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.
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 Afghanistan can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Afghanistan, 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 Afghanistan.
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 Afghanistan is not the same as paying workers in your own country. Employees have to be paid using Afghanistan’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.
A lawful working period is 40 hours per week and most employees work eight hours per day.
Employers may adjust an employee’s hours as needed, so long as their working period balances to only 40 hours each week. Under special circumstances, employers must cap the workweek earlier.
Pregnant women and youths aged 15 to 18 may work only 35 hours per week.
Employees who perform work in dangerous conditions may work just 30 hours each week.
Employees should receive a one-hour lunch break, which does not qualify as part of their working time.
Employees who perform night work or work in dangerous conditions must not work overtime.
Pregnant women and women with children younger than two years of age are also ineligible.
The employees in Afghanistan receives their salary monthly.
Employees receive one day of paid leave for every 18 days of work after a year of service if they work in a commercial establishment, factory, shop or transport.
If they work for a newspaper, they receive one day of vacation for every 11 days worked.
Afghanistan observes both national and religious holidays. Employees are entitled to paid leave on the following days:
Employees are entitled to 20 days of paid sick per year.
If a worker needs to utilize three days or fewer, they may send a written notice. For longer leave, the employee must provide a certificate from the health institute’s medical doctor. In areas without access to physicians, certificates from the village headman or Province are valid.
Employees covered by a medical insurance plan may use the certificate from the doctor at the insurance company.
If a worker needs to use more than 20 days of sick leave, they may use other leave for this purpose. In some cases, employees can receive additional sick leave.
New employees who start work in the first half of the year may use the full 20 days of sick leave. Workers who join in the second half are entitled to 10 days.
Female employees are entitled to take 90 days of paid maternity leave.
This leave should begin 30 days before delivery and extend 60 days past the date of the birth.
At the end of the maternity leave, the employee must report to work. In the case of abnormal delivery or multiple births, she is entitled to take an extra 15 days of maternity leave.
To qualify for this supplemental leave, she will have to provide relevant certificates from the hospital.
There is no statutory paternity leave.
If an employee has unused recreational leave at the time of their contract’s expiration, they are entitled to their wages for that leave.
As to termination by an employee, the Labor Law gives an employee the right to terminate the employment contract with or without prior notice if the employer is in breach of their employment contract, or if the employee becomes physically disabled and therefore unable to carry out his or her job.
Employers may terminate an employment contract after 20 days of consecutive absences not covered by leave.
Repeated infringement of labor discipline rules is also lawful grounds for termination. Under these circumstances, an employee is not eligible for severance.
Employer is required to provide one month’s notice in the event of termination of fixed-term contracts, and two months’ notice for open-ended contracts.
During probation, any party may terminate the contract with immediate effect.
Severance pay is mandatory when an employment contract is terminated due to cessation of work, reduction of workforce, imprisonment of the employee or his refusal to be assigned to his previous job, which is payable depending on the duration of service, as follows:
Probationary period of 3 months or less.