Companies often do not know where to turn when they have temporary needs for highly skilled workers who either have working knowledge of their business operations or can learn them quickly. A secondment arrangement is often worth considering when neither hiring a new employee nor engaging an independent contractor is desirable. Counsel charged with guiding companies through staffing and contracting for labor should know the practical and legal implications of secondment arrangements.

A secondment is a temporary assignment of an employee from one organization (employer) to another (often referred to as the host) for a specified period of time, usually to carry out a particular project or to cover the post of a critical employee who is on a leave of absence. A secondment can be a transfer within the same organization or between two unrelated business entities. It can also be a domestic or overseas (or expatriate) assignment. An employer and a host typically memorialize their secondment arrangement in a formal secondment agreement. The employer often supplies the seconded employee with a separate letter that describes the terms of the secondment.

Parties often enter secondment agreements to:

During a secondment, the employer continues to employ the seconded employee. The parties generally anticipate that the seconded employee will return to his original position with the employer at the end of the secondment.

Although the terms in secondment agreements vary, especially between domestic and overseas secondment agreements (the latter of which raises additional issues, such as multinational immigration and tax law compliance), they typically include provisions that:

Practical Law has a collection of resources to help employers develop domestic and expatriate secondment agreements. These resources address the various legal, negotiating and drafting issues that employers should consider when:

For more information about these issues, see the following key resources: