How should I pay a remote employee who moves abroad by choice?

People are leaving. 

I’ve seen an increasing number of questions about what to do when an employee moves abroad.

Not because the company is opening an office in London or a factory in Shandong,

but because their tía Sofía is getting older and needs more help around the house,

or because their partner found a job in Munich,

or because Thailand seems pretty cool,

or... you know... [waves hands]... that whole thing that’s happening lately.

So, what do you do if your company accommodates remote work and one of your employees emigrates? Voluntarily?

You have two choices:

1. They become a contractor

2. Hire an employer of record (EOR)

Normally I take a dim view when a company pays its international team as contractors to avoid paying taxes and following laws about workers’ rights. 

But in cases where a US employee moves overseas by choice, I don’t mind suggesting to someone that they should consider a contract position. 

As a contractor, they can:

⌚️Determine their own work hours (critical when you’re 5+ time zones away and observing different holidays)

⭐️ Be held to a different standard of performance, based more on results than routines

💼 Take on other work and side hustles 

💸 Pay for their own taxes and benefits (which is usually a bummer, but some people are less bothered about it than others)

The alternative, an EOR, is an imperfect solution. They cost a lot (but not as much as you think when considering total employment costs) and don’t give a great employee experience. 

Pay is slow. Benefit options are limited. You’re working through a system you barely understand with a customer service person equipped with little more than a script.

But EORs let you:

⏱️ Manage the person’s schedule and performance

⭐️ Hold them to the same standards as other employees

💴 Pay a regular rate in the local currency

🧑🏻‍⚖️ Follow all of the local laws and regulations so you don’t get in trouble

❤️‍🩹 Offer the benefits standard in that country

The EOR space has changed a lot in the past decade or so. I haven’t used all of the new ones, but I also haven’t found the services to be all that differentiated.

🦪 Oyster is the most responsible one I’ve used.

😬 Remote is a grab-bag. Great people, but they’ve cut some corners.

😧 Deel is a disaster waiting to happen.

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