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Ask HN: Why are most Startups asking for US Remote instead of just Remote?
Does it matter which country the employee is located in if the job is remote?
I understand that timezones may mismatch but employees generally accomodate to the timezone everyone wants.
The different countries payroll can be handled by a decent Saas itself.
So, why are companies hellbent on getting US Remote Employees instead of Remote anywhere?
- kidgorgeous 3y agobenefits. govt subsidies
- tough 3y agoDoes it make sense for a non-US developer to just set up an LLC to offer his services at US rates? I can deal with 3 in the AM meetings or whatever if the pay is good anyways.
- badpun 3y agoI'm guessing part of the reason for startups specifically is, US remotes will be shown as employees, while non-US remotes will technically be contractors, thus not counting towards the head count - which is one of the things that determines the valuation once the company is flipped in an IPO or acquisition.
- b20000 3y agobecause of legal and tax reasons and because they want to have the idea you are local
- donnie12345 3y ago@prakhar897 The question is based on wrong premise. Developing countries like India don't have engineering talent and that's the reason why US startups do not want to hire any unskilled employee. They are giving these lame responses to these unskilled candidates because they don't want be seen as rude.
- redmerchant2 3y agoWhy bother? Recruiting in another country, figuring out what work experience or schools are legitimate etc is extra hassle. Taxes, different holidays, language/communication problems etc. US talent pool is already deep enough. If they want to use other countries it’s just for lower wages.
- dsq 3y agoIt is of course true that skilled people can be found everywhere. The US however is unique in being the largest developed country with positive inward immigration. This gives it the depth you speak of. No other country has this combination of factors.
- cpursley 3y agoThat’s just not true and you know it. There’s many other reasons to hire somebody other than wages.
- sieabahlpark 3y ago[dead]
- wil421 3y agoWhy would a startup go through the hassle if they didn’t need too?
- deleted 3y ago[deleted]
- cpursley 3y agoFor the same reason I once hired a guy in Jamaica to build a very specific bit of adapter code. None of the domestic applicants understood the problem as well as he did when interviewing. And let me tell you, he delivered! The world is much bigger than San Francisco and New York - there's smart, skilled people everywhere.
- sieabahlpark 3y ago[dead]
- codegeek 3y ago"If they want to use other countries it’s just for lower wages." Why not as long as the person I am hiring is equal or better than a similar person in America but say 1/5th the cost. Capitalism 101. Lower Wages does not always mean lower quality. It just means that an American has to compete harder because they need say 5x salary of their foreign counterparty. With fully remote world, why would I not hire anywhere in the world as long as I find the right person.
- tarunmuvvala 3y agoThis is very recent change. There should be some benefit for the company too. I know a company which hired the best MIT PhD but they also hired the best IIT PhDs for the work. Both of them do equally good. But the IIT PhDs are more cost effective and hence they expanded the program in India.
- lisasays 3y agoIt doesn't always matter. But sometimes it does. A great deal in fact. Language, culture, verifiability (even on the level of being able to do a standard background check), payroll, legalities. And all the other reasons they aren't always keen to use offshore people, even if it seems "cheaper". And did I mention language, culture? The different countries payroll can be handled by a decent SaaS itself. Throwing a different payroll system into the mix for the the sake of 1 or 2 resources can easily end up being more trouble than it's worth.
- janosdebugs 3y agoI would assume legal compliance in more than one way. Some countries don't allow you to fire employees as you wish, you have to comply with worktime regulations, etc. Your ability to ask for noncompetes, or have the employee sign over their rights to all IP concieved during the employment may also be challenging. If you mess up, you might get sued in an unfamiliar jurisdiction. All in all, a whole lot of legal work that is only worth it if you can't fill the position otherwise.
- barrysaunders 3y agoTax, work rights, compliance, labor protections and entitlements all get pretty complicated. Some countries have high levels of public holidays, rules around dismissal that get legally complicated in the case of downsizing. It's not simply a thing that can be handled by a SAAS.
- deleted 3y ago[deleted]
- MagnumOpus 3y agoThough it is a thing that can be handled by Umbrella-corporation-as-a-Service such as Remote.com - that is their whole business model. (Not cheap though - $7k per employee per year.)
- barrysaunders 3y agoit can handle part of it, it doesn't solve for a lot of things around compliance and risk. They might help you understand local compliance, but the business still needs to be actually compliant. Just look at the mess Twitter got into trying to downsize their international operations. If you're an american startup, then you have to balance the tradeoff of risk in having international staff that might require considerable thought in managing them, vs having a single compliance profile.
- ayende 3y agoHuge hassle regarding taxes, legal details, etc. For example, if you hired someone in Israel, you are mandated to pay taxes, contribute to pension plan, etc. There are labor laws details that you need to know how to work through, etc. As a fine example, let's say that you have hired someone in Israel and they worked for you for 5 years. You covered payment and told them that they'll cover local taxes, etc. You now want to fire them. The following sequence of events happen: * They sue for wrongful termination (there is a particular process to follow) * They sue for missing pension contributions (the law says that if you didn't contribute to the pension, you are both civilly and criminally liable). And it can be that you are found to be effectively the "pension fund". * They sue for severance pay, which is calculated as 1 month of salary X years worked. That can be a huge surprise for you. That is leaving aside things like what happens around work accidents. Did you carry local insurance for that? Or are you on the hook for millions because of that? Those are all things that can be solved, but they are a major headache.
- mozball 3y agoIs there no app/api that abstracts all this away?
- rich_sasha 3y agoThere are agencies that do this. They have international offices, they hire the remote-abroad employee as a real employee of theirs, and the hiring company contracts the agency as a B2B deal. The agency is on the hook for all these things. I don't know anyone who has ever used these so I guess they are expensive and awkward. To answer your question more directly, it's not an app but rather a conglomerate of international brick-and-mortar businesses, with legal departments, HR, payroll, insurance... Not lightweight.
- chpatrick 3y agoWe used remote.com for this and it was a pretty smooth experience actually. It's not "cheap" (around 600 per month per employee), but not massive relative to the cost of employing someone.
- bradwood 3y agoMost _US_ startups, you mean. Startups actually do exist outside of the US, believe it or not. And you may find that those are a lot less picky than US ones about the location of remote workers.
- SideburnsOfDoom 3y agoUK based here, and HMRC (the UK tax man) is quite picky too. It is, as others have noted, a hassle to hire outside of your government's jurisdiction for many legal reasons, tax being the first of them but not the last. Medium-sized companies will have a "legal entity" in e.g. EU and US as well, and can hire workers in those polities. The workers are then "employed" by the legal entity for HR purposes, regardless of where their immediate co-workers are located. There are also legal limits on how many days per year one can work "abroad" - company policies on this do vary, but HMRC imposes strict constraints on what is allowed. A max of several weeks per year is what I've seen. Also it's not from "any country", it excludes the ones on this list: https://www.gov.uk/government/collections/financial-sanctions-regime-specific-consolidated-lists-and-releases https://www.gov.uk/government/collections/financial-sanction...
- jrowley 3y agoSome employers have gov or otherwise paranoid customers that require data not leave the country.
- deleted 3y ago[deleted]
- petra 3y agoDoes it matter if you are a US citizen(or an EU citizen for a similar case) that lives in another country?
- bsmith 3y agoYes, because you are taxed based on where you do your work, not where you are from, or where your employer is from.
- sschueller 3y ago* Except American's, which are also taxes by the US in addition to where they are currently located.
- paddim8 3y agoMost don't. Most in the US might.
- gnrlst 3y agoAll the comments here focus on the complexity/beaurocracy/contract/etc, without realizing there are companies like Deel that take all that complexity away. Also, some (smart) startups also have full time contractor agreements for ex-NA remote employees, so you are considered an employee in every aspect internally but rather than payroll you send an invoice every month. This works well because most employment contracts are tied to local market rates and bands.
- hactually 3y agoYou're asking why businesses aren't employing people working across timezones AND deploying a second payroll system AND ignoring the cultural/benefits package incl. gov based subsidies the business misses out on due to hiring internationally AND the tax complications... Have you ever started a business and run it with a team of folk from across the world on a budget (not including just contracting people via UpWork etc)?
- hinata08 3y agoMaybe working with employees from different countries can cause a great stress for some teams. Employees can be upset that you hire oversea. They expect that coworkers there are underpaid, and that you hired these people for that reason. So the image of the company gets a hit even among your workers. And if you go oversea for workforce, they could think that their job will be outsourced as well in the future. And you won't get the same engagement. Differences in culture do exist as well. I have heard wild stories about outsourcing in India. Jet lag is also a thing. kidgorgeous's benefits. govt subsidies can be also right. I think the YC themselves funds nothing but local startups (do they ? I haven't tried to fund a startup yet) Anyway, it's difficult to promote a company that doesn't have any local impact. However, all the tax and labor laws things are overstated. Countries like France, Romania, India, or Morocco have efficient consulting firms. Large and small companies from any industry work with them everyday on every kind of subject (IT, engineering, ...)
- fy20 3y ago- Culture and language. Even if you compare US vs UK, the UK is much more European in it's approach to work. If you want to exploit people and have them dedicate their life to your company, better stick to US workers. - Working hours. If you are on the West Coast, good luck finding someone in Europe who will be available at 3pm your time. - Superiority complex. I get the impression a lot of Americans treat everywhere else like it is a third world country. I work for a US company that has a branch in a post-Soviet EU country, and when the C-levels were discussing expanding our team, they were talking as if there would be a queue of people waiting at the door to interview. Taxes and employment laws are really not an issue, there are plenty of ways around it, especially if you are a small startup. As others have pointed out, the simplest way is to treat someone as a 1099 independent contractor. You pay them gross, and let them deal with all their own tax responsibilities. If you want proper employees there are agencies everywhere who will deal with this for you, and in a lot of cases government agencies will help you and / or give you tax breaks as they want you to invest in their country. (Source: As a European, I've worked half my career remotely for US companies)
- cm2012 3y agoI promise you, laws, regulations, liability and beaureucracy are huge issues in hiring internationally. Example: if you run a marketing agency in the US, most liability insurance absolutely forbids non US workers from working in your ad accounts.
- hinata08 3y agoindeed I've already been asked by some silicon valley guy on Discord if France did tech and had universities. Like come on, Europe is not stuck at La Belle Époque and Victorian Era. And even then, it had tech. And despite not having a job there atm, they want to stay in California. I told him there are plenty of well paid IT jobs in Europe, but apparently the USA is a special place, and you have to be pay uni debt, and stuff like that.
- leereeves 3y ago> the simplest way is to treat someone as a 1099 independent contractor This is not so simple. Genuinely treating someone as an IC means giving up a lot of control. As the IRS says: You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). And merely calling someone an IC while actually controlling their work hours, projects, etc risks legal consequences.
- Core_1 3y agoThe most obvious reason is taxes and complications with the IRS. The current legal immigration and taxation systems have not foreseen that people from other countries are not living in the U.S. while working in the U.S. The assumption is that once you’re hired by a company in the U.S., you are either working there with a local work permit (for the U.S.), on a work visa, or sent to a different country coming from the U.S. (being either U.S. citizen or having the U.S. residence permit).
- igetspam 3y agoWe have a pretty geographically diverse remote team. It's wildly complicated to deal with, both from a team side and the HR side. Coordinating conversations with everyone when they're spread all over the world leaves very few possible times and those times are needed by everyone, so there's a lot of meeting collision. And employment law is different everywhere. You can't afford to setup "offices" in every location, so everyone is a contractor/consultant. They work full time and have an equity plan but it's all a bunch of little personal businesses. Focusing on a few key locations makes this more manageable. Big companies can afford the investment into many small locations and they can afford having the regional expertise to avoid running afoul of local and federal governments. In an ideal world, we'd make this easy for ourselves but the world is not ideal.
- mattpallissard 3y agoI've worked at a lot of places that posted us only jobs while also employing many overseas independent contractors. Typically when I've seen job postings US only they're looking for some type of coverage during US business hours; on-call, supporting juniors, meetings with c-suite, etc.
- ezedv 3y agoStartups often prioritize US remote candidates due to various factors like market access, time zones, and talent pool density.
- dyeje 3y agoTimezones and additional administrative overhead mostly.
- Chrisstar 3y ago[dead]
- nektro 3y agobeing remote or not doesnt affect things like work visas and payroll/tax/benefits differences
- b20000 3y agobecause remote according to them means "be close enough so you could just as well be on site"