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 Slovenia can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Slovenia, 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 Slovenia.
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 Slovenia is not the same as paying workers in your own country. Employees have to be paid using Slovenia'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.
40 hours over 5 days per week, including a 30-minute lunch period (paid). Full-time employment is no less than 36 hours.
Salaries are paid monthly.
Employers are obligated to pay an annual leave allowance of at least a month’s salary at the current minimum wage, payable by June 30.
Christmas bonuses are common and often tied to performance, but not required.
At least 4 weeks of paid time off, whether the employee is full-time or part-time.
There are 15 public holidays.
Sick leave is unlimited provided that the employee brings a certificate from a doctor. If the illness or injury was work-related, the first 30 days are covered by the employer. After that, it is covered by social security.
Paid maternity leave in Slovenia is 105 days, including up to 28 days before the birth of the child. Pay is based on average earnings over the previous 12 months.
Paid paternity leave is 30 days. Pay is based on the average earnings over the previous 12 months, up to 2.5x average monthly salary in Slovenia (currently EUR 3,664.31).
Each parent receives up 130 days of additional leave, paid at the same rate as maternity and paternity, up to a limit of 2.5x the average monthly salary in Slovenia (currently EUR 3,664.31).
A father can transfer the full 130 days to the mother, and a mother can transfer up to 100 days to the father. As many as 75 days can be used up until the child completes first grade.
Employees over 55, people with disabilities, and those caring for a child with disabilities are eligible for up to three additional days of paid leave. Parents with children under 15 get an additional day per child
There are two types of dismissals – regular and extraordinary. Regular dismissal is in the case of redundancy, incompetence, or misconduct. Extraordinary is when an employee commits a crime, fails to show up for work, presents false data, declines a transfer, and other serious breaches.
In both cases, the employer must inform the employee in writing and provide an opportunity for the employee to present a defense.
In an extraordinary dismissal, the termination must be delivered in writing and express the reason for the termination and must be delivered in person.
In a regular dismissal, the notice period depends on the number of years the employee has been with the company. Up to one year – 15 days’ notice; one to two years – 30 days’ notice; above two years – 30 days plus two days for every year served above two.
For at-fault dismissal, notice is 15 days.
For failing a probationary period, notice is 7 days.
No notice period necessary for extraordinary dismissal, though the employer must provide a termination notice within 30 days of the incident that led to termination.
In a regular dismissal, the employee is entitled to a severance payment. Those who served between one year and 10 years, the employee receives 1/5 of the average salary from the previous three months for every year served.
For those who served more than 10 years, severance is ¼; over 20 years gets 1/3.
Employment could include a probation period of no more than 6 months.