If so, does anyone know the specifics? Is it different tax stuff, difficulty with sending payments, legal requirements, etc?
Many American companies are using it to hire talent from abroad. It's good because you can hire talent from Europe paying typically 50%-70% of US dev salaries, they speak English and have similar culture and expectations. Furthermore, the salary that American companies tend to offer makes it very attractive as well, in comparison to their local markets.
Employee of record companies: Remote.com, Deel.com
Related question: I'm a US/EU dual citizen resident in the EU. As a software consultant, can I set up a Delaware LLC, bill through that, and handle all the EU weirdness on my end to insulate my end customer from having to worry about it? or are there unavoidable hassles my end customer would likely have to put up with?
The cost of working out each country's requirements is significant enough that it's often a lot cheaper to use an employer of record service instead of setting up your own entity.
After a while you realize, that you want to hire sales people to go after local markets. Local companies like contracts with local entities.
So you now create a local entity to hire your sales people, and do your contracts. Your contractor also will be employed by the new entity.
Boom: Suddenly the government wants to have social contributions for the past X years, because they argue that the contractor was faux-contracting and should have been employed.
This is the risk these employer of record services cover for you.
In your example, I don't doubt some government official would claim that. But the company didn't exist so what gives? EU law has a way to apply internationally it seems.
The time zone difference is not a major problem for us, and I am in PST (the US part of my company is mostly EST & CST). There is a large actual time zone difference with Brazil, but all of our contractors tend to be night owls (we are clear about where we are, if they weren't at least slightly night owls, they wouldn't choose to work with us). If you keep core working hours in US EST, you hopefully have morning larks among your Washington state employees as well to make it easier.
Things also depend on the specific foreign country, and what other business your company wishes to transact in that country. My company has (I believe) direct employees in many jurisdictions, including in Europe. But for Latin America, I believe (almost) everything is through Remotely.
- Language
- Cultural differences, including things like time off, work hours
- Timezone differences causing large delays in communication
On top of those issues, employers who haven’t hired internationally may worry about tax and legal implications. The potential employee may have those concerns too, and expect the employer to deal with all of it.
While straightforward solutions like B2B contracting (described in other comments) simplify the tax and legal issues at the US end (but maybe not at the other end), international hiring is a novelty for many employers, so they may avoid it out of worry and ignorance, or cultural bias.
Language, you're supposedly filtering for that in your hiring process but I understand it might be extra work (in the initial screening phase).
It seems everything you listed would be up to the company to decide (compared to hard requirements around legal/tax issues -- are there any that you know of?).
My question is more about stuff that would be a burden or even prevent that type of hiring even if the company is already 100% remote.
I'm trying to understand the multitude of "Remote US" job posts.
Plenty of employers believe foreign employees, or American employees working from abroad, create complicated tax and legal problems for the employer. Sometimes that's true, sometimes not, and usually they could find a solution if sufficiently motivated. But even so it's a lot to ask an employer, to create a special case or do the research, when they think they can just as easily get someone without those possible problems. Ask your employer to pay you through PayPal or in Bitcoin and you'll see what I mean -- it's not a matter of possibility or legality, just that you create a bureaucratic exception that someone has to handle.
So based on some real, some imaginary, and mostly solvable problems that nonetheless look like risk, hassle, and exceptions to standard process, employers choose what looks like the easy and safe route.
Where I'm from they're called InvestNI and they've helped multiple US companies set up locally.
It's an expensive undertaking but worthwhile if you're looking to hire multiple people. The hassle is offset by support and funding to help subsidise the cost of providing jobs.
Quite a few companies exist to provide these services, known as "umbrella" companies. For a monthly fee you are a regular "employee" of their local company, and the invoice to your client is paid to the umbrella company directly.