The future of work is remote. Though the number of remote workers has shrunk since pandemic highs, roughly 27% of the U.S. workforce still works remotely at least some of the time. This cultural shift has allowed HR departments to expand the hiring pool beyond their local market. Now, you can tap the best talent around the globe—not just the best talent within a 50 mile radius.
Despite the benefits, global compliance is a challenge when hiring remote employees worldwide. Compensation standards, culture, and compliance practices differ from country to country. According to Atlas’ 2023 Global HR Study, 63% of decision makers have trouble keeping track of changing regulations across multiple jurisdictions. While an Employer of Record (EOR) can help streamline HR functions and offer local expertise, there are other nuances to keep in mind.
Why Hire Remote Employees to Stay Ahead of the Competition?
Remote work does more than just widen the talent pool. Numerous studies have found that remote employees have higher levels of performance. For example, a University of Chicago study found that remote workers dedicate 40% of the time they would have spent commuting to work, instead. Separate research from the University of Chicago found that remote productivity was 7% higher than in-office productivity. These studies are not unique. Remote workers are often more dedicated, productive workers.
The Importance of Global Compliance for Remote Workers
Global compliance is essential with increasingly complex and diverse workforces across different regions. It doesn’t just mitigate legal risks involving international labor laws, taxes, and employment regulations. It also helps build a better workplace culture, fostering fair and consistent policies that build employee trust and help attract and retain top talent.
According to a 2023 trend report from cloud-compliance company Drata, 87% of organisations report negative outcomes from low compliance. This includes slower sales cycles, security issues, and fines. It could also lead to lawsuits.
Statistics compiled by Jury Verdict Research show a 400% increase in employment-related lawsuits over the last 20 years. That’s no small number, especially when you consider that Atlas’ 2023 Global HR study found that companies aren’t aware of about a third of the regulatory landscapes in the regions they operate, and 25% of companies rarely or never seek outside legal counsel to help them remain compliant.
Luckily, there are some best practices you can follow to hire and pay remote employees while maintaining compliance, no matter the location.
How to Keep Up With the Best Global Compliance Practices
1. Attract Talent With Fair and Consistent Payroll Benefits
The best way to attract top talent is to offer a competitive compensation package. With a global workforce, this requires country-specific—and even city-specific—knowledge. Some areas have a higher cost of living. In other areas, employees may culturally expect certain benefits beyond basic legal requirements. An Employer of Record (EOR) can act as your expert on the ground.
At the end of the day, employees want to feel valued and have the opportunity to advance their career. While competitive compensation opens the door, maintaining consistent and equitable compensation across skill levels and locations can foster a workplace culture that retains talent.
2. Bring In the Experts
Hiring remote employees worldwide requires a comprehensive understanding of labor laws in different countries—but it doesn’t end there. HR departments must manage numerous regulations ranging from payroll and taxes to data security and privacy, ensuring that all contracts and practices remain compliant.
This is where it’s a good idea to partner with a legal expert who understands the nuances of international employment law. An EOR can help streamline the process so you don’t need to hire an expert (or become an expert) in each country of operation.
3. Establish Clear Remote Work Policies
With employees out of the office, the lines of work-life balance can blur. Research has overwhelmingly shown that remote employees are more productive, but if you want those employees, it’s a two-way street.
According to Slack’s Future Forum 2022 survey, 40% of employees are experiencing burnout. While workloads do vary between projects, it’s important to be upfront about expectations and responsibilities to preserve your positive workplace culture.
This is where a comprehensive remote work policy comes in. Make sure you outline the expectations, compliance requirements, and guidelines for every remote worker in your organisation—including country-specific legal and regulatory concerns. Cover all your bases so nobody feels cheated.
4. Tailor Your Employment Contracts
Blanket employment contracts won’t work with a global workforce since regulations differ across jurisdictions. To ensure global compliance, you must tailor your contracts to local laws. This includes oft-forgotten clauses regarding:
Misclassification is another hot-button topic. According to a National Employment Law Project analysis, 10% to 30% of employers misclassify workers as independent contractors, which has serious legal ramifications.
5. Get Real-Time Compliance Updates
Companies with continuous compliance tend to have better outcomes than those that use a reactive or manual approach. For this reason, it’s important to get real-time updates about global compliance practices. When regulations change, you’ll be the first to know.
The simplest method is to use an Employer of Record (EOR). For example, Atlas has a team of experts clients can reach out to with questions about salary ranges, local laws, and on-boarding speeds.
6. Invest in Training
Offer remote employees training and resources to help them understand and comply with local laws and regulations. Most HR departments already keep health and safety training in mind, but issues like data protection can fly under the radar while employees pass personal information across borders. For example, employees may not have awareness of Europe’s General Data Protection Regulation (GDPR) and the Privacy Shield framework in the United States.
7. Keep the Lines of Communication Open
Employees are sometimes the first flags of workplace issues regarding legal compliance. For this reason, it’s important to maintain open lines of communication. Allow workers to address their concerns, ask questions, and provide support when needed. This also helps create a positive work environment that attracts remote workers, who can often feel disconnected so far from the office.
In this instance, a direct EOR model can help. Rather than battling time zones through a clunky chain of command that involves numerous third parties, a direct EOR provider like Atlas has a business entity within the country where your employees are hired. This allows for quick answers and prompt support.
8. Conduct Regular Compliance Audits
Regular compliance audits can assess whether your organisation is adhering to local and international regulations. This will help you identify gaps in compliance and take corrective actions.
9. Maintain Thorough Records
If issues do arise, it’s important to have solid records that prove your compliance. Keep detailed documentation—from tax records and employment contracts to things as seemingly innocuous as performance reviews.
Bottom Line
Global compliance is essential for remote workers, but it’s far from simple—especially in a world where 81% of HR professionals feel burned out. If your organisation could use more hands on deck as it enters the global workforce, an employer of record can mitigate compliance risks, help you find the best remote talent, and free up your HR department so they can perform other essential duties.
Want to hire the best global workforce without sweating over compliance-related issues? Contact Atlas to learn how an EOR can help.
