Hacker News Reader

Comment by sparsely | Hacker News Reader

The payroll, taxes, and labour laws are a big barrier at the moment. Even if you are happy hiring someone as an independent contractor to simplify the first two, how do you know that you aren't breaking local laws, e.g. about disguised employment? You still have to be familiar with local laws and regulations.

It seems like something that an intermediary could help with, and a few do exist, although they are pricey.

Simplification of regulations into a standard framework (without weakening them) would be a huge win here but I can't imagine that happening anytime soon, even in the EU, as labour laws are so sensitive.

View on HN

Those middle-man companies charge extraordinary margins. I don't know whether that is warranted. But you could pay $150/hr and get $15hr developer. Something's wrong with that math. I think that's because of lack of competition, basically they charge as much as possible and pay as little as possible, because they can.

Sounds like an opportunity for a tax-middle-man-as-a-service to disrupt that industry. The uber of outsourcing. I honestly don't know if this is a tongue-in-cheek reply or not.

These are called PEOs, or Professional Employment Organizations.

It is closer to 30% overhead, but much of that is based in providing benefits to the employee outside the country of origin. The cost is also relative to the country.

I suggest that it would be a WeWork/Regus situation. Nothing about WeWork was revolutionary - but if someone had enough buzz and funding they might be able to take over and expand the market.

If you can outcompete local rates by 30%+, why would your employees complain about disguised employment?

Labour laws generally come into play when professions are poorly compensated or mistreated - pampered tech contractors being paid far above local market rate don't really fall into that category.

In Romania ar least, the equivalent of the IRS doesn't like the disguised employment, because it leads to much lower taxes (8% vs 35%). There are around 7 criteria which are used to determine if a relationship is of employment or not. If they say you fulfil enough of those criteria, even if your contract is a freelance contract, you/the employer will have to pay the extra taxes.

The "independent contractor" bit of parent's post is what's relevant here.

In the UK the Government has clamped down on freelancing by saying, simplified grossly, if you look and act like an employee, but claim to be an independent contractor using alternative and often more favourable remuneration strategies, then you'll be firmly disagreed with and instead you'll be considered an employee.

The Govt considers this "disguised employment", not the freelancer.

More on this: https://www.gov.uk/guidance/understanding-off-payroll-workin...

But it's the key point parent is making - you need to know about this stuff for bringing in freelance talent in/from the UK. Not least because as a hirer/commissioning party the UK Govt will come after you if you have got it wrong!

Reply on news.ycombinator.com