If you have your sights set on remote work and you are about to start looking for a full-time remote developer job, you must understand how it works from a legal perspective, so that you can prepare in advance and transition smoothly to your new job. I know that might feel boring, but it’s necessary if you want to leap into remote work.
You’ll be a contractor
Going remote means you are on the international market, so companies from all over the globe could potentially want to hire you. Since countries have different labor laws, corporate law, tax systems and so on you’re no longer in the employer-employee relationship, you will work as a contractor. That means you’re not on a payroll, you’re a service provider and charge for your services.
To be able to invoice for the services in most countries there’re generally two options. Either register as self-employed in some form like a sole proprietor or individual entrepreneur or register a company. I strongly advise you to get legal help when weighing out your options.
A professional can explain to you the differences (which are again country-specific). Like what legal obligations come with them, which one can save you more on taxes, what you need to comply with, and so on. They can also help you with registering and later on with running your legal entity. That can save you a lot of time and headaches.
It’s important to look up your options in advance so that you can plan the necessary legal steps you need to take. Many people tend to leave them for the last minute and then as they rush through them that increases the chances of finding themselves with a fine or in some form of legal trouble.
You’ll be responsible for paying taxes
Regardless of under which setup you choose to do business, as I already hinted above, you will be responsible for paying your taxes and social contribution fees. If you’ve been working as an employee up to now, those have been paid by your employer. In most countries being self-employed also means that you’re no longer protected by labor laws or labor unions etc.
So, the concept of the minimum wage, minimum vacation days, or wrongful termination doesn’t apply to you once you are a contractor. You are not entitled to any of the benefits that you would have if you were an employee.
Your contract is vital
Your work and conditions are entirely regulated through the contract, so it is of significant importance. Read it thoroughly, make sure you are aware of all details. You need to negotiate any specific requirements or benefits that you may want to include or change. I also advise you to have a lawyer vet it for you. That can protect you from anything you might have missed or be unaware of as this isn’t a standard payroll contract that you might be used to signing.
Professional liability insurance
It’s a common practice for companies to ask contractors to have professional liability insurance. Businesses usually have insurance that covers incidents deriving from their employees, but since you are a separate entity they may ask you to get one too. So you might want to research the possibilities beforehand.
If the remote company is registered in your country they will probably be able to hire you as an employee and hence you won’t have to deal with the abovementioned responsibilities.
How all that can sometimes affect your job search
In some situations, the location can be a determinant factor when a company decides who to hire. For example, if a company has branches in countries A, B and C and so can legally employ developers in any of those, then an applicant from A might be preferred to one from D as they can bring them(A) as an employee rather than a contractor(D) (or vice versa). It depends on their remote hiring policy.