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Comment by earlyresort | Hacker News Reader

I've got a question for DHH - or really, anyone with a widely-distributed team: how do you deal with the administrative overhead of hiring employees in a lot of different jurisdictions?

I've used Ambrose in the past, and they could handle the administrivia associated with employees in most American states, but they were no use internationally. And 'professional employer organizations' like Ambrose often only work with organizations that are already doing well (or well-funded).

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We have Paychex handle everyone in the US and everyone outside the US work as contractors. You have to observe the local rules about who can be a contractor, but it works well for people with self-directed work, like programmers, designers, ops people. Less so for, say, assistants.

It's not nearly as hard as it appears.

When I've had to handle a large, distributed and international team I mainly just had almost everyone on as a contractor. This wasn't us trying to deprive them of benefits or underpay them, but really was what most of them wanted. They wanted flexibility and the ability to work in a somewhat non-dedicated way. Worked for everyone involved since the paperwork was really minimal.

Be careful doing this, as there are official rules whether someone is a contractor or not, not just 'because I call myself one'. You can in theory get hit for payroll taxes.

http://www.irs.gov/businesses/small/article/0,,id=99921,00.h...

I actually really like this set of rules. It keeps nit-wit bosses from calling you a contractor and then micromanaging you like an employee. On the balance they favor those who really do want to be contractors.

If you want to be a contractor and you do the same work as a regular employee and that company is your only client, you're going to have a hard time defending that you're actually a contractor. MA doesn't allow that, for instance. It's not just about how you're treated -- it's very much about the nature of your work.

I'm not sure this applies for international contractors though but the same applies for the european countries and it's harsher. In Spain if you have worked for more than 6 months on a contract for 1 employer you are considered an employee.

It comes down to social security payments :). A contractor pays less than a full-time one and the government looks upon contracting like this as a way of dodging paying the correct social security for an employee.

Leads to a horrible environment where people get fired every 6 months and then recontracted under another work title.

As an international contractor you are best to set yourself up as a company or self-trader and invoice appropriately. You should then be subject to normal international outsourcing behaviour in regards to the paying company's tax.

Right, for us 90% of these people were in europe/south america, and the remainder were definitely working on multiple projects/clients and had businesses setup that they did their contracting through.

Contracting instead of hiring is a decent workaround in my opinion. A lot of great people who work from remote are already full-time or part-time freelancers and are totally open to long-term engagements. It's as simple as sending an invoice by the employee/freelancer and sending a check or wire transfer back.

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