How to Be Properly Employed as a Remote Worker: Options Explained
The advent and acceptance of remote work have fundamentally changed how many individuals earn their income. This comes as no surprise, considering the flexibility, improved work-life balance, and many other benefits that remote workers enjoy.
However, the shift to remote work has also imposed a few challenges, especially for freelancers, independent contractors, and individuals who want to embrace global work opportunities while still enjoying legal employment status in their residential countries.
Understanding employment status
Before we start exploring proper employment and the differences between regular employees and independent remote workers, it’s important to define and understand the meaning of employment status.
In simple terms, employment status is the legal classification that individuals have at work based on their relationship with their employers. An employment status determines the work rights and obligations under the law, including whether the individual is considered an employee or an independent contractor, their tax responsibilities, eligibility for benefits such as health insurance and retirement plans, and the level of job security they receive.
While regular employees have these aspects covered by their employers, it’s important to note that freelancers and independent contractors are responsible for managing their own tax obligations, securing benefits, and ensuring their job security.
Challenges of being hired as a remote worker
While remote work has made a major shift in how individuals work on global levels, it’s important to understand that it doesn’t come without any challenges. Below, we explore the challenges of working remotely for a global employer.
Isolation and lack of communication
Remote workers can often feel isolated due to the lack of in-person interaction with their colleagues, which can lead to disconnection of the team and less motivation. In addition to this, remote work relies on digital tools, which also imposes the challenge of maintaining communication across different time zones and virtual platforms.
When team members are spread across various locations and time zones, it’s difficult to coordinate meetings and avoid miscommunication, which typically results in delays, misunderstandings, and decreased productivity. Additionally, without the spontaneous conversations and social interactions that occur in traditional office setups, remote workers may miss out on the support that comes from being physically present with colleagues.
Work-life balance
Without clear boundaries between work and home, many remote workers struggle to maintain a healthy work-life balance. This is due to the absence of physical separation between the workspace and living space, making it more difficult to switch off from work and leading to potential burnout.
This is why it’s always recommended to establish a remote work routine that will define the boundaries of work and ensure that it doesn’t encroach on personal time. In addition to this, remote workers are also recommended to develop their own strategies that will minimize distractions and create a productive work environment that won’t interfere with their personal obligations.
Technology issues
Considering the fact that remote work relies on technology, it’s evident that technical difficulties can disrupt the productivity and efficiency of work. Working remotely requires a reliable internet connection, functioning hardware, and access to necessary software, platforms, and tools, and any disruptions in these areas can lead to delays and frustrations.
Unlike physical office settings where immediate IT support is available, remote workers often face additional hassles in resolving technical issues, which prolongs their downtime and impacts their ability to complete tasks efficiently.
Job security and stability
The rise of remote work has brought more flexibility for global employers to collaborate with freelancers and independent contractors. While many individuals embrace the freedom of independent working, not being entitled to proper employment is a significant issue.
When working remotely for clients and global employers, independent contractors are in charge of securing their own job stability, which includes ensuring an employment contract, providing healthcare and pension, and paying taxes on their own. Not having formal employment and all the perks that come along majorly impact the job security and stability of this group of remote workers in the long term.
Benefits of working remotely for employees
While working remotely brings its own set of challenges, the number of benefits that come with this concept is also quite apparent. Below, we explore the numerous benefits of working remotely and how they can impact remote workers’ performance, security, and quality of life.
Flexibility and productivity
Remote work is known for offering individuals the flexibility to design their own workday according to their individual preferences and needs. Having this flexibility also leads to being more productive, as individuals can choose the most optimal times and environments for working and completing tasks.
Whether working during their most productive hours or from the comfort of their own homes, remote workers have the freedom to structure their work to maximize their efficiency and output.
Access to global opportunities
In simple terms, remote work means removing geographical barriers to conducting work, which allows individuals to access job opportunities and collaborate with colleagues from all around the world.
This opens up a vast pool of talent and resources and provides the opportunity to work on diverse projects and broaden the professional network. With access to global opportunities, remote employees are in a great place to expand their skill set, gain valuable experience, and advance their careers without the constraints of location.
Autonomy and control
Remote work empowers employees with a greater sense of autonomy and control over their work environment and schedule.
Remote employees have the flexibility to operate in a way that aligns with their individual preferences and strengths, ultimately leading to greater job fulfillment. Without the need for constant supervision and micromanagement, employees are more likely to take ownership of their tasks and make decisions independently. This type of autonomy fosters a sense of trust and responsibility, which leads to increased job satisfaction and motivation.
Proper employment setup
While remote work is often associated with the flexibility of choosing how individuals want to work, their access to formal employment and the associated perks doesn’t have to be a challenge.
In other words, remote workers can still enjoy job security and stability through modern solutions and platforms online. By leveraging such solutions, along with the advancements in technology and remote work policies, individuals can pursue remote work arrangements that align with their needs and preferences without sacrificing the security of traditional employment.
Options to be properly employed as a remote worker
Speaking about remote work without sacrificing the perks of traditional employment, remote workers today have many options to conduct work on global levels. Below, we’re exploring a few types of remote work options, such as employment through EOR providers and the independent contractor classification.
I. The Employer of Record (EOR) option
EOR (Employer of Record) providers are standing out as one of the most popular options for securing formal employment and all the perks that come along with the status, while still having the flexibility to work remotely. Let’s explore what is EOR and what are the benefits of such setups.
A. What is EOR?
In simple terms, EOR providers act as the official employers for remote workers and handle administrative and compliance tasks such as payroll, taxes, and benefits administration. By being legally employed through the provider’s legal entities in your country of residence, you can enjoy the security of traditional employment without a formal employee-employer relationship with your clients or a company.
Today, remote workers have many available options, such as Native Teams’ EOR solutions for securing legal employment and the associated perks while still having the freedom to work for global employers and clients of choice.
B. Benefits of EOR
Now that we’ve established what is an EOR provider and what types of solutions they offer, we are exploring how remote workers can benefit from collaborating with one.
Legal employment
EOR providers take on the responsibility of ensuring that your employment relationship is legally sound, providing you with the peace of mind that comes from knowing that you’re protected under relevant labour laws and regulations. This not only safeguards remote workers’ rights as an employee but also gives them a solid foundation for building their global careers.
Access to employee benefits
EORs offer access to a range of benefits typically associated with traditional employment, including health insurance, retirement plans, and paid time off. Having access to employee benefits offers not only long-term job security and financial stability but also peace of mind and the ability to take care of your health and well-being while pursuing your career goals.
Administrative support
One of the most significant advantages of working with an EOR is the administrative support they provide. Instead of having to navigate complex payroll processes, tax obligations, and benefits administration on your own, EOR companies handle these tasks on your behalf. This frees up many remote workers’ available time and energy to focus on job-related tasks without the added burden of administrative responsibilities.
Compliance assurance
Compliance with employment laws and regulations can be a daunting matter, especially if you’re a remote worker who works across different jurisdictions. EOR providers specialize in ensuring compliance and staying up to date with the latest legal requirements and regulations in various countries. By partnering with an EOR, remote workers can rest assured that they are operating within the bounds of the law and minimizing the risks of legal issues.
Global opportunities
EOR providers are especially beneficial for remote workers who are looking to expand their careers and explore opportunities beyond their local markets. In simple terms, EORs enable these individuals to work for clients or companies located in different countries, which opens up a world of possibilities to expand your professional network, all while enjoying the benefits of legal employment through an EOR.
II. The independent contractor option
Besides choosing legal employment through an EOR provider, remote workers can also choose to be classified as independent contractors, which also opens up many opportunities for global working. Let’s explore what an independent contractor is and the benefits of operating as one.
A. What is an independent contractor?
Independent contractors are self-employed individuals who are typically hired to perform specific tasks for another party, often referred to as the client or customer. Unlike traditional employees or remote workers employed through an EOR, independent contractors typically operate under a contract that outlines the scope of work, payment terms, and other relevant details.
What’s important to note is that independent contractors are not considered employees of the client, meaning that they’re responsible for managing their own taxes, insurance, and other business-related expenses. However, they have greater flexibility and autonomy in their work and can work on a project basis and for multiple clients at the same time.
B. Benefits of being a contractor
Being an independent contractor comes with its own set of benefits, impacting the way these individuals operate in the global world of work. Let’s explore the many benefits of this type of remote worker classification.
Flexibility and autonomy
Being an independent contractor means that you can enjoy the flexibility of setting up your work schedule and choosing which projects to take on. This allows establishing a greater balance between work and personal commitments, and also to tailor workloads per the individual’s preferences.
Potential for higher earnings
Independent contractors have the potential to earn higher rates than traditional employees, especially if they possess specialized skills or expertise in high-demand sectors and fields. Contractors can also negotiate their rates with clients and may have the opportunity to take on multiple projects at the same time, which ultimately increases their earning potential.
Tax benefits
Depending on the jurisdiction, some contractors may be eligible for certain tax deductions and benefits unavailable to traditional employees. This includes deductions for business expenses such as home office costs, travel expenses, and professional development costs, which allows contractors to minimize their tax liability and keep more of their earnings.
Networking opportunities
Working as a contractor often involves interacting with a variety of clients and industry professionals, which comes as valuable opportunities to expand your professional network. Building relationships with clients and colleagues can lead to future business opportunities, referrals, and collaborations, which can also positively impact your career and growth.
Choosing the right option - Factors to consider
While both being employed through an EOR and operating as an independent contractor come with advantages, several factors should be carefully considered before deciding which classification to choose. Below, we explore the most significant factors that come into play when choosing the right career path.
Employment status and legal protection
When getting employed through an EOR provider, individuals have the legal status of an employee, which comes with certain protections under employment laws and regulations. This is not the case with independent contractors, as they’re considered self-employed individuals who don’t have the same legal protections as regular employees.
Independent contractors have more freedom to choose how they work, but they are responsible for handling legal disputes and liabilities on their own.
Employment benefits and perks
Employment through an EOR means getting access to benefits such as health insurance, pension, and paid time off, which provides financial security and peace of mind. On the other hand, independent contractors are responsible for providing their benefits, which can be more expensive and difficult to obtain.
Tax implications
When using an EOR, the provider typically withholds taxes from your paycheck, making it easier to manage your tax obligations. However, as an independent contractor, you’re responsible for paying self-employment taxes and managing your own tax withholdings.
While independent contractors have more opportunities for tax deductions, it’s important to remember that managing tax compliance can be difficult, especially without the support of a tax professional.
Job security
Employment through an EOR provides greater job security, as you’re covered by an employment contract following the regulations of your resident country. When compared to being classified as an independent contractor, the responsibility of covering aspects such as employment contracts, benefits, and taxes can be a great administrative burden and even a compliance issue without the guidance of experts.
Summing up
In the modern world of remote work, there are many opportunities for each individual who wants to build a global career.
