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 Moldova can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Moldova, 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 Moldova.
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 Moldova is not the same as paying workers in your own country. Employees have to be paid using Moldova’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 in Moldova is 40 hours but it sometimes reduced by collective bargaining agreement terms. If the employees who is working in a hazardous environment where hazards cannot be eliminated through occupational health and safety measures may have their workweek reduced to as little as 36 hours.
In Moldova, overtime laws are complex and can depend on the specific circumstances and the employee. Mostly, overtime is permitted only in the event of an emergency.
An employer may require overtime without the employee’s consent in a few emergency situations, but the employee must consent to the overtime in other urgent situations, and in non-urgent situations, both the employee and the employee representatives must give their consent.
Overtime work is limited to 120 hours per year, although this amount may be increased to 240 hours by a collective bargaining agreement in certain cases.
Employees under 18 years old, pregnant women and workers whose doctors have indicated they are not fit to do so may not work overtime.
Employees who work 120 or more hours at night in a six-month period must be examined by a doctor at the employer’s expense. Night work is prohibited for certain employees.
Moldova employees expect to be paid monthly on the 25th of each month.
In Andorra, employees typically receive 28 days of paid vacation each year.
There are 11 public holidays.
Employees are entitled to a specific amount of sick days.
A proper medical certificate must be provided to the employer by the employee. During the first five days of sick leave, the company compensates the employee, and from the sixth day on, a social security payment is provided.
Female employees are entitled to:
Employees are also eligible for partially paid maternity leave until the child is 3.
The father receives a portion of the female employee's maternity benefit either after the kid is born or after the female employee returns to work.
Beginning six weeks after the birth, the child's father, or the mother's spouse or partner, has the option of taking the balance of the mother's maternity leave.
The father is entitled to 14 days of paternity leave when his child is born. He may request the leave within 56 days of the birth and provide a copy of the birth certificate.
Employee are entitled to bereavement leave, if the employees who have worked for an employer for a continuous 6 month period:
Employers must have valid legal grounds and provide the requisite notice of termination before terminating an employee.
The employer and employee agree otherwise, a written notice must be given at least 30 days prior to the date of termination of employment.
The Severance Pay should not be less than three months' worth of average monthly earnings free of taxes and contributions in the preceding semester.
Probation period is shall not exceed 6 months.