[killion]

Some states have worker’s compensation monopolies so you have to buy it from the state.

All states require that you register as a company there and pay taxes.

There are PEOs like Justworks that act as the employer and file taxes for you. But you still have to register first and then assign the company to the PEO.

In short it varies a lot and that doesn’t take into account things like local laws on compensation.

I say this as a founder of a remote-first startup registered in 12 states.

[rubber_duck]

What's the situation like if your employee opens a company and invoices you like a consultant ? I do this in Europe (admittedly I don't work for a single client exclusively) but it seems like the path with least friction for tech workers.

[killion]

In that case it's very simple for the company paying but much more work for the employee since they are the ones responsible for taxes. It's not necessarily a bad thing, but I've found many employees don't want to do it. They need to make sure they are either paying their estimated taxes quarterly or be saving a significant portion of their income.

That also doesn't address that it is significantly cheaper for group health insurance in the US vs. individual. As a company I can be paying $400/mo vs. the employee who would be paying $2K for similar coverage.

[not_a_moth]

Interesting not what I'd expect with a PEO. Any sense on whether JustWorks requirement is because of law or because is best for JustWorks?

[chrischen]

It’s because of laws. PEO handles some things but states being what they are have exceptions.

It’s unfortunate because this system encourages hiring remote offshore contractors.

[killion]

Yeah, I was surprised when I found out this is how it works. When I first signed up with a PEO I assumed it was all taken care of. But then they handed me a big list of states I needed to register with and all the very antiquated processes each of them uses.