Legal issues of labor relations: what is important to know for an employer who hires employees remotely from another country
Remote recruitment of employees from other countries is becoming increasingly popular among companies looking to attract the best talent regardless of geographical location. So often the goal is to minimize costs legally and create a more flexible team. However, this format of work involves a number of legal nuances that are important for employers to consider. In this article, we will look at the key aspects related to labor law, taxation, contracts and data protection.
Legal status of a remote employee
Before hiring a remote worker from another country, it is necessary to determine his legal status. Three main options are possible:
Formalization as a full-time employee – in this case, the employer must comply with the labor laws of the employee’s country.
Contract with a self-employed or freelancer – a less formalized option where the employee works as an independent contractor. And the payment of taxes and bookkeeping is his responsibility.
Work through an intermediary (EOR – Employer of Record) – a special service that takes care of legal and tax issues of employment.
Labor contract and its peculiarities
When hiring a remote employee, it is important to clearly specify the terms of cooperation in the contract:
Form of employment (labor contract, freelancer contract, etc.).
The amount and procedure for payment of remuneration, including the currency of settlement and possible tax deductions. Dates of the contract. Preferably in several languages to eliminate the possibility of misunderstanding some points.
Work schedule and time zone – take into account the time difference when forming work processes.
Intellectual property – the rights to developed products or services should be clearly stated in the contract.
Confidentiality and data protection are especially important if the employee works with confidential information.
Taxation and financial aspects
Taxes are one of the most complex issues when hiring remotely:
Depending on the employee’s country, different tax rates and rules may apply.
The employer must take into account the requirements for social contributions and pension contributions.
Some countries require foreign employers to register a tax representative office.
The optimal solution may be to work through payment platforms or EOR providers that take care of tax obligations.
Visa and immigration issues
Although an employee works remotely, their legal status in their home country can make a difference:
In some countries, working for a foreign company may require special visas or permits.
If an employee plans to relocate, visa requirements and possible restrictions should be considered.
Some companies provide support in obtaining digital nomadic visas, which simplifies the employment process.
Data protection and compliance
Employers must comply with personal data protection requirements, especially if the job involves client information:
GDPR (EU) – strict data processing regulations in Europe.
CCPA (US) – protection of personal information of users from California.
Local laws – each country may have its own requirements for data processing and storage.
Risks and ways to minimize them
To minimize legal and financial risks:
Consult with lawyers specializing in international labor law.
Use professional HR services and EOR platforms.
Clearly spell out terms in contracts and comply with local legislation.
Remote recruitment of employees from other countries offers great opportunities but requires careful attention to legal issues. It is important for employers to consider labor laws, tax obligations, data protection issues and possible risks. Companies that organize the process correctly can attract the best specialists from all over the world and successfully build international teams.
Our company offers services as an intermediary between employees as self-employed persons and the client company. The format of arrangement is consulting services. We guarantee support for all contracts and transactions, as well as flexibility and an individual approach to each client!
Intuition in recruiting: why it hinders objective employee recruitment
Intuition. It’s a mysterious subject that’s never been solved today. How does it work? Is it always right, and why is it wrong?
Some believe in intuition. Some believe only in objective facts and logic… Some people trust their intuition so much that they rely on it in everything, even in choosing candidates for vacancies, even for the customer’s business….. Other people tend to make decisions following calculations and do not take intuitive signals into account at all … Where is the truth? What works? What to rely on?! On the candidate’s resume, experience, and skills, or on a gut feeling called intuition?
They evaluate “how a person feels, “whether they fit the vibe,” or “whether they are pleasant to be around.” However, this approach can lead to biased decisions that hurt the company in the long run.
What’s wrong with intuitive sourcing?
Intuition is a powerful tool, but in recruiting, it often replaces objective selection criteria. This leads to the following problems:
Bias. Intuition is still often confused with simple preference based on personal choice! A recruiter can easily base his/her selection on personal liking rather than on the candidate’s professional qualities. For example, similar interests, appearance types, age, gender, or manner of communication can make the difference, although these factors have no bearing on a person’s ability to do the job and be beneficial to the company.