[notpushkin]

> This is then why we often see "remote" coming with all kinds of conditions like US remote or EU remote etc because the reality of legal compliance for HR is a huge headache.

Could they just hire those individuals as contractors instead? It should be up to the contractor to ensure compliance then. (IANAL)

[michaelt]

First of all, that's complicated and employees can easily fuck it up.

I once worked at a tiny company, and their first 'contractor' employee didn't realise he had to set aside money for certain taxes, and didn't realise he'd have to record certain details to be able to fill out certain forms, and things like that.

This ended up being a bunch of hassle for the company as he... thought? hoped? expected? that they were paying those taxes, as they would have done if he was a regular employee. Now the guy's resentful, feels you've ripped him off, and is constantly distracted.

Secondly, there can still be local laws you have to comply with. Some countries have problems with sham contractor arrangements, where they insist their normal, regular employees are 'self-employed contractors' to avoid giving them sick pay, holiday, pension, maternity leave, minimum wage, redundancy pay, complying with safety rules, and so on. So they have laws saying that under certain circumstances, contractors effectively turn into regular employees.

As I can't read Kazakh, how am I supposed to know if the Kazakhstani tax code has similar rules?

[notpushkin]

> I once worked at a tiny company, and their first 'contractor' employee didn't realise he had to set aside money for certain taxes

It's a valid concern. Should be easy to solve though: add a reminder to the employee handbook, and also remind them to check out local tax codes and set aside money.

> Some countries have problems with sham contractor arrangements

This usually doesn't apply to cross-border relationships though (which we implicitly focus on here I think, given this is a thread about moving to Japan). It is possible in theory, of course, for tax authorities to go after international contractors clayming they are international employees, but I haven't heard about such cases yet.

But there's an easy way to distinguish employment and contractor relationships: if you set a specific goal and a deadline, and do not tell them how to do the job, you have a contractor. (The goal does have to be specific, though, but you can say in your contract that you will use Jira tickets for that, I believe.)

I think that overlaps pretty well with most remote work. Specifics might differ, but as a general rule this is it what tax authorities pretty much everywhere will look for.

Disclaimer: I'm not a lawyer nor a tax advisor, just doing a lot of freelance and run an Estonian LLC for fun

[djtango]

Some do but from observation lawyers/HR find reasons to resist this.

The most likely explanation is there could be risk but there is zero risk associated with saying no so legal and HR say no to this arrangement because they don't want more work and legal and HR are cost centres so they can't magically pull budget out of thin air to appease some annoying digital nomads. A company is also not going to let their entire workforce of full time employees transition to contractors overnight either, which would be a giant headache for both HR and senior management.

For example VCs prefer "headcount" over contractors for a number of reasons so there is pressure from the top to incentivise full time employees. Large multinationals have a lot of considerations around taxation (its always taxes...)

These are some of the practicalities I've uncovered that provide inertia towards remote working

[notpushkin]

Makes sense, thanks!

> A company is also not going to let their entire workforce of full time employees transition to contractors overnight either

This could actually look like tax evasion (in countries with lower taxes for sole proprietors / self-employed people), so not a great idea in any case.

[jalapenos]

Long story short, it's a complete quagmire, especially since you're bringing cross-border tax issues into play.

A small company that doesn't know much about compliance may be happy to call it "freelance", but any bigger company with a professional HR person is going to balk at it, because they want certainty they're compliant, e.g. no misclassification.

They're much more likely to be happy about it if you can stick a local LLC between you and them though.

[Ekaros]

Well whole contractor status is very murky in many places. Either very strict like in UK. Or then you need all sorts of agreements in between, meaning that you might need to give cut to some third company. And then those companies have same problems.

Even inside EU with freedom of movement spending more than 180 days in single country can lead to tax implications. Doing this globally is even bigger mess as ways of counting time might not be the same.

[notpushkin]

> Or then you need all sorts of agreements in between, meaning that you might need to give cut to some third company. And then those companies have same problems.

It could be a viable solution actually. There’s a bunch of companies that can both employ or subcontract a person on behalf of another company.

I think if the company is not against it in principle, it becomes just another negotiation point, e.g. you can agree to a lower net salary so that the gross amount the company has to pay is the same (including the middleman fee).