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When should global contractors become employees?
27% of HR professionals have misclassified a global hire, resulting in costly risk. Rippling can help you expertly navigate workforce transitions and manage global contractors and employees.
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Contractors provide an easy start to global hiring
When you hire contractors, you’re not responsible for payroll taxes, benefits, or leave entitlement which keeps costs down.
Contractors can sign and complete KYC verification, enter payroll details, and get a company email address—all in one flow.
Currency flexibility and no obligation to provide local tax and benefits doesn’t just save money. It saves you day-to-day admin.
When should you convert a contractor to an employee?
You should regularly assess whether to convert individuals classified as contractors to employees in order to mitigate costly risks that can hinder your organization's next stage of growth.
71% of HR professionals believe that VCs are less likely to invest in a startup that has faced compliance issues. You'll need to constantly reassess your compliance practices to be ready for your next round or M&A.
If you're not careful, a terminated worker—even if they chose to be a contractor—may pursue legal action on the grounds of misclassification. Being proactive about risk protects you in the event of a future dispute.
Protect your intellectual property with an employer-employee structure, which maintains stricter and more enforceable policies than contractor IP agreements.
As you scale your global workforce, you’ll need to offer a competitive benefits package and compliant employment model or immigration support to win top candidates.
Conduct a case-by-case evaluation
You can determine if you should convert any of your contractors by understanding your risk and considering which employment model makes the most sense.
Rippling makes the transition seamless
Converting a contractor to an employee is easily done in a simple transition flow, and compliance is automatic.
An all-in-one solution maintains comprehensive data for each worker regardless of their status.
There’s one org chart, one place for reporting, and one set of policies for all.
An EOR is the easiest way to employ internationally
Rippling lets you easily hire, pay, and provide benefits to employees in markets where you don’t have an entity. Manage everything from one platform that scales with you as you grow.
Fast and easy hiring
Rippling’s onboarding flow handles everything from offer letter and benefits enrolment to assigning required trainings so your employees can start immediately.
Compliant payroll
Not only do you get the fastest, most accurate payroll, Rippling calculates taxes and manages filings for you.
Attractive benefits
Attract top talent with quality, local benefits from in-country providers. Rippling provides all legally required plans so you know you’re in compliance.
Keeping contractors is convenient, too
Rippling makes it easy to hire on demand, with everything you need to quickly and compliantly hire, pay, and manage global contractors.
Locally compliant contracts
Access our library of dozens of local contractor agreements, reviewed by in-country legal counsel.
Pay in 185+ countries
Rippling provides easy, transparent invoicing and ultra- fast payment processing, including cross-border payments and currency conversions in 50+ currencies.
Simple administration
Pay-runs are synced with invoices. Policies and approvals are automated. And contractors are managed from the same place as the rest of your workforce.
Rippling is here to help
See how Rippling can help you effortlessly onboard and manage your global workforce.
FAQs
What is EOR?
An Employer of Record (EOR) is an organization that legally employs and pays global employees on behalf of their clients. Businesses often choose to use an EOR to employ talent internationally to avoid setting up local entities, which can be complex, expensive, and time-consuming. EORs take on the liability of employing international employees, ensuring compliance with local employment laws, and can help with tasks like paying salaries and taxes, immigration, protecting IP, and more
What is an independent contractor?
An independent contractor provides services under a contract without being employed by the client. Unlike employees, contractors handle their own taxes and benefits, and they usually work on a project or term basis.
When should you convert a contractor to an employee?
You should consider converting a contractor to an employee when you need a long-term role filled, require regular work hours, or need to have direct control over how the work is performed. Converting also helps in aligning with legal compliance and reducing misclassification risks.
Why should employers convert contractors to employees?
Converting contractors to employees can enhance compliance with labour laws, provide greater control over work processes, and foster team cohesion by integrating workers fully into your organization's culture and benefits system.
How can you convert your contractor to an employee?
When converting a contractor to an employee, begin by assessing the need for a permanent role and ensuring compliance with local labor laws. Next, draft a formal employment offer, restructure their payment to a salary basis, enroll them in your HR systems, and update their tax, benefits, and compliance statuses.
Can every company convert contractors to employees?
Not all companies will find converting contractors to employees straightforward due to various legal and operational constraints. It depends on the business structure, the nature of the work, the contractor's consent, and compliance with both local and international employment laws.