With an exponential increase in remote work, cross-border employment is now much more common than it used to be - at least for SMEs who probably never wrapped their minds around the idea of hiring people outside of the United States to carry out daily tasks at their company.Now, with the current environment, it makes more sense to hire “anywhere” there’s good talent available at competitive prices.
With this logic in mind, savvy entrepreneurs have been adding VAs to their teams from different countries. These VAs can play different roles, from the traditional EA (executive assistant) to much more technical positions like marketing, web development and sales. There has also been an increase in requests for leadership positions (why hire a fractional CMO in the states, when you can hire a full time – comparable –team member for the same price, right?). At Cápita Works, we have hired over two hundred people that perform all kinds of roles for our clients, even some unique positions like social media investigators, language tutors and ghostwriters.
Now, some entrepreneurs like to push the concept a little further and question the need to engage with a company like ours (a Virtual Assistance company, or what some people might refer to as a PEO or Employer of Record). As natural hustlers, we like to stretch the ribbon as much as possible, and we think that we could even save more money by simply bypassing the need to deal with a company and just hire a local recruiter to find some talent for us and hire them directly…so far it makes sense, right? Wrong.
What entrepreneurs usually do not consider is something we naturally dislike called “compliance,” in other words: rules.
Let me explain what happens (or could happen) when you do this:
1. It is illegal.
In most countries (yes, even under-developed ones like many in LATAM), it is completely outside the law to hire employees without providing them with mandatory benefits, paying local taxes, and other requirements. This can get your business into trouble (you are not immune by being miles away in the USA, as you might think) and can also get the employee into different types of trouble (like tax issues).
Take for example Mexico, where there are new, very clear and strict, outsourcing regulations and remote work rules. If you are not working with a company like Cápita Works, you will likely be non-compliant in many aspects and will get yourself, or your employee, into unnecessary trouble.
2. It is immoral.
Heck, you are already saving 50 to 70% by hiring talent in low-cost countries. Do you really need to save more by not paying local taxes and providing mandatory benefits? If so, you might have the wrong mindset, culture or are just in a bad business.
3. It is risky.
By hiring directly, you become liable for many things, from employment claims (yes, the employee can file a claim against you in the USA), to delicate tax issues like having a permanent establishment in that jurisdiction when an employee (or unhappy former employee) files a claim locally and they reveal to their local “IRS” that you are hiring direct, or even worse, leasing office space. In that case, your business in the USA becomes a local taxpayer and is liable for many complex cross-border tax requirements you don’t want to deal with.
So yes, hiring a Virtual Assistant is a great way to save money, diversify your team, find new talent, and more, but it does not make sense trying to cut legal corners while doing so. When you engage with a company like Cápita Works, you are not only finding the best talent available in the region through our strict recruitment process, but you are providing fair job opportunities which, in return, helps you build a stronger culture, keep attrition rates at their lowest and have high performing, happy employees.