All the Legal and Compliance Headaches You'll Avoid with Howdy

Global hiring can help create a more dynamic and intellectually diverse team. However, it requires a solid understanding of local legal practices and compliance to navigate properly.

Understanding Legal and Compliance Requirements

Hiring an international team can be a boon for many companies, as the benefits range from economical to cultural. But, the hiring process itself necessitates a thorough understanding of international laws, either by training an internal team or by using an EOR service. When companies hire internationally using an EOR, they rely on the service to adhere to legal standards while directing administrative duties such as payroll and PTO.

While using an EOR isn’t necessary for international hiring, it’s far and away the less stressful and more legally coordinated option, as the services utilize team members familiar with the host country’s legal intricacies. Learning the ins and outs of another country’s legal system can be time-consuming, especially when hiring and onboarding in multiple countries. For an expedient and compliant recruiting experience, it’s best to trust an EOR service to get the job done.

Navigating Local Labor Laws

Establishing a legal entity or branch office in a secondary country of operation takes significant time and resources. Not every country requires that legal entities be established before engaging in business operations. Still, it’s important to know the details of international employment before worrying about drafting contracts or leasing office buildings abroad.

Constructing an office or launching a legal entity in another country from the ground up can take significant time away from day-to-day operations and cause a great deal of stress to team members less experienced with international legal compliance. Howdy employs a team of compliance experts in seven major LatAm cities, each with unique legal intricacies to keep up with. Instead of slowing down momentum to train team members on and stay current with compliance matters, businesses can keep growth as their top priority while trusting Howdy to manage nearshore talent.

Managing Payroll, Benefits, and Tax Compliance

How international taxes are filed requires research and familiarity to avoid penalties or fines. Countries can have different withholding adjustments or deductions depending on their local laws. EORs like Howdy can take the hassle out of learning new tax codes and proper filing methods because of their deeply rooted familiarity with the policies.

The same is said for benefits and insurance packages, as each LatAm country operates in a unique capacity for salutary benefits. Paid time off, insurance coverage, and pensions are handled differently in LatAm than they are in the US, and keep in mind that every host nation has its own set of federal, cultural, and religious holidays. LatAm policies regarding offboarding are divergent from US policies, as laws around labor force protection support a broader window around team member termination.

Data Protection & Privacy

Cybersecurity has become a top priority for companies employing remote team members, especially since the onset of the pandemic forced companies to adopt a hybrid or fully remote model to stay in business. Since this massive shift, small and medium-sized enterprises have been exposed to cyberattacks, phishing attacks, and other data-related scams. In addition to regularly training team members on how to avoid these scams and better protect personal and proprietary data, Howdy adheres to international data protection regulations and stays compliant as the policies are systematically updated.

Immigration & Work Classification

Acquiring the necessary work visas for areas with no EOR or legal entity in place can be one of the most costly hurdles for a company’s time and resources. The application process can take months to navigate and costs over $100,000 to establish without a legal entity in the country of operation. Howdy streamlines the hiring and onboarding process by already being a legal entity in LatAm countries, negating such burdensome delays.

In addition to seeing that their benefits and payroll are met, using an EOR to hire nearshore talent involves designating the appropriate work classification for team members. Howdy reduces the risk of misclassification by helping partners correctly identify whether team members are employees or independent contractors early on and via check-ins throughout team members' careers.

Headache Mitigation

EOR services can be a logistical boon for small and medium-sized enterprises looking to expand the workforce into LatAm. Not only is it economically feasible for many companies to save resources by ethically hiring in LatAm using an EOR, but it’s also administratively more sound to use an established legal entity to fulfill hiring and onboarding services.

Discover the possibilities of working with an established EOR and one of the fastest-growing businesses in Central Texas by booking a demo with Howdy today. The search for top tech talent only takes a few days but can save companies months of troublesome research and can resolve with incredible workforce solutions that last years.