Are you in the process of hiring? Then you can use any one of our remote work agreement templates. Just edit them a little bit so they’ll match your business.
Remote work agreements need to be crafted carefully as they are legally binding. A poorly drafted remote work contract could lead to potential legal trouble if there are enough loopholes and sloppy or contradicting policies contained. To avoid that, read on.
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A remote work agreement or contract is a document that details a work arrangement between an employer/company and a remote worker, who are authorized to work in locations other than company premises. A remote work agreement outlines the duties, requirements, collaboration tools, and work processes of a remote employee, as well as their working hours, payment schedule, and other relevant sections that would adequately cover their needs.
This type of contract is usually prepared by an employer or the assigned assistant to be read and signed by both the employer and remote worker.
Hiring remote adds a layer of complexity to your employment process since you will have to abide by laws that might be different from your area. Let’s explore some examples.
A non-compete, which is basically a component for most employment contracts that forbids an employee from working with an employer’s competitors, is one of the first considerations when hiring remote since the laws governing it varies depending on the remote worker’s location. In the US, it even varies by state.
For instance, California absolutely forbids the enforcement of any form of non-compete towards employees while the New York tribunal may offer some leeway as long as you can provide proof that the absence of a non-compete clause in your contract could cause irreparable damage to you or your business.
Another important factor to consider is the minimum wage according to both federal and state laws. Failure to comply could lead to a civil money penalty of up to $1,000 per violation. In the UK, it could go as high as £20,000 per worker and could get you prohibited from being a company director for several years (15 max).
There are a few ways to avoid remote work legal issues, which we listed three. This list is by no means extensive. We recommend that you seek an expert’s counsel before making any concrete decisions.
You could avoid a lot of hassle and save enormous payroll costs if you simply opt to set up your remote workers as independent contractors instead of regular employees. Most areas obligate independent contractors to withhold and pay their own taxes. This means that you can avoid unemployment tax, paying employee benefits, and other obligations. But please note that you will have less control with contractors than with regular employees.
As an employer, it’s in your best interest to hire workers from locations with low tax requirements, reasonable labor laws, low cost of living, and easy tax registration processes. In the US, states like Hawaii, South Dakota, and Wisconsin offer the most seamless tax registration process. We generally recommend consulting a tax expert if you live in nations with tight remote work laws like the US and UK.
But if you opt to outsource to remote workers from India or the Philippines, their laws are quite friendly, which explains why they have become popular destinations for offshore labor.
Each region has different labor laws, some of which make tax registration easy. Others, well, not so much. And running a business is tough enough without the added burden of navigating through remote work regulations in 10 different states. As much as possible, stick to having remote workers in 1-3 different locations so you’ll have fewer compliance headaches. For instance, if you need 10 remote workers, you can opt to have 4 from the US and 6 from the Philippines.
If you want most of the headaches to disappear completely then your best bet is to hire a professional agency to face all compliance obligations and worry only about the pay. On top of that, an agency will do all the end-to-end management for you, from recruitment to payroll to contract management. If you want to go down this route, we have a blog post on the top virtual assistant services.
First, you need to make some edits to make sure that the details are in line with your business goals and don’t violate any state or national laws in your area. For your own security, I highly recommend that you show your final draft to a legal consultant who has expertise in your employee’s jurisdiction.
I highly recommend that you hire your remote workers as independent contractors instead of regular employees so you can save on payroll taxes and other related labor costs. A freelancer usually works on their own schedule, provided that they can deliver before the deadline, and are usually paid after certain milestones are hit or when the project is done.
This is by far the simplest and most optimized template for remote work. In fact, we at Virtuale Staffing still use this template for all our virtual workers to this day. It is detailed enough to include all vital sections but concise enough not to give our new hires too much trouble reading.
If this is your first time drafting a contract for an employee, I’d highly recommend you start with this.
If you prefer to cover more bases and be as detailed as possible, then this remote work agreement template is more suitable for you. This option includes sections for job responsibilities, additional compensation, multiple employment terms, the probationary period, disability, as well as a more comprehensive Non-compete and Confidentiality section.
To avoid all the complications detailed in this post, why not let us do the work for you. No, it’s not gonna cost you more. In fact, since you will be outsourcing to a firm in the Philippines, the cost would likely be as low as $5-$7/hour. And we will match you with candidates who have experience doing similar works to what you’re seeking right now. On top of that, we will provide an expert account manager who can help you manage your staff.
