Downloadable Template: Convert Contractors to Full-Time Employees Policy

Hiring employees requires businesses to comply with local labor laws that define employee obligations, rights, and protections. These laws vary by location, as different countries have different employment contract requirements, minimum wages, employment taxes, and other regulations to comply with.

When onboarding international employees, you must make sure they have access to statutory employee benefits, such as healthcare, vacation pay, retirement plans, and more, depending on their country of residence

Companies that want to hire employees in compliance with local laws in countries where they don’t own an entity often choose employer of record services. EORs are organizations that act as middlemen between client companies and international employees, taking complete legal responsibility for the employee and covering the following:

• Creation of locally compliant contracts
• New employee onboarding
• Salary payments
• Benefits administration
• Tax filing
• Payslip distribution
• Contract termination, and much more.

Some EORs, like Deel, can help manage workers even if they don’t have an employee status. You can also use our comprehensive contractor product to attract, hire, manage, and pay independent contractors in over 150 countries, while providing them with perks such as Deel Card to make sure they stay.

Yes, US-based companies can hire foreign independent contractors and pay them using a plethora of methods, including hiring them through an employer of record.

While using contractor agreement templates can work well to a certain extent, it’s always better to use a tailored contract in compliance with local employment laws to make sure your contractor isn’t misclassified and doesn’t represent a liability for your company. It’s also important to provide the correct IRS tax forms to your foreign contractors, such as Form W-8BEN.

If tax authorities determine you’ve misclassified an employee as an independent contractor, you may face a range of penalties, from tax and federal law violation fines to harmed business reputation to jail time, depending on whether the tax authorities determine you’ve misclassified the workers knowingly or not.

Deel offers a special product for companies that want an additional protection layer when it comes to avoiding misclassification risks: Deel Shield. If you opt for Deel Shield, we assess the correct classification of your workforce and advise you on whether the worker should be a contractor or an employee.

Then, we handle hiring and HR admin on your behalf, create locally compliant contracts and collect all necessary documentation. Once set up, the client and contractor can access one platform to manage documentation, time off, payment approvals, and more.

Through Deel Shield, Deel uses expertly designed worker classification tools and the help of 200+ local legal experts to continually review, correctly classify, and hire contractors on your behalf based on location, job description, and work setup. Even if misclassification occurs, Deel accepts legal liability.