Legal Challenges of Remote Hiring
1. Interview discrimination
2. Equal opportunity and affirmative action laws
3. Know the international employment laws
4. Non-compete and confidentiality agreements
5. Privacy and security issues
6. Payroll issues
One of the biggest legal challenges of remote hiring is payroll. In fact, it’s such a big deal that it’s actually one of the most heavily regulated parts of your business.
First, you have to understand how international employment laws apply to you. Different countries have different laws about employee pay and benefits. Some countries have minimum wage laws in place, while others don’t. Some countries have overtime pay or holiday pay laws, while others don’t. The only way to know precisely what these rules are is by checking with your local labor board or government agency in charge of employment law in your area.
Next, you must ensure that your employees are paid on time and full every time they work for you. If they’re not getting paid correctly (or at all), they can file a complaint against you with their local labor board or government agency—and those complaints aren’t cheap! They can also get into trouble with their government agencies because they’re not reporting accurate information on their taxes—and if they do this often enough (or if there’s some other reason why fraud might be suspected), then suddenly federal agents will start investigating them as well.
7. Watch out for the work environment
8. Tax implications
Tax implications can be a huge problem when hiring remote workers. If you do not pay your remote employees correctly, you can face huge fines from the IRS. The first thing to consider is whether or not the person you are hiring is an employee or an independent contractor. If they are employees, you will need to withhold taxes from their paycheck and make sure they file their own taxes at the end of the year. If they are independent contractors, they will be responsible for filing their own taxes at the end of the year.
If you are unsure how to classify a worker as either an employee or an independent contractor, then it’s best to consult with a tax professional before proceeding with your hiring process.
The legal hurdles remote job applicants must clear are by no means insurmountable; remote hiring is on the rise, and employers’ outlook for success is positive. Still, a variety of legal issues may arise in this kind of hiring environment that could affect employers or employees adversely—and, even though most of these cases prove to be grist for the mill rather than full-fledged legal challenges, employers would do well to understand how such a hiring model could affect their business.