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 Algeria can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Algeria, 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 Algeria.
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 Algeria is not the same as paying workers in your own country. Employees have to be paid using Algeria’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.
The working week typically runs from Sunday to Thursday and the maximum prescribed working hours for an employee is 40 hours per week (based on a five day week) and eight hours per day (exclusive of a one hour break).
Women are not permitted to work between 9pm and 5am unless specific exceptions are granted by the Labour Inspectorate where the nature of the activity/job role requires.
Employees may only be required to work overtime by their employer in exceptional circumstances, for example where it is crucial to ensure the completion of a piece of work or project.
Overtime hours must not exceed 20% of the maximum working hours (i.e. eight hours per week) and an employee must not be required to work more than a total of 12 hours per day.
Where an employee is required to work additional hours, they are entitled to overtime pay, of a minimum of 150% of the normal hourly wage. If circumstances require the employee to work on their weekly day off, they must be granted another day off (in lieu) and 150% off their wage for the overtime period.
By law, no employee can be forced to work overtime for more than 8 hours a week. Employees working overtime are entitled to an extra payment of at least 50% of their regular hourly pay.
Employees in Algeria receives monthly wage.
PTO is calculated by the:
There are 10 public holidays.
Employees are entitled to sick leave usually paid for from the day of illness.
Sick leaves are provided where employees receive a portion of their salary during the first 15 days of absence due to illness.
This increases after 16 days of sickness, or if the employee is admitted to the hospital.
Mothers who must stop working because of pregnancy are entitled to a daily indemnity of 100% of the daily salary for their position (average of the actual salary), for a maximum of the subsequent 14 weeks. The mother must stop working at least one week before confinement.
To obtain these benefits and indemnities, a registered doctor or qualified medical auxiliaries must have assisted at the birth. During the first six months, employees are entitled if they worked at least:
Male employees can take up to three days of paid emergency leave for the birth of a child.
Female workers may take part-time paid parental leave for up to 18 weeks, in this case they will receive 50% of maternity benefits and 50% of their wages.
Jury Duty Leave and Voting Leave (Leave due to Public Interest) - Not specified by law.
Military Leave -Not Specified by law.
Employees are entitled to three days' paid leave.
Employees are entitled to three days' paid leave.
Employers must provide notice of dismissal absence and serious misconduct by the employee.
The notice period is six months (or up to 12 months for skilled employees), plus five days for each year of service up to a maximum of 30 days.
Employees should get compensation in cash if they are dismissed, for several reasons.
The notice period is equal to the trial period duration, plus five days per year for the number of years you have been working in the company.
The Severance Pay in Algeria depends on the Duration of Employment:
Severance Pay (Layoff)
Mandatory -1 month
Collective Agreement - 1 month
Minimum Employment Period - 12 months
Probation period is 6 months.