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.
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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 Zambia can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Zambia, 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 Zambia.
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 Zambia is not the same as paying workers in your own country. Employees have to be paid using Zambia’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 workweek is 8 hours per day and these should not be more than 48 hours per week.
By including the lunch and prayer time in hours of work, working hours should not be greater than 9 hours a day.
Work that is performed in excess of 48 hours a week is to be paid overtime at one and-a-half times the worker’s hourly rate of pay.
Work performed on paid public holidays or on a Sunday(where Sunday is not part of the normal working week) should be paid at double the worker’s hourly rate of pay.
Time off may be substituted for overtime pay.
Employer
Employees in Zambia receive their salary in a monthly basis
There is no provision in the law.
All employees, except temporary or casual employees, contracted to work for 12 months or more are entitled to annual paid leave calculated at a rate of two days per month or 24 days per year.
There are 14 public holidays.
The duration of sick leave entitlement is based on the following:
In Zambia, under the Employment Code Act, under the provisions of section 41, if the female employee with at least two years of continuous service is entitled for 14 weeks' maternity leave with full pay.
Fathers who have one year of continuous service with their employers are entitled to 5 days of paternity leave, to be taken within 7 days of the birth of the child.
There is no provision in the law on paid or unpaid parental leave.
Family Responsibility Leave - Employees with at least six months of service are entitled to seven working days of paid leave.
Employees are entitled to seven days of leave.
Employees are entitled to 12 days of paid compassionate leave for the death of a spouse, child, parent or dependent.
A worker who is re-hired by the same employer for the same job within two years from the contract termination date is not required to go through probation again, provided that the termination was not performance-related.
The employee is also entitled:
The notice period in Zambia is:
Severance is not payable to employees working under a fixed-term contract or so-called long-term contract (defined as a contract for service exceeding 12 months, renewable for a further term or for a specific task/project with a predefined end date).
Instead, they are entitled to an end-of-service lump sum gratuity equal to 25% of the employee’s base pay over the term of the agreement.
Provisions were created for probationary employment of up to three months, which may be extended one time.
