This guide outlines the legal and finance challenges that companies often navigate, when building a remote-first workforce. Rather than offer prescriptive steps to regulatory gray zones, this resource highlights judgment calls that leaders should anticipate making, including outlining risks and rewards. Throughout each section, we’ll share our experience at Doist, a remote-first company, on building and scaling remote operations over the last 12 years. Today, our team consists of 69 people in 52 cities in 25 countries.
In addition to offering our own insights, we’ve also collected interviews from experts and entrepreneurs who are experiencing similar challenges building their own remote teams. Compliance is at the heart of every healthy business. There’s no playbook for building a remote-first company with team members all over the world. This process is a formula that distributed teams are learning in real-time.
Talent is evenly distributed but opportunity is not. Legal, finance, and tax frameworks provide infrastructure for building global businesses to harness the world’s genius.
And finally before starting, please note this in relation to the guide. We are providing this in the spirit of openness and good faith, and it is intended as a collection of experience people involved in Doist have learned during the process. As such it is intended to kick-start the brainstorming process rather than provide firm rules. It is NOT legal advice in any way, should not be construed as such and Doist (or any individuals named) do not accept any responsibility in the event of reliance. Every situation is different and you should seek independent advice based on the precise facts of your circumstances of your case. Thoughts expressed are not necessarily formal Doist policies or procedures.
Connection is Enabling Remote Work
According to the World Economic Forum (WEF), planet Earth is going through a Fourth Industrial Revolution. Technology is accelerating at an unprecedented pace. The result is a shift in the way people live, work, and relate to one another. Thanks to mobile phones, everyone—anywhere in the world—can connect to each other. New economic opportunities are emerging as a result, opening doors for people to find meaningful employment.
“In its scale, scope, and complexity, the transformation will be unlike anything humankind has experienced before,” writes Klaus Schwab, founder and executive chairman at the World Economic Forum. “We do not yet know just how it will unfold, but one thing is clear: the response to it must be integrated and comprehensive, involving all stakeholders of the global polity, from the public and private sectors to academia and civil society.”
The rapid growth of productivity and collaboration software creates gateways and pathways for people to work together in unexpected ways. A financial services startup in New York, for instance, can hire a team in West Africa while also employing teammates in San Francisco partnering with funding partners in China. A large corporation in Los Angeles can hire employees in Stockholm and Tokyo—anywhere, really. A team can be 100% or partially remote, opening up pipelines for talent that would be challenging to reach otherwise. Imagine that—a company no longer needs to worry about geography when recruiting, hiring, and building its best team. It’s a brand new framework that's already creating ripple effects in global entrepreneurial activity. Remote work is good for the global economy because it creates actual value for humans and societies.
“My favorite thing about running a remote first company is the fact that you can hire from all over the world.” - Allan Christensen (COO, Doist)
However, there’s a barrier. Laws around the world haven’t caught up with technology. Regulations are often complex, varying city by city. It can be a challenge for companies to monitor legislation that is often changing.
What steps should your business take to remain in compliance—to be safe from unanticipated problems and penalties? This has been a question that the Doist team has navigated for more than 12 years, in our growth and journey as a remote-first company that was bootstrapped to the size it is now. We’re keen to share what we’re learning along the way, to help you build and grow your own remote-first company too.
COO, Doist
We couldn’t find the people we needed to hire locally where our company began, in Chile. We also knew we weren’t going to stay but weren’t sure where we were heading next. We're also bootstrapped and didn’t want to start teammates on a low salary. Building a remote-first culture gave us access to super talented people in very remote locations.
Understand the Legal, Tax, and Compliance Challenges of Building a Remote Team
The challenge of building a remote team is that unforeseen complexities can arise when operating in different countries, provinces, states, counties, and cities. That’s why many companies are hesitant to build remote teams. It’s easier to be compliant in one or two cities than multiple countries.
Employment taxes and laws, around the world, are location dependent—sometimes, at the city level. A company that hires all over the world needs to protect itself and remain in compliance with local laws. Part of the problem is that local laws are often complex. Companies may not have the resources to remain in compliance and be taking on financial or legal risks without fully realizing it.
“Some countries have a more loose approach than others,” says Allan. “In Denmark, for instance, you can’t be a self-employed with only one customer. Companies must designate employee status to these workers. But, the tax authority can offer leniency in certain situations provided you pay full income taxes on the whole amount.”
Some parts of the world are stricter than others when it comes to worker rights:
In France, employers must limit business emails to working-hours.
In the United States, businesses often encounter problems “independent contractor” and “employee” designations.
Employees tend to have more legal protections and access to benefits than independent contractors. A company that misclassifies an independent contractor as an employee has risk exposure—independent contractors often have legal standing to sue for employment benefits, if they feel they have been misclassified. A lawsuit may trigger back-pay taxes to local and national regulatory agencies.
Unknowns can be challenging to navigate.
“The reality is that location independent businesses and teams are going to be 100% living in the gray area from a regulatory standpoint,” says Bobby Casey, a nomadic entrepreneur who consults on asset protection strategies.
“I imagine it like this: There’s this box which specifies how you need to work. If you don’t fit inside this box, then you’re going to be in a gray area from legal, compliance, and tax perspectives.” - Bobby Casey
This gray zone is a natural consequence of working through a new system but working outside the box therefore means a particular responsibility to ensure that the situation is managed properly. No matter how well-intentioned, thoughtful, or careful you are, there’s always a risk that you’ll make a mistake—it’s tough to keep track of how laws are changing at local, state, province, and country levels around the world.
Even still, the benefits of a more engaged work culture, access to global talent, and happy workforce are worth pursuing. As with any other open source or collaborative movement in the private sector, teams need to work within constraints while thinking outside of the box. Look at this process as innovating—you have a hand in architecting the economy of the future.
Consider All Aspects of Entity Selection
We’re not lawyers, tax experts, or accountants. We can’t give you legal or financial advice, and we’d be wrong to offer prescriptive advice with steps to take for your business. The fact is, if you’re building any business, you’ll need to work with a specialized team that consists of lawyers, tax experts, compliance experts, and finance leaders, regardless.
However, we’ll give you an idea of the challenges to anticipate and questions to ask. We hope that sharing our own experiences we can contribute to your process of structuring your business as you build your remote team.
Every business has unique considerations with respect to the type of entity it is and the types of models that are best suited to support operations. Entity selection and employee structures go hand-in-hand. Navigating this judgment call can get complex, which is why you’ll need to work with lawyers and tax experts from the start. Before working with lawyers, it helps to have a vision for what you want to build which explains:
Where your employees will be
Where your customers are
What types of industries and markets that you serve
Where your strategic partners are located
What access to capital, investment, and/or financial resources you’ll need
Where your founders and the bulk of your team are citizens
This blueprint will help you identify the exact legal, tax, and regulatory resources that you need to determine your best path forward.
The first decision you’ll want to make is where to incorporate your business. From a city, county, and national perspective, options may seem endless. Ultimately, you will want to choose a location that offers enables your business to build its core infrastructure—bank accounts, payment processors and access to capital – as well as offering competitive tax rates.
Some traditional offshore countries like the Cayman Islands have been popular for international businesses, particularly ones that do not have a clear fixed base. Naturally, you should ensure that any structure chosen should be fully compliant with tax and regulatory viewpoints.
These offshore structures, however, lead to practical problems, including for payment processing. “If you go to an offshore jurisdiction, your payment processing becomes significantly much more complicated,” says Casey. “You can’t really get a decent merchant account for an offshore company. My recommendation, from a business structure standpoint, is to work backwards from the payment model—first determine how you get paid and then create the entity that aligns with that solution rather than the other way around.” This is a critical matter as all businesses need cash flow to survive, and if your structure heightens the practical risks in the payment system then you have a problem.
In addition to this, offshore companies may not even offer the tax advantages they once did. For digital companies one of the advantages has historically been the lack of sales tax/VAT. However, in recent years there has been a general move away from taxing at the country of the supplier to taxing at the country of the customer, for example the EU recently introduced a system whereby digital suppliers must charge VAT according to where the customer was based, regardless of where the company was based.
In addition to this, the overall corporate tax rate has reduced in recent years, with major countries like the US and the UK significantly reducing their rates. Furthermore, many countries, like the UK and Belgium offer “patent boxes” or similar incentives for research and IP heavy companies. Overall, the previous tax advantages of these offshore companies are diminishing, and they can also lead to practical problems.
When choosing where to incorporate, it is important to think through the long-term impact of your decision. Tax is obviously a cost and a legitimate factor for a business to consider. However, it should not be the driver – issues like the practical ease of doing business, the general compliance cost in the jurisdiction, and the preference of investors down the line should also be considered.
Having considered all the factors above, Doist decided to use the US as its long-term base.
COO, Doist
We needed efficient payment processing systems, the ability to expand our access to working capital, and to meet the needs of our U.S. workers. The United States is known for having strong business infrastructure, along with a strong degree of trust with entities around the world.
If you’re thinking about incorporating your business in the United States, you have 50 states from which to choose. Each offers benefits and drawbacks from both regulatory and tax perspectives. For instance, states like Wyoming and Nevada do not require corporations to pay state income taxes. California on the other hand, has one of the highest state corporate income tax rates in the country—founders, however, may choose to incorporate their businesses in the state, despite costs, for regulatory reasons, and for the cachet to have a Californian company when approaching angel investors in Silicon Valley, one of the obvious potential sources of capital.
The Doist team chose to incorporate in Delaware. There are several advantages to this decision:
Companies do not need to be doing business in Delaware to incorporate in the state. Some states provide for this and this can lead to complications, particularly for a fast-moving business
Delaware has a well-established court system for companies to navigate
Delaware offers flexibility in terms of how to structure a corporation with board members—shareholders, directors, and officers don’t need to be residents of the state
Investors and venture capital firms tend to have experience in dealing with Delaware corporations, and this experience means that they are comfortable with it and have a natural preference for it
Delaware has a moderate tax regime—if you don’t do business in Delaware, you don’t need to pay a state corporate income tax - but you will need to pay a franchise tax.
Stock shares for Delaware corporations aren’t taxable for people outside of Delaware. This is obviously critical when you have investors in different countries, as they likely won’t thank you if they end up with a tax bill following an internal restructuring.
Forming a company in Delaware has its disadvantages. For instance, some states require businesses to pay franchise taxes in states where they are physically located. However, in the real world there is no such thing as the perfect location. Having carefully considered the matter, it was the view that Doist offered the best option going forward.
No matter where you’re thinking of incorporating, your best course of action is to work with experts in the field. The cost will be worth it to prevent potential problems in the long-run. Do the due diligence so that your entity and business operations have room to expand. Build around your existing needs, and leave room to grow into your long-term aspirations; and while tax is a factor, emphasise the practical issues. After all, if the company doesn’t make money, there is no need to spend all your time worrying about tax!
Remember: start with your customers and how you need to get paid—and work backwards.
Choose Your Workforce Model
It’s easy to use the word “employee” to describe your teammates. But the word, from a legal, tax, and regulatory standpoint is loaded. In the United States and throughout Europe, individuals with “employee” status are subject to concrete and well-defined legal protections. In the United States, companies are required to offer health insurance benefits to employees—for many Americans, there is no other way to obtain healthcare coverage. For this reason, it is important that employers understand that they are using complex legal structures as a means to an end of finding a way of doing business. Your employees (or contractors) should agree with what you are proposing. And if you don’t, you could get into trouble.
Let’s say that you run a company with a remote team across multiple states. You may have full-time independent contractors who are responsible for their own healthcare coverage and taxes. One of the contractors could sue your company if they feel they are entitled to employee compensation. In this scenario, your entity could end up owing back-pay on salaries and payroll taxes. Not to mention, you would need to re-file your annual taxes _and_ pay penalties to multiple local and national regulatory authorities. In the United States, the Internal Revenue Service (IRS) elaborates on the risk of misclassifying employees:
“Classifying an employee as an independent contractor with no reasonable basis for doing so makes employers liable for employment taxes. Certain employers that can provide a reasonable basis for not treating a worker as an employee may have the opportunity to avoid paying employment taxes. See Publication 1976, Section 530, Employment Tax Relief Requirements for more information. In addition, the Voluntary Classification Settlement Program (VCSP) offers certain eligible businesses the option to reclassify their workers as employees with partial relief from federal employment taxes.”
For all the reasons above, it is important to give careful thought to the way that you structure your workforce.
Here are three potential options for models:
Everyone is a contractor
What this means is that all team members are technically self employed. All contractors are responsible for filing our own taxes with the appropriate regulatory bodies, no matter where we are in the world. Contractors are responsible for obtaining their own health coverage, which tends to only be a challenge in countries like the United States, where the people are dependent on their employers for insurance.
According to the Internal Revenue Service (IRS), independent contractors and employees have the following distinctions:
| Independent Contractor | Employee |
|---|---|
|
|
In the United States, for instance, the IRS can help employers determine the status of their workers by using Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. IRS Publication 15-A, Employer's Supplemental Tax Guide, is another resource that businesses can use. Independent contractor laws also vary by city and state. A top court in the State of California, for instance, has made it tougher for employers to classify workers as independent contractors.
“The ruling is likely to lead many employers in California to immediately question whether they should reclassify independent contractors rather than face stiff fines for misclassification, employment lawyers said,” in an article for the Los Angeles Times.
Companies that choose this model will need to avoid risk through transparent communication with team members.
Everyone is an employee
This model is ideal for companies that want to hire out of specific, pre-designated countries. The idea is to create a business entity in every country in which they plan to recruit employees. This option is the safest, as it protects businesses against potential liability exposure in countries like the United States that requires employers to follow strict compliance procedures with respect to local laws. Essentially, you’ll need to establish your entities—and then hire everyone as employees through those entities.
The benefit of this model? Companies can hire from all over the world, without any meaningful risk of reclassification. The drawback? With this model, the team you build is not truly-remote first—you are still limited in terms of where you can source talent. The barrier to entry—establishing multiple entities—may be too high for early-stage companies to begin and sustain recruiting efforts. Companies, as a result, limit themselves from recruiting talent from all over the world.
One company that follows a similar model is GitLab, a global technology company that provides a DevOps lifecycle tool for wiki management, issue-tracking, and pipeline features for continuous integration and deployment using an open sourced license.
GitLab has established entities and payroll in all the countries on this publicly accessible list, which it routinely maintains. The company also maintains a list of countries from which it will not and cannot hire. You can access these guidelines here.
Hybrid models
Another solution that remote-first companies can consider are workforce models that balance risk with scale. For instance, one option is to establish an entity in the United States for American employees and hire others as independent contractors. This way, companies can meet the needs of its workforce without exposing its organization to unnecessary risk—especially with respect to the IRS and United States taxation system.
To better understand how these hybrid models work, take a look at this resource that Buffer compiled in 2016 on its Inside Buffer Blog. Since its inception, one of the company’s values has been to maintain transparency with respect to hiring and workforce management. In this blog post, Buffer compares the salaries, expenses, and financial setup of 6 remote team members. This resource will equip you with ideas for how to compensate your own team.
Whatever model you choose, it should reflect the reality. If your company micro-manages the people working for it, then the element of control being exercised suggests that they shouldn’t be treated as a consultant. If a worker is given flexibility as to how and when they complete major tasks then this would mean they are more likely to be a true consultant, particularly if they are using their own equipment and are permitted to work on other (non-competing) projects. Either way, the line to be drawn is a fine one, and you should carefully consider all angles before proceeding. You should be clear with your workers – for example if they are a contractor they should be in no doubt that they are responsible for filing and paying taxes.
Work with Team Member, Individually, to Meet Their Needs
In location-dependent, non-remote first work cultures, it’s up to employers to manage operations for payroll, finance, and compliance. There are clear guidelines for payroll taxes to pay and entities to which companies need to file documentation.
But if you’re hiring people all over the world, employees are going to have different needs. As an employer, you may not be _legally_ responsible for meeting these needs. From a values perspective, it’s also important to support the people who are building your business to lead meaningful lives.
The most critical step that a company like Doist can take, to balance risk with the rewards of becoming a global-first company, is to establish a clear line of communication with each member of the team—and with candidates during the hiring process. Finance, legal, and tax teams, as part of the company recruiting and onboarding process, need to work with every individual to ensure that they understand the operating model of your company. In most cases, that means bringing in outside experts—lawyers and finance leaders—to working with each individual.
The Doist team takes extra steps to be explicit about its workforce model. Exceptional candidates have turned down offers based on the company’s workforce structure model, simply because the independent contractor model does not work for them. Transparency and empathy are essential for equipping humans to do meaningful work.
Senior Financial Analyst, Doist
Most of us are hired as independent contractors. My biggest priority is to facilitate open dialogue with our executive team in ensuring that they have a dedicated stream of knowledge. Even though I work in corporate finance, I’ve personally hired an accountant to help me navigate the gray areas of the model that we’re navigating. Some accounting rules haven’t caught up with technology and the way that companies operate now. Beyond the research that I do for my own needs, I am constantly working with compliance, legal, and finance experts to meet the needs of people within Doist as a whole, to create a process that’s right for every single person on the team.
Because there are so many intricacies involved, it’s important to bring on the right location-specific advice for each employee. Each team member matters. Set up a system that’s right for each person rather than a blanket process that works for everyone.
Be Clear About Necessary and Nice-to-Have Benefits—and How These Benefits Are Evolving
People look to their jobs for more than money. In the United States, for instance, employees receive benefits packages that include retirement plan contributions and health insurance. If your business is headquartered in Europe but you’re hiring in the U.S., it’s easy to take for granted that your employees will need to gain access to healthcare. But in the United States, healthcare costs are exorbitant, non-employer coverage is challenging to access, and private health insurance plans are expensive. The last thing that you want, as a company with strong values, is to have a teammate on board who may be one bad day—and accidental slip on a banana peel—away from bankruptcy.
Remote work cultures have the added benefit of helping employers rewrite the rules of work. For instance, a long-standing challenge in the United States is that labor unions are losing their influence. Workers are having trouble enforcing their rights—and as a result, they’re less likely to remain loyal to their employers. Especially in the tech industry, turnover is high. That’s a problem for leadership teams that are seeking to prevent turnover.
If your company is in a position to hire a global workforce, your leadership team is also in a position to rewrite the rules of how businesses treat their employees. In addition to offering standard benefits such as health insurance, you can also consider introducing programs that are tough to find in location-dependent businesses. Companies need to give careful attention to the following:
Structuring holidays, paid leave, sick leave, bereavement and health benefits. Options include unlimited policies, flexible paid time off, and standardizing these policies to the country that has the strictest criteria.
Currency of compensation. Options include paying everyone in a single currency or adapting to the currency of the local region.
Precise steps for how team members can receive cash payouts or expense their benefits to their companies. Above the “what,” make sure to prioritize the “how,” so all team members are all on equal footing.
Transparency into new, in-discussion initiatives, in addition to their timelines. This step will ensure that all teammates have an opportunity to contribute to the discussion.
Availability of training and company-wide training opportunities. According to a recent study from Northwestern University there is a strong correlation between a nation’s wealth and on-the-job learning. Soft skills and the ability to continually learn at work play a role in a nation’s economy. It’s up to companies to ensure equal access to learning opportunities.
Policies for parental leave. Having clear paternity and maternity leave policies will ensure that new parents feel safe taking ample time off.
For a concrete and in-depth list of benefits, take a look at software Basecamp’s employee handbook, which is public. The company explains its practices for medical insurance, dental insurance, vision insurance, flexible spending accounts, policies for paid-time-off, parental leave, summer hours, sabbaticals, retirement plans, fitness allowances, community supported agriculture allowances, charitable gifts matching, office set-up, a co-working space stipend, and expense account.
Here are Doist’s benefits and processes at a glance:
| Structuring holidays, paid leave, sick leave, bereavement and health benefits | 40 days off/year for everyone - inclusive of any holidays in your country you want to take off. |
|---|---|
Currency of compensation. | Doisters are paid in their local currency via a tool called TransferWise. |
Precise steps for how team members can receive cash payouts or expense their benefits to their companies. | Doisters invoice the company once per month and submit these invoices and expenses via ZohoExpenses on the 15th of each month for Europe and the 25th of each month for every other country. Payments are direct deposited into your bank account several days later via TransferWise. |
Availability of training and company-wide training opportunities. | Monthly stipend for education and learning. $2000 every two years for conferences. |
Parental Leave |
|
Always remember that your company is in a regulatory gray zone—never take any team members for granted. When teams are scattered around the world, the onus is on leadership to ensure that everyone feels valued. Because your company is in a regulatory gray zone, you also have the potential to be the change that you want to see in the world. Remote-first companies have the opportunity to lead by example.
At Doist, the leadership team continuously seeks new pathways to empower employees to enjoy their work, feel committed to the core business, and improve their lives. Because we are a location-independent workforce, we are continuously seeking ways to offer more than what we believe to be our best.
“Right now, we’re looking at different forms of profit sharing,” explains Michelle. “At one point, we were looking at using tokens, or some kind of blockchain technology to manage that. But then, the regulations became complex with respect to being considered a security and triggering dividend payouts. A profit-sharing model is something that we haven’t quite figured out but continue to circle back towards due to our commitment to the idea.”
Reduce Human Resources Risks
At a basic level, leadership needs to create a culture of openness where team members feel comfortable bringing up their needs. That means taking extra effort. Ongoing discussion, with mutual respect and support, can smoothen out problems before they have a chance to bubble up. The simplest thing that company leaders can do? One approach is to maintain a live company handbook, similar to a Git repository. The way that companies manage code can also be helpful in managing people.
To see what a global employee handbook could look like, browse through Basecamp's. The company’s aim is to ensure that all teammates have access to the same policies and information, anywhere in the world.
“For over 10 years, we didn’t have a handbook. In those 10 years, when a new person joined the company, they were expected to figure things out for themselves. But when we grew from a company of 10, 20, 30 employees to a company of over 50, our “introduction by immersion” style stopped working. New hires felt lost and isolated, and their first weeks or even months on the job were stressful because of it. It can be unnerving to join any company, but perhaps Basecamp in particular, given how different some of our practices are. There’s as much to unlearn as there is to learn. Prior to this handbook, navigating that path was both somewhat random and almost entirely oral. For a company that prides itself on clarity and writing, that just wasn’t right.”
The handbook covers:
What the company stands for
What influences leadership
How to choose words
Where everyone works
Benefits & perks
Rituals
International travel guides
FAQ and more
Along these lines, Buffer has also made its salaries public.
“Pay transparency has absolutely helped boost trust and morale, and productivity in general,” says Hailley Griffis, Head of Public Relations at Buffer in an interview with the LinkedIn Talent Blog. “Workplace happiness is something that we see in a lot of our employee surveys, too.”
One of the biggest HR risks that location-dependent businesses face is interpersonal conflict. That’s one of the reasons the human resources function exists—to prevent the potential for people-focused arguments, and lawsuits, before they have a chance to bubble up and disrupt core business operations. Employment related lawsuits can be a major resource and morale drain for companies. According to research from Bloomberg Law, employment related lawsuits have risen 400 percent in the last 20 years. One of the simplest ways to reduce the potential for a lawsuit is to enforce a culture of open communication.
Location independent businesses aren’t immune from legal risk. In fact, in businesses with remote teams, problems have the potential to bubble up because people can’t talk face to face. Not to mention, communication styles often vary between cultures, which could create the potential for culture clash. Your company—and your values—are creating the common ground for people to work with and relate to one another.
One solution? Invest in training for business communication, for all employees. Emotional intelligence, especially across culture, requires teaching.
An unhealthy culture has the potential to destroy team morale. It’s challenging for people to stay self-motivated—or feel safe when a challenging situation arises—when there is frustration or conflict. Workplaces, remote ones included are at their core, private and contained social networks. Studies have shown that social networks are a significant contributor to stress. In remote work cultures, when interpersonal conflict arises, work stops getting done.
The best way to avoid HR risk, and the possibility of a lawsuit, is to stop conflict before it has a chance to arise. Instead, help people feel supported, with a clear pathway to communicate needs and frustrations.
“We’ve spent a lot of time trying to figure out how to solve the dearth of natural organic communication,” explains Kyle Block, Research Manager at Gradient Metrics, a geo dispersed company across New York, Philadelphia, Paris, Amsterdam, and Prague.
Research Manager, Gradient Metrics
We had a lot of structured time to collaborate and work together. But we did not have any of the watercooler chat. We realized that for many of us, that’s what we liked about work. So we ended up just scheduling weekly pulse checks where there's no agenda. We video chat. Would it be better and more natural in person? Probably. But we've been able to develop relationships that are not specific to a task or a project and still kind of maintain the independence that we are looking for in this type of work. And then we do have by annual in person session, that's where like we really come together. We try to use those weekly pulse checks to keep the in person energy alive until the next reunion session in six months.
Beyond creating pathways for communication, an extra step that leaders can take is to be mindful about their own attitudes. Negativity is a part of human nature, and many work cultures are accustomed to strict HR policies around working hours, reporting structures, and feedback loops.
“It’s fascinating because remote work has come so far but hasn’t,” explains Lydia Bowers, People and Culture Lead at Spyce, the world’s first robotic kitchen, based in Boston, Massachusetts.
People and Culture Lead, Spyce
I had a conversation with a co-founder I was giving advice to. He felt very strongly that if he couldn’t see his employees in person, then they weren’t working hard enough. There’s a mentality that exists--I hate to call it--but that “butts in seats” is a reflection of someone’s commitment to their job. This attitude is antiquated. You want to think more about commitment in terms of what they’re actually producing and what’s getting done.
Give your teammates the benefit of the doubt. Praise them publicly. Expect the best from them. If they need time to decompress or take care of themselves—honor the request. Don’t let negativity create business risks that do not need to exist in the first place. Here are a few steps that remote work cultures can preemptively take to reduce HR risk:
Create an employee handbook, which outlines a code of conduct, as well as guidelines to follow during moments of frustration.
Establish, and reinforce, cultural values that give every team member the benefit of the doubt.
Participate in frequent check-ins with teach team member, so that people feel happy, confident, and comfortable being a part of the overall culture.
Ensure that all team members have transparency into people operations decisions—and understand that HR is on everyone’s side.
Hire a people operations consultant, with experience working with global and remote teams, to offer neutral, independent perspectives, when situations of conflict arise.
Document conversations, in case miscommunications have the potential to arise. Collaboration tools like Twist can help, so there is always a written record of conversations. If an issue were to arise, this record-keeping can be helpful for evaluating the source of the problem.
Create Systems to Monitor Legislative, Regulatory, and Tax Changes
Setting up the infrastructure for your remote work culture isn’t a ‘one and done’ task. Regulations, from legal, finance, and tax standpoints are in a perpetual state of change. Given how rapidly technology is evolving, evolution is likely to accelerate. For instance, many employers in the United States are unaware that the State of California created new guidelines for independent contractors, that are stricter than the criteria established by the United States Federal Government and court system. Evolution is happening at local, state/province, and national levels, all the time.
It’s impossible for a single set of human eyes—or even a small group of people with expertise in these functional areas—to keep track of never ending moving parts. It’s important to do so, however. Beyond making sure that your business is compliant, it’s important to stay on top of.
There are a few steps that you can take to remain aware of changes:
Ask your law firm to monitor changes. Many established law firms have international practices and partners with whom they regularly collaborate. These companies often set up mailing lists for clients, with alerts that flag changing regulations.
Work with a tax or compliance consultant in markets in which you hire. When you choose your ideal partner, seek out firms that monitor changing legislation—perhaps through subscriptions. Ask if it’s possible to receive alerts with changes.
Automate as much of your tax and payroll infrastructure as possible. Many bookkeeping and payroll platforms have in-house teams that monitor changing legislation around the world. The QuickBooks team within Intuit is one example company that employs a team of in-house experts to monitor changes. Read this article for instance, to learn how Quickbooks is monitoring recent changes to the Wayfair Decision, which is legislation around tax law in the United States.
Follow the companies you admire. Most companies with remote-work cultures are passionate about knowledge sharing and are themselves, taking steps to stay ahead of risks. If you have a question and you notice a peer company navigating a similar challenge, reach out and ask for help.
Teach employees how to monitor changing legislation within their cities. Encourage them to be vigilant about changes and to seek help, as early as possible, when possible. At Doist, for instance, all teams will jump in to share trends that they are observing.
Senior Financial Analyst, Doist
Anyone on the team is welcome to share feedback, no matter what position they hold in our company. If someone has read something about employee classification or regulation in a particular company, they have a pathway to voice this change. We are all running as a collective machine, which affects everything. At our quarterly meetings with the executive team, we are able to showcase and talk openly about anything we foresee being a problem.
Conclusion
At Doist, we believe that it’s worth it to put in the hard work of navigating gray zones—and doing our best to stay on top of potential challenges. The risk is worth the reward.
