It works both ways. If I can work from anywhere, the employees can also be from anywhere. This is a good way to hire third world employees without bringing them in the country.
I suspect that may have been partly the intent when corporations created remote work.
it works both ways for some jobs - definitely not for all of them. You are simply not going to get 3rd world employees for what I do. It requires knowledge of US banking regulations, standards in the banking industry, etc. There are other jobs like that. The 3rd world can provide cheap low skilled labor. They can't provide highly educated or experienced workers to replace Americans.
I suspect that may have been partly the intent when corporations created remote work.
That’s not how it works however. At least not legally.
For one thing, If I hire a remote worker, working remotely in another country, I can’t pay them from my US payroll. And paying them as an “independent contractor” via an AP check or wire transfer has the same issues legally as trying to do the same for a US employee. If they are an employee, you can’t legally pay them as if they are a vendor or independent contractor.
But it does create what is called Nexis, and the same applies to hiring workers in other states where my company does not have a physical presence, i.e. a brick-and-mortar location.
I used to have to deal with this all the time previously, especially with outside salespeople hired and working in states where we had no previous liability or any physical office. It required me to apply to that state for tax withholding and unemployment accounts and triggered other things like sales tax and corporate returns and workers compensation accounts in some states. The employee’s home address now became our physical business address in that state.
But the sudden increase in remote workers during COVID created nightmares for us in payroll because of this. And more so in states like Pennsylvania and Ohio and other states that have local and local school taxes.
In PA because of local taxes for example, remote workers in PA, even though we had an office in PA, caused us to apply for withholding accounts in pretty much all the local jurisdictions where employees were working from home as work locations.
If I hire and have a remote worker living and working in another state or in another country, I’ve just created a remote office location, a physical business location/presence even if I don’t have a brick-and-mortar location there. So, I have to set up for withholding the remote location’s taxes and follow the remote location’s employment rules, including things like minim wage regs if higher than the federal and rules around paying employees at termination.
There are some circumstances where a US company has a worker, whether a US citizen or a non-US citizen living and working in another country, in which case they often utilize a PEO (professional employer organization) in order to pay the employee, withhold and pay the appropriate taxes and benefits and other compliance issues local to where the employee lives and works.
At my last job we had both US and Canadian locations and separate payrolls for US and Canadian employees.
But a manager hired a Canadian employee and assigned him to one of our US office locations. The employee was going to eventually relocate to the US but at the time he was hired, did not have a US work visa and he was living in and working remotely from Canada.
We had to push back and tell the manager and the employee he could not be paid from the US payroll and had to be temporarily assigned to one of our Canadian locations and paid from the Canadian Payroll. And this created some problems with things like assigning him to a US manager as a Canadian employee in the HRIS system… other issues too, lots of work arounds involved.
And our accounting department wasn’t all too happy because they had to make intercompany journal entries to move the wage and tax expenses and liabilities from the Canadian business entity to the US business entity but there was no other way around it.
We had another Canadian employee hired to a US location who had a US work permit/visa and a temporary US address (a hotel) until he got a permanent US address, but he only had a Canadian bank account.
But we could not pay him from our US payroll via direct deposit as it did not allow for direct deposits to any foreign bank accounts. We could process a paper (live) check in USD and mail it to him at his temporary US address, but without any US bank account, he may not have been able to cash it anywhere and depositing a US check to his existing Canadian bank account was problematic as he’d have to travel back to Canada to deposit in person and there would be a substantial delay before the funds were available.
I spent several hours on the phone with him and his manager explaining the problem and the employee was able to open a US bank account very soon after.
Employees are well aware that any job that could have been outsourced overseas already has been.