Hiring is one of the things that is very different to a traditional company. In a traditional company, the company usually stems from the area you're hired in, or at least has set up payroll there. Hiring people is easy and a normal employment contract is usually enough to get people hired full-time.
The responisibilities of a employer are very regulated too: PTO days are usually fixed, payroll knows how to deal with possible deductions, such as taxes, social and benefits, and local specialities are usually accomodated. Not so much with remote work.
When hiring remote, you have to keep a few things in mind:
There is a lot to watch out for, but if it's at the time, how can you legally hire a remote employee?
If a company is planning to set up a hub in a specific country, it can be worth it to establish a permanent sub-corporation in that state or country. In that case, the company officially incorporates there, sets up payroll (which usually involves hiring an accountant or accounting consultant) and then has the ability to legally hire people in that country or state.
This is not trivial and probably not an option unless you're a bigger corporation looking to hire 10+ people (depending on country) there. The time commitment and cost is simply too high and things can get complex with multiple sub-corporations in terms of administration and taxes.
The advantage of it is clear: There's no substantial additional administration cost per hire, employees are employed with a local employer (often taking a lot of effort off their shoulders) and while the initial setup is taking a lot of effort, the maintaining of the corporation isn't so much work compared to some other options.
Often a preferred way to hire people in remote companies is to simple list them as a contractor and getting invoiced from them on a monthly basis. This puts much of the needed effort on the shoulders of the employee, which in small companies is often more preferable.
It's absolutely needed to give employees time for administration in this case. Additionally to their work, they will have the handle any or all of the following, depending on country:
While this sounds like a lot of work, a lot of these are once-per-year activities. Most remote companies still tend to go with this options. It's the cheapest, possibly fastest, simplest and most flexible way to get someone hired.
In some countries, getting hired as a contractor is just not so easy as it might seem.
When I started working remotely personally, I looked into this for my home country Switzerland, and quickly realized that this came with too many disadvantages. Namely:
So we went ahead with a local payroll service.
A payroll service or global employer is a company that has set up payroll in a country. They're able to hire people locally, do all the work required for a local employee, and invoice the "real" employer accordingly. This service often costs $100 - $300 per month per employee, so as things scale up, can get costly. But else it is the least amount of effort required to hire someone remotely.
I like payroll companies so much, that I've put together a list of them, one for (almost) every country out there. Whether you're looking to hire someone in Canada, Australia, Germany or Barbados, there is a payroll company there.
Hiring employees in your own country is fairly simple. The only real differences may be between state or regional taxes and regulations. But if you want to hire remote workers in foreign countries as employees or contractors, then it becomes more complex.
Global job boards allow you to post and distribute your postings to hundred of thousands people worldwide, but do you really want that?
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