Some countries do not allow expatriates to opt out of local social security programs. When this is the case the firm usually pays for these additional costs. Laws governing private benefit practices differ from country to country. The also vary from firm to firm. How benefits are calculated and what type of retirement plan applies to individuals may make the difference between a comfortable retirement in a country of their choice or a forced retirement elsewhere. .
Multinational companies provide vacations and special leave to their expatriates. Included as part of an employee's regular vacation, annual home leave is usually provided and includes airfares for families to return to their home countries. Rest and rehabilitation leave can also be provided. It is based on the conditions of the host-country. This provides families with free airfares to a more comfortable location near the host country. Emergency provisions are also available in case of a death or illness in the family. Employees in hardship countries can also receive additional leave expense payments and rest and rehabilitation periods (Dowling, 186-187).
Successful management of compensation and benefits overseas requires knowledge of employment and taxation laws, customs, environment, and employment practices of many foreign countries. Familiarity with currency fluctuations and the effects of inflation on compensation is also necessary. Developing international compensation policies requires a firm to seek to satisfy several objectives. The first objective is that the policy should be consistent with the overall strategy, structure, and business needs of the company. It must also work to attract and retain staff in the areas where the company has the greatest needs and opportunities for growth and profit. A policy must be competitive and it must recognize factors such as incentive for Foreign Service, tax equalization, and reimbursement for reasonable costs.
