Thank you for your question. Please allow me to assist you and provide you with some basis of information before you decide whether or not you can bring a claim against your employer.Typically as per IRS regulations:"
In general, U.S. social security and Medicare taxes continue to apply to wages for services you perform as an employee outside of the United States if one of the following applies:
"But likewise be aware that "f you are permanently working in a foreign country with which the United States has a social security agreement and, under the agreement, your pay is exempt from U.S. social security tax, you or your employer should get a statement from the authorized official or agency of the foreign country verifying that your pay is subject to social security coverage in that country.
If the authorities of the foreign country will not issue such a statement, either you or your employer should get a statement from the U.S. Social Security Administration, Office of International Programs, at the address below. The statement should indicate that your wages are not covered by the U.S. social security system.
This statement should be kept by your employer because it establishes that your pay is exempt from U.S. social security tax.
Only wages paid on or after the effective date of the totalization agreement can be exempt from U.S. social security tax.
Generally, under these agreements, you will only be subject to social security taxes in the country where you are working. However, if you are temporarily sent to work in a foreign country, and your pay would otherwise be subject to social security taxes in both the United States and that country, you generally can remain covered only by U.S. social security. You can get more information on any specific agreement by contacting the United States Social Security Administration. You can get more information from the Social Security International Program Web site.
If this is a purely international position and you pay taxes in the country where you work, then the lack of withholding is valid. Then there is no basis to bring a claim.
Thank you. No taxes are being paid in the country where i work. No social security. The country does not have a bi-national social security agreement /with the US.
I was sent to the country to work and now that i have brought up the social security question my employers have decided to close down and that means i will be out of a job and have to return to the US but i can't file for unemployment or benefits since no social security was being paid in either the US or in the overseas country.
Do i still have a claim or am i completely out of luck?
Thank you for your follow-up.This is a tough position to be in. If this was purely international, I do see it as a situation where non-payment is not a violation, which would made you out of luck. However you could argue (potentially anyway) with the company and the IRS that this was a temporary position and that the employer was obligated to withhold taxes. I honestly do not know if you would prevail as this is very much based on whether the intent for the position was for it to be permanent or temporary, but it is a potential shot at trying to make the employer liable.Good luck.
Thanks again, just a bit of clarification, what do you mean by "purely international"? Are you saying the company is NOT US (therefore international?) or are you saying if i was hired while i was outside the US by the company as opposed to being in the US and being assigned to the overseas US company.
Since the basis would be if it is purely international i need to know exactly what that means and whether or not it applies to my situation.
How can i tell if my situation is purely international or not?
By 'purely international' I mean that this was designed to be a permanent position and not a temporary one--that you were going to be based out of the country, not the US. This is not a legal term, it is a descriptive term based on how you were employed. In essence the less of a link you ahve to the US company, the weaker your claim may become.Good luck.
Thank you..just one more thing...i am the general manager of the overseas company, i only answer to our US headquarters in California, the board members there are the same board members on the local company, i can't do anything with out direct instruction from the board and the other officers of the company in the US.. Is this a weak link? How strong is this link?
That is still a fairly weak link, I am afraid--the reason is because you are still the general manager and can operate the company day-to-day yourself. Answering to headquarters makes it more akin to a subsidiary then a direct day-to-day link, and that likewise weakens the claim that this was anything but a permanent position. A temporary would akin to consulting who would appear for 3 days a week and then fly back, but a permanent position is one where you primarily work overseas, and then fly back either for meetings or for family, but not primarily as part of your job description.Good luck.
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