Independent Contractors Abroad

HRDir1

OK - here is a question for this new global forum group -- if we contract with individuals in various countries (e.g., India and Pakistan) for programming jobs, do we need to consider each individual country's laws regarding the status of an independent contractor vs. an employee, taxes, etc ? Do U.S. law apply to any of these relationships? We are new to this and want to figure out how much we are opening ourselves up to if we go abroad with our programming projects.

 Thanks for any help!

TXHRGuy

Are you contracting with individuals or with organizations?  If you are contracting with individuals, you will need to meet the IRS requirements at the very least.  Keep in mind that there are other standards imposed by courts that further cloud the matter.  If you are contracting with businesses, and the contract is like any other B2B contract, then you don't have any issues.  It wouldn't hurt to get a copy of their equivalent of articles of incorporation to ensure that you are contracting with a bona fide business.

It never hurts to get references from US clients as part of your due dilligence.

HRDir1

Thanks - the people we are considering (so far) are individuals who work out of their homes in their country(ies) -- we are considering them based on business references from a U.S.-based company. We also have talked to a business vendor in India that does the same work (so that would be B2B).

TXHRGuy

B2B is always cleaner because you don't have the burden of understanding anything about their requirements to manage their employees.

The IRS test should be your only major hurdle.  An hour of lawyer time wouldn't hurt just to make sure you have no other entanglements.