Remote Startup: Part 1 - Legalities & Logistics
This playbook isn’t here to convince you to become a remote company. You probably already know the pros and cons, as this topic has been covered at length across the world wide web.
What’s evident is worldwide talent is invaluable when building a startup in a niche domain such as fintech & web3. With such a shortage of engineers, product managers, compliance specialists and marketeers with specialised experience and interest in this new area, startups have to look for talent outside their own countries and adapt to a remote, flexible or hybrid working frameworks.
In our three part series we’ll cover the following:
- Part 1, Legalities & logistics (this article), will take a deep dive through the legal, logistical and other critical aspects of managing a remote workforce in 2022 and beyond.
- Part 2, Policy & Tools, will look at creating a remote working policy and communicating this with your team. It will also include a handful of tools that may be useful for your team.
- Part 3, Remote culture will touch on important considerations when building and maintaining your startup remote culture.
Focus on what’s right for your start-up
Running a business in 2022 is very different from the pre-pandemic years. The tech is available, the processes have been tested and expectations have been set. Today, many employees believe remote working should be the norm.
But in-person connections still play an invaluable role. At Luno, we believe that our business is built on the strength of our relationships with each other. That’s why in 2021 we launched a new working approach: ‘Remote but Reachable’. Under our new framework, Lunauts are free to work remotely, but come together “in-person” at least once per quarter — although our workplaces are open for them to use as often as they want. This is our way to balance the flexibility, the lack of commute, the additional time spent with families or passion projects that we’ve learnt to value during the pandemic, with more deliberate, thoughtful interactions with each other. Luno’s approach shows that, when it comes to remote working, one-size-doesn’t-fit-all. So don’t think you should go all in just because everyone else is doing it.
Take your time to experiment and find the right level of flexibility that works for your organisation. It’s the only way to become the best remote company you can be.
Legalities: check the law
So you’re a UK company, and have found an amazing engineer in India. Perhaps you’re an Australian company needing a product manager in the US, or the reverse. Can you legally hire them? Which laws will apply, the ones of the country your company is based in, or the ones where your future employee resides? What else do you need to consider?
Assuming you’re familiar with the employment laws in your country, you should get acquainted with the employment rules in your employee’s country of residence.
But there are other legal aspects for you to consider:
A. Check if you need a legal entity in the country you are hiring
Some countries require you to have a presence in the country where you hire your remote workforce. Setting up a legal entity requires considerable effort and is time consuming. There are platforms like Remote and Deel that can help you take care of the paperwork — but that will come at a cost, of course.
B. Clarify where your employees can work from
Let’s say you’ve employed someone from the UK, does it mean they need to work from there? Or are they allowed to work from anywhere? You want to understand if there are tax implications for you and your employee if they stay out of their country for a certain period of time.
C. Look for the more remote work-friendly countries
To make-up for lost tourism revenue due to the pandemic, some countries are starting to grant “digital nomad visas”, “remote work visas”, or “freelancer visas”. If you need to limit your hires to a certain number of countries you should start with the most remote work-friendly nations, such as Portugal, Mauritius or Bali, as they’ll offer you a larger talent pool to choose from.
These types of visas make things easier for your HR team as they are required to ensure employees can legally work from their country of choice. Otherwise both you and your employee could be subject to penalties.
D. Avoid legal headaches with clear employment contracts
In case of dispute, there is no ‘hard-and-fast’ rule telling you which code of law applies and when. It depends on a number of factors and ultimately it’s up to a court to decide, especially when there are multiple and conflicting laws.
This handy Global Guide on Overseas Remote Working from international law firm Squire Patton Boggs provides guidance in relation to employment, immigration, tax and social security risks across 19 countries in the world.
Remote Working Legislations
Ultimately, it’s always best to consult a lawyer, who should also help prepare employment contracts that clearly indicate which country’s employment laws should apply in what circumstances.
Logistics: Ensure your company is set up
You’ve nutted out all legal aspects and are ready to transition to a fully remote or hybrid model. Great! But before you do that there are several logistical questions you need to answer:
- Who can work remotely. Is this limited to certain roles? If so, are other benefits granted to those who can’t work remotely?
- Expectations of working hours. Can remote employees choose their own hours or do they need to be online from 9 to 5?
- Preferred comms tools. Zoom, Google Meet, Microsoft Team, Slack, Skype, etc. — what are the comms platforms chosen by the business and how can your remote workforce access them? Which tool should they use and when?
- Best practices to follow. How quickly are they expected to reply to messages? What if the email is urgent? Does anything change if they are in a different time zone? How often do you stay in touch? Research shows the best managers are the ones who excel at frequent and consistent communication.
- Security requirements. Do remote workers need a VPN or follow any form of security process to work on important company files or sensitive data? Can employees work from public Wi-Fi networks?
- Technical support options. What IT support options are available to staff (such as help desk via email or Slack, 24/7 emergency hotline, etc.)?
- Guidelines to set up work environments. Are you familiar with the Health and Safety rules of the country your employees work from? Have you provided them with a home office safety checklist or guidelines on how to set up an ergonomic workstation and ways to avoid injury while working from home? Completing a health and safety risk assessment of your employees’ workspace might also be necessary — this can be done virtually or by the employees themselves.
- Legal rights of remote employees. How can you track remote workers' hours and compensate them if they work overtime? Should they need permission from their managers when working outside certain hours? Remember that remote and hybrid workers have the same rights as in-office workers.
- How to measure productivity. What does success look like? How would you measure productivity across different roles making sure everyone feels their contribution is recognised and fairly rewarded?
- Consider social spaces. How do you replace the traditional ‘water cooler’? Remember that natural settings allow your teams to connect with one another. Slack extensions such as Donut allow staff to arrange coffee dates. Consider virtual games, talent shows, lunch & learns and other ways for your teams to connect — whatever you do, make these optional if you want to foster genuine connections.
The best place to collate answers to all these questions is a clear and detailed remote working policy for all employees. We take a look at pulling this document together in our Remote Startup Playbook - Part 2: Policies & Tools.