7 ms·

I'm with you on principle. To my knowledge, the main barriers are managing the payroll: how do you deal with each countries' laws and obligations for each of y

I'm with you on principle. To my knowledge, the main barriers are managing the payroll: how do you deal with each countries' laws and obligations for each of your remote employees ? The traditional way to do that at scale is to go through a local proxy company that abstracts the complexity and is the legal entity responsible for the workers in that country. Except you have to pay that middle-men, maintain an ongoing relationship, and if for instance a tenth of your engineers are managed by them, their bargaining power will be pretty high and the cost will rise. If as a company you deal with each individual employee instead, you have to also directly manage all the legal aspects. Hiring freelance workers only can partially alleviate that, but this comes with its own can of worm, and the complexity stays the same in case of conflict (imagine getting sued by the worker in their own country)

deleted 3y ago
[deleted]
bitL 3y ago
You don't have to. Your foreign workers can be independent consultants receiving money from you, paying their own taxes. You just need their W-8BEN every year.
- thaumasiotes 3y ago
  In my experience, there is nothing an employer hates more than the idea of letting employees become contractors.
  - SoftTalker 3y ago
    They love having contractors, what they hate is having contractors and the IRS later telling them "no, they are employees, and you owe payroll taxes and penalties for the last 5 years"
    - bitL 3y ago
      That risk is eliminated with foreign contractors. It's import/export of services.
      - makeitdouble 3y ago
        On an individual basis that makes sense (in particular if you really handle it like a service exchange contract, with little to no management on how the person do their work) In this day and age though, I wonder how much it actually works . For instance if one of your contractor does something completely illegal in your country and you get media backlash for it, you're in a tight position if that thing was perfectly legal on their side, and wasn't covered by the contract as you had your own country's law in mind. I'm not sure you could push your country's law on them, nor that it would help your situation as your company is still fronting the backlash.
        ipaddr 3y ago
        That seems so rare it is not worth worrying about
        makeitdouble 3y ago
        In the grand scheme, having remote workers not handled by a proxy company is also extremely rare. And even in that setup, we all remember Nike and many other apparel makers stuck with the "child worker in a factory" image basically forever. Or Apple being questionned about FoxConn's working conditions, or the environmental impact. When it comes to PR, pushing the responsibility to the foreign contractor doesn't looks like a good working strategy IMHO.
      - AmericanChopper 3y ago
        It’s actually made substantially worse by the fact that every jurisdiction that you “hire” a remote worker in is another jurisdiction whose laws you have to comply with. An American contractor suing an American company in a Californian court is at least a risk their legal department should know how to manage. An Australian contractor suing an American company in an Australian court, followed up by an Australian labor authority taking action against them for say not paying proper sick leave entitlements, is something they’d be much less equipped to handle. Then just multiply that by the number of jurisdictions they hire these remote workers in, which is information they might not even have.
- makeitdouble 3y ago
  That still means you negociate and maintain individual contracts with each of them, and have to deal with what happens when conflicts arise (let's say one of them disappears with a client's confidential info in the middle of a critical project. Your only reasonable action is to cut the losses, short of trying to go sue them in Zimbabwe's court) Or more interestingly, I'd assume an independant consulting contract could be void in many legislations if it happens that their work should be reclassified as employment under some specific rules (e.g. you dictate their working hours etc.) Basically, is the contract valid under the worker's country laws is a question you won't be able to ignore I guess ?
- dghlsakjg 3y ago
  That makes them compliant with American law. Your company may still not be in compliance with local law (which can differ significantly in the liberal interpretation of what the us thinks a contractor is), and that can cause serious issues.
  - pb7 3y ago
    Earnest question: what serious issues do you envision if the company doesn't physically operate in that country?
    - dghlsakjg 3y ago
      The employee may find themselves in hot water or facing some serious tax implications, the company may find that they are no longer able to do business there, the executives of the company may find that they have trouble at the border. Depending on treaties, not having a formal business entity in a country doesn’t make you immune to their laws and taxes (not a lawyer, but it is totally possible to collect foreign debts in the US for example), if you’re publicly traded, breaking foreign laws intentionally is a BAD idea. On top of all that most companies strive to stay on the right side of the law regardless of the ability to get away with it. Not an exact parallel, but see the saga of the Huawei exec who was arrested in Canada on behalf of the US for a business deal made by a Chinese company with Iran. Are you probably going to get away with it? Yes, if you aren’t a very big fish. But what if you don’t.

deleted 3y ago

[deleted]

bitL 3y ago

You don't have to. Your foreign workers can be independent consultants receiving money from you, paying their own taxes. You just need their W-8BEN every year.

thaumasiotes 3y ago
In my experience, there is nothing an employer hates more than the idea of letting employees become contractors.
- SoftTalker 3y ago
  They love having contractors, what they hate is having contractors and the IRS later telling them "no, they are employees, and you owe payroll taxes and penalties for the last 5 years"
  - bitL 3y ago
    That risk is eliminated with foreign contractors. It's import/export of services.
    - makeitdouble 3y ago
      On an individual basis that makes sense (in particular if you really handle it like a service exchange contract, with little to no management on how the person do their work) In this day and age though, I wonder how much it actually works . For instance if one of your contractor does something completely illegal in your country and you get media backlash for it, you're in a tight position if that thing was perfectly legal on their side, and wasn't covered by the contract as you had your own country's law in mind. I'm not sure you could push your country's law on them, nor that it would help your situation as your company is still fronting the backlash.
      - ipaddr 3y ago
        That seems so rare it is not worth worrying about
        makeitdouble 3y ago
        In the grand scheme, having remote workers not handled by a proxy company is also extremely rare. And even in that setup, we all remember Nike and many other apparel makers stuck with the "child worker in a factory" image basically forever. Or Apple being questionned about FoxConn's working conditions, or the environmental impact. When it comes to PR, pushing the responsibility to the foreign contractor doesn't looks like a good working strategy IMHO.
    - AmericanChopper 3y ago
      It’s actually made substantially worse by the fact that every jurisdiction that you “hire” a remote worker in is another jurisdiction whose laws you have to comply with. An American contractor suing an American company in a Californian court is at least a risk their legal department should know how to manage. An Australian contractor suing an American company in an Australian court, followed up by an Australian labor authority taking action against them for say not paying proper sick leave entitlements, is something they’d be much less equipped to handle. Then just multiply that by the number of jurisdictions they hire these remote workers in, which is information they might not even have.
makeitdouble 3y ago
That still means you negociate and maintain individual contracts with each of them, and have to deal with what happens when conflicts arise (let's say one of them disappears with a client's confidential info in the middle of a critical project. Your only reasonable action is to cut the losses, short of trying to go sue them in Zimbabwe's court) Or more interestingly, I'd assume an independant consulting contract could be void in many legislations if it happens that their work should be reclassified as employment under some specific rules (e.g. you dictate their working hours etc.) Basically, is the contract valid under the worker's country laws is a question you won't be able to ignore I guess ?
dghlsakjg 3y ago
That makes them compliant with American law. Your company may still not be in compliance with local law (which can differ significantly in the liberal interpretation of what the us thinks a contractor is), and that can cause serious issues.
- pb7 3y ago
  Earnest question: what serious issues do you envision if the company doesn't physically operate in that country?
  - dghlsakjg 3y ago
    The employee may find themselves in hot water or facing some serious tax implications, the company may find that they are no longer able to do business there, the executives of the company may find that they have trouble at the border. Depending on treaties, not having a formal business entity in a country doesn’t make you immune to their laws and taxes (not a lawyer, but it is totally possible to collect foreign debts in the US for example), if you’re publicly traded, breaking foreign laws intentionally is a BAD idea. On top of all that most companies strive to stay on the right side of the law regardless of the ability to get away with it. Not an exact parallel, but see the saga of the Huawei exec who was arrested in Canada on behalf of the US for a business deal made by a Chinese company with Iran. Are you probably going to get away with it? Yes, if you aren’t a very big fish. But what if you don’t.