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 Bermuda can be expensive, stressful, and time-consuming. It's not for the faint of heart.
To set up a subsidiary in Bermuda, 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 Bermuda.
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 Bermuda is not the same as paying workers in your own country. Employees have to be paid using Bermuda'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 working hours is 9 a.m. to 5 p.m from Monday through Friday, including an hour's break for lunch.
Generally, employees who work overtime for more than 40 hours per week must be given overtime pay.
The rate is one-and-a-half times more than the usual hourly wage.
The workers must be given the usual hourly rate for the overtime hours that they work. Moreover, they must be given the same number of hours off from work the next day.
Depending on the company that the employee works for, contracts include double pay for overtime work done on a Sunday and on public holidays.
Employees in Bermuda receives their salary in monthly basis.
Employees may take up to 5 days of paid vacation leave after 6 months' continuous employment.
Previously, under the EA 2000, an employee could only take 10 days paid vacation leave per year after completing 1 year of continuous employment.
The employees are entitled to another day off with pay if the public holiday coincides with their rest day. If an employee works on a public holiday, the same terms as that of overtime are applicable.
In Bermuda, an employee also gets paid for a ‘Rest Day’, which the employer must provide every week and comprises one(1) whole day (24 hours).
There are 10 public holidays in Bermuda.
In Bermuda employment law, employers must provide employees who have worked at least one year of continuous employment with eight days of paid sick leave per year.
The Employment (Maternity Leave Extension and Paternity Leave) Amendment Act became effective on 1 January 2020. This Act has extended the paid maternity leave from the initial eight weeks to thirteen weeks
In Bermuda, five days of paid paternity leave have also been added.
An employee is granted bereavement leave for three consecutive days on the demise of an immediate family member and five days to attend funerals of family members overseas (Section 17 of the Employment Act deals).
As per the employment act, immediate family members are:
Employers are not obliged to pay for the Bereavement Leave of an employee.
An employer must send a notice in writing before termination. Except in cases where the duration or fixed period has expired. Upon the service of minimum notice, employees can be terminated.
The notice period in Bermuda:
The amount depends on the length of service, the statutory minimum being two weeks' wages for each year of completed service up to 10 years, and three weeks' wages for each year of completed service thereafter, subject to a maximum of 26 weeks' wages.
Probation period is 6 months.