Noor Esposito· Total Rewards Manager, Steinbach Industrie
Asked in Global & Mobility ·
We are a 260-person software company with entities in the UK, Ireland and the US. Engineering wants to hire a principal engineer who lives in Medellin and has no intention of moving. It would be our first hire in Latin America.
The hiring manager's preference is a contractor agreement because it can be signed this week. Finance has suggested an employer-of-record provider at a fee of around USD 600 a month. Legal has said only that both have risks.
The person would work full time for us, attend our stand-ups and report to our engineering director. What have others done for a single hire like this, and how did you handle equity?
4 helpful · 1 insightful · 1 agree · 4 replies · 187 views · 5 following
Accepted answer· by Fiona Quintero
Employer of record, for one hire, every time. We have 23 people in 9 countries on that basis. You get a compliant local contract, statutory payments handled, and a termination process someone local understands. Things to ask the provider before signing: who owns the intellectual property and how it is assigned to you, what notice and severance they will hold you to, and whether they operate their own entity in Colombia or use a partner. On equity, the provider is the legal employer, so check with your plan counsel that your rules allow grants to non-employees or service providers. Ours needed an amendment.
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Victor UedaCEP
Job Architecture Lead, Independent
Full time, your stand-ups, your director: that is an employee in everything but paperwork, and that is how a labour court would be likely to see it. We had a contractor in Brazil reclassified after three years and the back payment of statutory benefits and social charges came to roughly 14 months of pay. I would not use a contractor agreement for this.
Compensation Analyst, Qasr Holdings
Accepted answer
Employer of record, for one hire, every time. We have 23 people in 9 countries on that basis. You get a compliant local contract, statutory payments handled, and a termination process someone local understands.
Things to ask the provider before signing: who owns the intellectual property and how it is assigned to you, what notice and severance they will hold you to, and whether they operate their own entity in Colombia or use a partner. On equity, the provider is the legal employer, so check with your plan counsel that your rules allow grants to non-employees or service providers. Ours needed an amendment.
Reward Partner, Northwind Logistics
Add one question to that list: at what headcount will you set up your own entity? Ours was five in a country. Without a number, you wake up with 30 people on someone else's payroll and a permanent establishment conversation with your tax advisers that you should have had earlier.
People Analytics Lead, Steinbach Industrie
On pay: price the role in Colombia, not in dollars at a discount to your London range. And remember the statutory extras there, which add materially to base cost. The provider should give you a full employer cost sheet before you make the offer, and if they cannot, pick a different one.
