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There are also additional issues with this arrangements. For example, social security payments. Pension plans, etc. A simple example, Israel has mandatory pen
by ayende 4y ago
There are also additional issues with this arrangements.
For example, social security payments. Pension plans, etc.
A simple example, Israel has mandatory pension plan requirement for all employees. If you are working remotely in Israel "as if in the US", you are now opened to a whole bunch of interesting questions. Employer isn't aware of that, in this scenario, so isn't paying the pension.
That creates:
* criminal liability for the company
* criminal liability for the management team personally
* the company is assumed to be "self-insured" and basically has to act as the pension provider for the employee.
You fall down and become invalid at the age of 27? The pension insurance will pay for that. Which is basically the company. Then you have to pay 60+ years of pension payments to that employee.
And that is _one_ aspect of this issue.
Others are related to laws. What is the minimum wage? How do you compute the allowable number of hours and overtime pay?
For fun, let's say that you are working for a few years in this mode. The employee then sues the company for overtime pay (200%) because that is the law where they are working.
Firing someone, also, is a totally different process across jurisdictions. In Israel, you have to pay a month's salary for every year that the employee worked for you (based on the last 3 - 6 months).
You have to fire a senior guy that worked for you for 6 years? Prepare to pay immediately a big chunk of money.
Also, have fun with _another_ criminal liability (for the company & leadership) because you didn't pay insurance for this scenario.
The company in this question is going to be absolutely against this sort of exposure.
For that matter, it isn't even legal only that is going to object. If you are a public company, you need to put things like "liabilities in case we have to fire people" in the balance sheet. The CPA is going to have a field day with all those undisclosed issues.