most countries have some kind of "small business" type entity that the employee can create and you are left to deal with Data protection only. It's a B2B relationship.
It's true, and that's how many companies do it. But in fact it is illegal to hire a person as a contractor when they are de facto an employee in many countries...
In my understanding, it's not that it's illegal to hire a person as a contractor, it's just that it can be re-qualified by a judge as an employee, if some working conditions are met.
For example in France, which is known for its labor code that protects employees much better than other countries, here are some conditions that can lead to this:
- Proven relationship of subordination
- The contractor is only working for your company
- Poorly written contract (specifically, obligation of means vs obligation of results)
Sham contracting is indeed illegal in the criminal sense in some countries. Either outright, or by consequences like failure to withhold tax according to law, or otherwise evading the burdens of employment law, if the facts indicate that was your intent.
only if the company in question has a legal presence in the country and is actually able to hire you as an employee. barring that, for international remote work, freelance or contracting is the only possible arrangement (aside from using some local service company that hires and then resells your work, or some treaties between the two countries to handle cross-country employment (like all EU countries))
In France you can't hire somebody as a Freelance if you are actually his/her only client, the regulators will say you have too much power over that freelance and that she/he should be re-qualified as an employee.
I think we had similar rules and then they relaxed the rules in my country. It's a points rule I believe: if you have more than x criteria (you work at your location, you use your own equipment, you have more than one client and so on) then you are a "company" otherwise you are a employee.
Comments
most countries have some kind of "small business" type entity that the employee can create and you are left to deal with Data protection only. It's a B2B relationship.
It's true, and that's how many companies do it. But in fact it is illegal to hire a person as a contractor when they are de facto an employee in many countries...
In my understanding, it's not that it's illegal to hire a person as a contractor, it's just that it can be re-qualified by a judge as an employee, if some working conditions are met.
For example in France, which is known for its labor code that protects employees much better than other countries, here are some conditions that can lead to this: - Proven relationship of subordination - The contractor is only working for your company - Poorly written contract (specifically, obligation of means vs obligation of results)
Sham contracting is indeed illegal in the criminal sense in some countries. Either outright, or by consequences like failure to withhold tax according to law, or otherwise evading the burdens of employment law, if the facts indicate that was your intent.
only if the company in question has a legal presence in the country and is actually able to hire you as an employee. barring that, for international remote work, freelance or contracting is the only possible arrangement (aside from using some local service company that hires and then resells your work, or some treaties between the two countries to handle cross-country employment (like all EU countries))
yes, the rules are different from country to country. Worth looking into it.
Sure but that's hiring contractors and wasn't how I read the question.
But this is probably the solution, until international laws are more unified/interoperable.
In France you can't hire somebody as a Freelance if you are actually his/her only client, the regulators will say you have too much power over that freelance and that she/he should be re-qualified as an employee.
I think we had similar rules and then they relaxed the rules in my country. It's a points rule I believe: if you have more than x criteria (you work at your location, you use your own equipment, you have more than one client and so on) then you are a "company" otherwise you are a employee.