parts of Asia, benefit from outsourcing services to support compliance management.

A PEO like TriNet understands the complexities of the varying laws across all 50 states in the U.S., and can leverage their in-house skill and talent for the benefit of the client to stay compliant and spend their time working productively to build their business.”
— Boyd Rogers, Divisional Vice President and Lead Counsel, Employment Law, at TriNet

Enhancing Agility
Hiring across borders can be a time-intensive process if businesses need to establish entities, particularly in countries with stringent regulations. Leveraging solutions like EORs can reduce the time and resources required to enter new markets, helping businesses onboard talent quickly and compliantly. For example, onboarding a software engineer in Brazil or a customer service representative in the Philippines can often be accomplished in days rather than months.

An EOR or PEO partner manages the complexities of multijurisdictional hiring, which empowers companies to expand quickly and compliantly at the pace your business requires.”
— Miranda Zolot, General Counsel at Oyster

Mitigating Risk
The liability landscape differs significantly across regions. Countries often impose unique requirements related to taxation, benefits, and termination processes. For instance, employers in India must comply with strict laws on workplace sexual harassment, while countries like France require adherence to collective bargaining agreements. By leveraging the HR expertise of a PEO or EOR, businesses can navigate compliance with greater confidence and focus on scaling their operations.

Global expansion presents both opportunities and challenges for businesses. By understanding the compliance and regulatory landscape, tailoring strategies to specific markets, and leveraging the right resources, companies can unlock the potential of a distributed workforce while mitigating risks. Whether navigating compliance in a single country or managing remote teams across multiple jurisdictions, a well-thought-out approach to global mobility is essential for success.

© 2025 TriNet Group, Inc.  & Oyster HR LLC. All rights reserved.  This communication is for informational purposes only, is not legal, tax or accounting advice, and is not an offer to sell, buy or procure insurance.