Remote Work
December 15, 2020

Dhruvi J.

5 Compliance Mistakes to Avoid When Hiring International Workers

The international talent marketplace allows your organization to access employees anywhere around the world. However, one concern for both clients and contractors in compliance with local laws and regulations. Meeting these requirements can not always be as straightforward for either entity. 

Consequences for non-compliance actions include either employee complaints or unexpected government audits of the local entity. 

In light of these factors, we have put together a list of the top five most common compliance mistakes to avoid when hiring international contractors. 

1. Misclassification of worker’s employment status 

A common mistake companies make is classifying their employees as independent contractors thus, avoiding the entire burden of meeting employment regulations. For most companies, this usually occurs when first hiring employees abroad and in the initial stages of interaction. When engaging in short-term work projects, this does not present an issue. However, when your contractor is a formal employee under local criteria, you must be aware of the risk of misclassification. 

It is possible to differentiate between a formal employee and an independent contractor. A formal employee is one that is paid a fixed amount at regular intervals, is provided with work equipment, and is often expected to work a set number of hours. The implication is that your company would be expected to provide unpaid benefits, past-due contributions, and potential fines. 

2. Violating the host country’s employment and contract laws

As a foreign employer, it is necessary to understand the in-country regulations as the local employee would be favored in any dispute or claim. Each county has its own employment and labor laws, for example, notice periods for termination, a compliant employment contract, over-restrictive non-competition clauses, and other rules designed to protect employee rights differ from country-to-country. 

3. Statutory entitlements and benefits 

Without being aware of the in-county entitlements and benefits, you cannot make an accurate job offer. Statutory entitlements and benefits differ greatly among countries. Sometimes, these additional requirements can mean a 50% increase in overall compensation costs. Examples of these benefits include health insurance, fully paid maternity leave, vacation leave, or mandatory pension contributions. 

4. Payroll 

Incorrectly running payroll or failing to make required withholdings or contributions can affect the employee’s take-home pay, social security benefits, or pension funds. Misunderstanding the in-county contributions can mean being non-compliant with payroll. 

This issue can be avoided by understanding the in-country contribution list and payslip. However, this process can be complicated and time-consuming. 

5. Immigration and visa requirements

The responsibility of work permits or resident permits falls on the employer. For this reason, it is important to understand if your employees are expats. As the legal employer, you have to ensure you comply with all local immigration rules. This might entail sponsoring their visa with a legal entity in-country, a task better outsourced to a third party. 

Ready to get started?

Sign up for your free demo today!

More from RemotePass

People are talking

Hear what teams love about using RemotePass.

RemotePass has been so efficient for us as we have at least 60% of our team being remote. Especially for tracking if everyone has been paid out or if they have reimbursements, we don't have to manually do it one by one anymore. It's also really good since we are in compliance with each and every single one of our remote teams' place of residence.

Lorena A, HR

RemotePass has enabled Swvl to be more flexible, allowing us to hire the best talent in Remote locations. RemotePass has been a great partner and fast tracking Swvl's growth plans in multiple countries. Special shout out to the support team for the exemplary service.

Faizan M, Global HR

Brilliant service. We love and we'd be using it for the years to come. Also great customer success management as well!

Badr A.  CEO

We love the entire system you guys have built, it's user-friendly and in particular we love the automated notifications part. Employees are automatically informed about the payment status and they receive the payment in a couple of hours after they get notified vs. manually asking us. Thanks for your ongoing support

Muhammed, CFO

The experience with Remote pass and the assistance you have provided with my recent transaction is amazing. I really liked the follow-up nudge and provide me details is super cool. Thanks for your help

Tarun V.

Using RemotePass has been an absolute game-changer for our operations - knowing that we have a reliable partner on our side even in complex regions efficiently (this has previously been a big headache for us), allows our teams to focus exclusively on client service and product delivery

Nina, Associate VP

We were looking for a simple and affordable product and RemotePass more than delivered. RemotePass helped us streamline and manage our remote teams. RemotePass understood us as a company and provided us the support and confidence that we are compliant with regulations, our remote teams have excellent support, and that we made the right choice

Preeta, HR Business Partner

Love it! It has been an essential tool for us, the perks of having everything at the point of my fingers.Using RemotePass has been super efficient. The platform is user-friendly and fast, and communication with customer service is truly a "gold standard".

Iyad A, Head of People

RemotePass has been very helpful as it streamlines the payment process to our consultants, with a simple 2 to 3 clicks the job is done. It is effortless and straightforward to use. The most important thing is that It eliminates any compliance risks we might face, and the lengthy verification process. Overall the system is excellent, and I would recommend it to other organizations.

Rafik, Head of HR

The product has been incredibly a game-changer for us as we scaled our team globally. Creating a great first impression when onboarding remote teams . Everything centralized in one place. Love it!

Roxana L, Chief People Officer

Our work with RemotePass is a partnership based on trust and credibility we are proud to have. With RemotePass services, onboarding and payroll for our global team is well managed and our employees feel safe and cared for.

Fahad A, HR
@Soum KSA

I was instantly impressed with the UI/UX of the RemotePass platform, it is incredibly user-friendly and the feedback I have received from the remote workers has been excellent. Having supplied contract and remote staff to clients in the Middle East for several years, I have been used to a very manual and labor-heavy process when it comes to payroll and compliance. After one demonstration from the team at RemotePass I switched from using an existing supplier, as I get better value and service using this platform.

David S, Practice Lead

Try RemotePass Today!

Join leaders who depend on RemotePass every day to be ahead of the curve.