For years, process outsourcing has allowed companies to organize production, logistics, warehousing, and other operational processes flexibly. The problem arises, however, when the line between true process outsourcing and the provision of personnel becomes blurred.
When hiring foreign nationals, this limit is even more important.
The proposed changes to the regulations governing the hiring of foreign nationals, as well as the practices of the authorities responsible for legalizing employment, are making it increasingly clear that companies must be prepared to do more than simply demonstrate that a foreign national possesses the proper documents. It is also becoming increasingly important to prove who actually organizes the foreign national’s work, on whose behalf the work is performed, and what the nature of the cooperation between the companies is.
For the outsourcing industry, employment agencies, and manufacturing and logistics companies that rely on external teams, this is currently one of the most significant areas of risk.
Process Outsourcing vs. Hiring Foreign Workers—Where Does the Problem Lie?
In a properly organized outsourcing arrangement, a company contracts with an external provider to carry out a specific process or part of a process.
For example, this could be:
- order fulfillment,
- packaging and kitting,
- support for the selected warehouse process,
- a specific stage of production,
- quality control,
- implementation of other specific operational processes.
The essence of this type of collaboration is not simply providing the client with a specific number of people.
The subject of the service is the process.
The contractor should therefore have its own organizational structure, manage its team, and be responsible for the proper execution of the assigned scope of work.
In theory, the difference seems clear. In practice, this is where the biggest problems begin.
When does outsourcing start to resemble staff leasing?
Let's imagine a warehouse where a team of several dozen people from an outside company works every day.
The agreement between the companies outlines the logistics process. However, if in practice it is the client’s managers who directly assign tasks to individual employees, set their schedules, issue instructions, and manage staffing, the question arises:
Was the process actually outsourced, or were employees simply hired into the organization?
This distinction takes on particular significance when hiring foreign nationals.
This is because the authorities responsible for reviewing cases involving work authorization may examine whether a foreign national is actually performing work for the entity specified in the documentation or whether, in practice, the individual has been assigned to work for another company.
Working on the client's premises does not automatically constitute illegal outsourcing
This is an extremely important distinction.
In many logistics or manufacturing processes, it would simply be impossible to perform the service outside the customer’s facility.
The product picking process must be carried out at the warehouse. Operations for a specific stage of production take place where the production line is located. Similarly, operators of specific logistics processes must have access to the company’s infrastructure.
Therefore , the location where the work is performed should not automatically determine the nature of the working relationship.
The entire organizational model is significant: the subject matter of the contract, the contractor’s scope of responsibility, how the team is managed, and the actual relationships between employees, the contractor, and the client.
And this is precisely where one of the problems with the current regulations arises—the line between legitimate process outsourcing and the actual provision of personnel is not always clear enough.
The agency may want to see more than just the employee's documents
In practice, when it comes to proceedings regarding the legalization of employment, it is not only the foreign national’s own documentation that may be relevant.
As indicated by the analysis by C&C Chakowski & Ciszek, regulatory authorities may request documents that help determine the actual nature of the relationships between companies—including contracts with business partners or documents related to the billing of services rendered.
For entrepreneurs, this represents a significant shift in perspective.
The legalization of a foreign national’s employment is increasingly linked to an assessment of the entire business model within which that person performs their work.
So it's not enough to simply answer the question:
"Does the employee have the proper documents?"
You also need to be prepared for:
"Why does he work here, and who is actually responsible for his work?"
Process outsourcing is not the same as temporary work
This is another area that requires a clear distinction.
In the case of temporary work, an employee is assigned by a temporary employment agency to a client employer. The model itself therefore involves performing work for and under the direction of the client employer within a detailed legal framework.
Process outsourcing is based on a different premise.
The customer does not order an employee.
He instructs that the process be carried out.
The contractor should be responsible for its organization, the team, and its execution in accordance with the terms of the contract.
Therefore, automatically treating every arrangement in which a contractor’s employees are on the client’s premises as temporary work may blur the distinction between two different ways of organizing a business.
The proposed regulations will further limit the flexibility of civil law contracts
The potential changes don't end there.
The proposed measures regarding the employment of foreign nationals also include restrictions on the number of hours worked under civil law contracts.
According to the current draft, the standard number of hours specified in work authorization documents would be limited to 184 hours per month.
This is particularly important for logistics and manufacturing.
In these industries, demand can change very quickly. A new contract, an increase in orders, a peak sales season, or the need to add an extra shift can quickly increase a company’s operational needs.
If the new regulations are adopted as proposed, an increase in the number of hours worked by a foreign national under a civil law contract may require obtaining a new document authorizing employment.
This means there is less room to respond quickly to a changing business environment.
It is worth noting that we are currently discussing proposed solutions, not the current limit.
The contract may be valid. The problem may arise at the facility.
This is one of the most important practical takeaways for entrepreneurs.
Risk does not always arise during the drafting of a contract.
It often doesn't become apparent until the project is underway.
A company may have a properly drafted outsourcing agreement, a defined process, a scope of responsibility, and its own contractor coordinators.
And then everyday life sets in.
The client manager begins to give direct orders to external employees. He changes their schedules on his own. He moves specific people between positions. He decides who is to report for work the next day.
As a result, the formal outsourcing of the process is gradually beginning to operate differently than stipulated in the contract.
Therefore, the review of the outsourcing model should not be limited to an analysis of the documentation.
We need to assess the operational reality.
7 Questions Every Company Should Ask Itself Today
Companies that use process outsourcing—especially when hiring foreign nationals—should verify several key issues:
- What are we actually buying from the contractor—a process or a specific number of people?
- Who manages the work of the outsourcing team?
- Who gives employees their day-to-day instructions?
- Who is responsible for staffing, finding replacements, and organizing shifts?
- Does the contractor have coordinators or management staff who are actually performing their duties?
- Does the billing method correspond to the nature of the service provided?
- Is the actual model of cooperation consistent with both the outsourcing contract and the documentation regarding the legal employment of foreign nationals?
If the answers to some of these questions are ambiguous, it’s worth taking a closer look at how the process is organized.
Hiring foreign nationals today requires taking a holistic view of the entire process
This is also an important change for HR departments.
Work authorization cannot function as a completely separate administrative process.
A foreign national’s documents, form of employment, scope of duties, place of work, and the way the work process is organized are all interrelated.
If one of these elements changes, the impact of that change on the others must be assessed.
In practice, this means there is a need for closer cooperation between HR, the operations department, those responsible for legal compliance, and the outsourcing partner.
What should companies that outsource work to foreign nationals do?
The worst strategy would be to wait until the first problems arise during proceedings or inspections as the new regulations are put into practice.
It’s worth conducting a three-level audit today.
Documentation: Do the contracts accurately describe the process, the scope of responsibilities, and how the work is to be carried out?
Operations: Does the day-to-day organization of work actually correspond to the model specified in the contract?
Legalization: Do the conditions under which foreign nationals perform their work remain consistent with the grounds for their legal employment?
Only by combining these three elements can a company gain a true picture of its risks.
Safe outsourcing is more than just providing employees
The increasing requirements for hiring foreign nationals highlight yet another important change in the market.
The selection of an outsourcing partner should not be evaluated solely based on how quickly it can provide the necessary number of people.
Other important factors include how the process is organized, the legality of employment, the contractor’s own coordination structure, the alignment of documentation with actual practices, and the ability to respond to regulatory changes.
At the NJOB Group, this is exactly how we approach process outsourcing—as comprehensive responsibility for the assigned area, rather than simply providing staff.
For a company that outsources, this difference may become increasingly significant.
Legal Outsourcing in the New Reality: What Will Be Most Important?
The direction of the proposed changes is clear: hiring foreign nationals will require employers to be increasingly precise and to show less and less tolerance for discrepancies between documentation and the actual manner in which the work is performed.
For process outsourcing to function properly, this does not necessarily mean the end of flexibility.
However, this means that flexibility must be well organized.
Employers should be able to demonstrate which process has been outsourced to a contractor, who manages it, who is responsible for its implementation, and why employees—including foreign nationals—perform their duties under this particular model.
Because in the new reality, the question may no longer be simply:
"Is it legal to hire a foreign national?"
It will become increasingly important to also consider:
“Does the entire model under which this work is being carried out actually correspond to what is set forth in the documents?”