A Legal Guide for Businesses Hiring Remote Workers Across Borders

In 2025, the working world is more connected than ever before. Owing somewhat to a global pandemic (but notwithstanding the advancement of cloud-based technologies), many companies are continuing to embrace the cost-saving and productivity-streaming possibilities of remote work — even allowing them to hire across borders without the complexity of physically relocating an employee.

But while global employment is far more accessible than it once was, it isn’t without its legal and compliance-related challenges — even when you’re hiring remotely.

How do you hire a remote employee from another country while complying with local labor laws, for instance? How do you determine whether they need a visa or a work permit? 

In this guide, we break down the legal implications of global remote hiring, so you can recruit and onboard international talent without risking the wrath of country-specific laws.

Classifying workers: employees or contractors?

The first step in legally hiring a remote worker from overseas is to ensure you’re classifying them properly as either an employee or a contractor, particularly as the distinction varies by country, and many jurisdictions default to employee status to protect workers’ rights. Broadly speaking:

• An employee is hired under a contract of employment. The employer controls how, when, and where the work is done, while the employee is usually entitled to benefits like paid leave and health insurance.

• An independent contractor is self-employed and hired to provide services. They typically have more control over how the work is completed, often working with multiple clients, but don’t have access to the same kind of benefits as employees.

While contractors offer more flexibility and are often easier to onboard across borders, they must meet specific legal criteria — such as working independently and using their own tools.

On the other hand, if your business controls how, when, and where work is performed, the worker may legally be considered an employee — even if you label them otherwise.

The consequences of misclassifying an employee as a contractor (or vice versa) can range from fines from labor boards or tax authorities to the risk of class-action lawsuits, in the real-world case of Uber and Lyft. It’s imperative that, as an employer, you understand the distinctions and classify each worker accordingly.

Navigating country-specific employment laws

Naturally, hiring remotely in another country means complying with the employment laws of that country — and to make matters slightly more complex, they can vary quite significantly depending on where your employee is based. 

For instance, if you’re hiring an employee in the United States, laws around minimum wage differ between states, with the federal minimum set at $7.25 but states such as Washington ($16.66) and California ($16.50) having much higher minimum wages.

Paid leave is another important factor that varies per location. While the U.S. has no federally-mandated paid vacation or sick leave, by comparison France offers a minimum of five weeks paid annual leave per employee. In Australia, full-time employees are entitled to 20 days paid vacation and 10 days personal or sick leave.

Other factors to consider include overtime (some countries, like Japan, have strict caps on overtime hours), mandatory benefits (you may be required to contribute to an employee pension or health insurance), and termination — many countries, such as the UK, have protections in place against unfair dismissal.

Clarifying the need for visas or work permits

This is rarely something you’ll need to consider when hiring a remote employee from overseas — since they’re typically not physically relocating to the country your company is based in — but there are some exceptional circumstances where legal risks or requirements may kick in.

For example, if as an employer you have a legal entity in the country your remote worker lives in (such as an office, a subsidiary, or any other type of business presence), local authorities might argue that this person is employed by the local entity, potentially triggering the need for a work permit.

Furthermore, if your employee is classed as a digital nomad (someone who combines work and foreign travel) you may need to confirm whether a digital nomad visa is required. This isn’t always the case, but workers in countries such as Portugal, Thailand, Mexico, and the United Arab Emirates may need one to avoid situations where they’re working on a tourist visa. They can also explore traveltweaks offers for flexible travel options while working abroad.

Complying with data protection regulations

When hiring remote workers from other countries, you must ensure that your business complies not only with labor laws but also with relevant data protection and cybersecurity regulations. One of the inherent risks of remote work is that it can increase the likelihood of 

data breaches, so understanding your obligations and implementing robust policies is key.

Laws that govern the storage and use of data differ between many countries and continents: General Data Protection Regulation (GDPR) in Europe, for example, applies to any company processing the personal data of individuals in the EU, while India’s Digital Personal Data Protection Act (DPDP) must be adhered to by any company (including foreign entities) collecting data from anyone in India.

To make things a little more complicated, some countries denote that certain categories of highly-sensitive data (such as financial or health-related information) must be stored locally, so that it can be handled in line with the country’s own data sovereignty laws

In Russia, for instance, the personal data of Russian citizens must be stored on servers physically located within the country’s borders, while in China, specific types of personal or business-critical data must undergo a thorough security assessment before it can be transferred across borders.

In either of these cases, it can be useful to work with cloud providers that offer region-specific data hosting options, so that you can comply with the requirements of the specific country you’re hiring in.

Considering cultural and organizational factors

While we’ve mainly focused on the legal aspects of hiring remotely across borders, it goes without saying that there are significant cultural and practical challenges to navigate too. Each country tends to have its own cultural nuances and communication preferences — factors which impact productivity and engagement even more than contracts and tax forms.

It’s important to consider that your typical workplace culture may be quite alien to someone joining (even remotely) from another country. They might be used to a more egalitarian approach, for example (where job titles and seniority levels are seen as less important), whereas your company may favor a very hierarchical, top-down structure. Partnering with trusted legal process outsourcing providers can also help ensure compliance while you adapt to these cultural and organizational differences.

Building inclusion into everything you do is paramount, particularly in a remote setting where someone working thousands of miles from their colleagues could easily feel isolated. For example, you might rotate meetings to accommodate different time zones, or offer multi-language documentation to support non-native speakers.

From an organizational standpoint, it’s also essential to have clear, unambiguous policies in place to ensure everyone — no matter where or when they’re working — understands your expectations as an employer: define core working hours so team members can collaborate in real-time, for instance, and embrace asynchronous communication so that projects can progress without people having to work out of hours.

The bottom line? Hiring remote workers across borders opens up incredible opportunities, but it also comes with a number of legal and cultural obstacles that businesses can’t afford to ignore. With the right knowledge and clear documentation — plus a commitment to fairness and transparency — you can build a global team that’s not only compliant but collaborative and inclusive.