Hiring workers from overseas allows your company to tap into a deep talent pool and benefit from the experience and skills of people from all over the world. Working with freelancers, in particular, allows you to benefit from their specialized skills and expertise without hiring full-time employees.
Freelancers are ideal when you have specific projects or tasks that require expertise you don’t have in-house. Whether you work with international freelancers on a short-term basis or add them to a pool of contractors you call on regularly, keeping a few essential tips in mind supports stronger working relationships and prevents some of the legal pitfalls that can arise.
4 tips for working with international freelancers
1. Be wary of misclassification
Correctly classifying workers is critical to avoiding lawsuits, fines, and other sanctions. To classify someone as a freelancer, their working arrangements must meet certain qualifications. For example, freelancers are free to set their hours and rates and turn down projects.
In the U.S., for instance, freelancers are classified as 1099 independent contractors and shoulder the responsibility of filing and paying their own taxes. If you hire a freelancer from overseas, they may be classified as such under U.S. law, but their home country may have additional requirements or guidelines for classification.
To avoid the consequences of noncompliance, use Oyster’s misclassification tool to ensure that there’s no risk of the freelancer being misclassified in their own country. By answering a series of questions about the contractor and the work they’ll be doing for you, you’ll get insight into whether you can classify an individual as a freelancer or if they’re actually an employee. Understanding the risk for misclassification can help you avoid costly mistakes.
2. Understand time zone differences
Working with freelancers worldwide makes time zone awareness critical. A meeting scheduled for 2 p.m. New York time, for example, is at 6 p.m. in London and 7 p.m. in Munich. By the same token, a Chicago freelancer working for a U.K. firm would have to be awake at 2 a.m. to attend a meeting at 8 a.m. London time.
Acknowledging time zone differences is important when scheduling meetings, conference calls, and deadlines. It also means understanding that messages sent during regular working hours for you might arrive well into the evening—or even overnight—for the other person, and you’ll have to wait for a response. Respecting time zones can foster better relationships and prevent misunderstandings. To work out the best way to collaborate, use Oyster’s time zone crossover calculator.
3. Make sure your contract is compliant
Every country has unique employment laws to govern freelance contracts. Well-drafted contracts help establish expectations regarding services, communication, and pay, which can prevent miscommunication stemming from language and cultural differences. It’s critical to state that the freelancer has total freedom in completing their work and to outline their responsibilities, so it’s clear that they’re a freelancer, not an employee.
A compliant contract adheres to both your own country’s laws and those of the freelancer’s country. It’s also important to include clauses detailing the procedure in the event of a dispute that involves local laws in both countries.
Working with a local legal expert with experience in international freelance contracts can help you draft compliant contracts and avoid conflict. Oyster can help!
4. Ensure timely and compliant pay
Pay is another critical element to include in a freelance contract. At a minimum, the contract must define the pay rate, payment terms (including the payment currency), and legal jurisdiction. The designated jurisdiction establishes where disputes can be filed. The contract can designate one country as the jurisdiction or allow either party to file suit in their own country.
Once you establish the payment terms, you need to pay freelancers in a timely and compliant manner. You’ll have to follow your own local laws regarding whether to withhold, pay, or report taxes for foreign freelancers. And you have to pay freelancers in accordance with the contract and the local laws in their country. You also need to be prepared to provide payment details so that they can pay their local taxes.
Choosing the best payment method is also important. For example, wire or bank transfers are common, but they can come with extra fees, and the exchange rate isn’t always favorable. Talk to Oyster about simple, streamlined, and compliant global payroll services that pay your freelancers on time and in their preferred currency.
Expanding your team to include freelancers from around the globe can help your company reach its goals—and it doesn’t have to be complicated. Get in touch with Oyster today to learn more about how we make it simple to tap into worldwide talent.
Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.