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 Bahamas can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Bahamas, 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 Bahamas.
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 Bahamas is not the same as paying workers in your own country. Employees have to be paid using Bahamas'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 standard work week in Bahamas is 40 hours per week.
Employees in the industrial, construction, manufacturing, transportation, law enforcement, and vital services industries may be required to work longer hours.
By law, any employee working for more than 40 hours a week or 8 hours a day is entitled to overtime pay.
This should be one and a half times their regular pay or twice their normal pay rate if they are working overtime on a public holiday.
Bahamas employees receive their salary in monthly basis.
In Bahamas, employees with 12 months of consecutive employment are entitled to a minimum of two weeks’ paid leave:
There are 10 public holidays.
Employees with six months of consecutive employment are entitled to one week’s sick leave per year.
Female employees receive 60 days of maternity leave. The maternity benefits are paid for the 60 days of the maternity leave, half of each can be taken before the birth.
Female workers with more than 12 weeks of employment are entitled to nine weeks of maternity leave.
Other than the mentioned terms for maternity leave, there are no comprehensive provisions in the Bahamas law regarding paternity leave.
According to General Orders 1621, Compassionate leave may be granted by a Permanent Secretary on the grounds of urgent personal affairs, such as accident, death and serious illness of immediate family, and emergencies caused by fire or flooding, up to a maximum of 8 days per annum.
Employers in the Bahamas can terminate employees provided they offer them the required notice or severance compensation.
The employee can build a wrongful dismissal case if the employer does not meet the above statutory clauses.
Employers have the right to termination when employees breach the terms of the employment contract or work against the organizational interest of the employer. In such cases, the employer is not statutorily required to give any notice to the employee or pay him severance compensation.
Also called summary dismissal, these happen on the following grounds:
The notice period in Bahamas is:
The Severance Pay in Bahamas;
There is no statutory probation period in the Bahamas. However;