Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.
For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.
For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.
As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.
While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.
A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.
Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Cayman Islands can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Cayman Islands, you have to:
If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Cayman Islands.
An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.
An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.
Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.
At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.
Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:
Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.
Paying employees in Cayman Islands is not the same as paying workers in your own country. Employees have to be paid using Cayman Islands ’s employment and payroll standards.
This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.
Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.
After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:
One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.
Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.
Outside of EORs acting as the full admin employer, many also provide remote payroll.
For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.
We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.
The standard work week in Cayman Islands is 45 hours or 9 hours a day.
Employees receive a 24-hour rest period every week and they receive a 30-minute break after five hours of work per day.
In Cayman Islands, employees overtime is typically paid at a percentage above the regular rate.
Cayman employees receive their salary in monthly basis.
Employees receive two weeks of paid annual leave if they have up to four years of service.
This increases to three weeks for up to 10 years of service. After 10 years, this increases to four weeks.
There are 11 public holidays.
Employees receive 10 days of fully paid sick leave and the employee must provide a medical certificate after three days of absence.
Female employees receive 12 weeks of maternity leave after a year of service and it is pro-rated if they have worked less than a year.
The first 20 days are fully paid and then the reminder is at half pay. They can determine how much leave can be taken before and after the due date.
The employer pays the maternity leave. They are also entitled to nine weeks of adoption leave for a child under the age of three years old.
There is no statutory paternity leave.
Apart from maternity leave, there is no other parental leave.
Employees in Cayman Islands are entitled to have 5 days leave.
Employers can terminate employees when their fixed-term contract finishes or by providing notice.
When there is misconduct, which isn’t serious enough for dismissal, the employee can be given a written warning and if they commit misconduct again within a year, the employer can terminate the employment.
If the employee feels the dismissal is unfair, they can file a complaint with the company director within 90 days of the dismissal and a labor tribunal can determine whether the dismissal was unfair.
The notice period in Cayman Islands is typically a month.
Employees with a year of service receive severance pay. The pay is one week for every year of service, up to 12 weeks of pay.
Probation period is 6 months and can be extend.