1. Decide whether you want to hire a worker in Canada or someone else located internationally
The world is your oyster. With remote hiring, you can hire someone from anywhere in the world, and there are many benefits for doing so. With the internet’s tools, you have unlimited access to diverse individuals with specialized skills. For instance, if you are located in a small town but need to hire an expert in AI, there’s, of course, a much, much larger talent pool outside your home town.
Or you could go the more traditional route and hire someone located in Canada. Logistically, this could be easier regarding employment and tax laws, transactions, and preferred experience or education.
2. Decide whether you will be hiring a contractor or an employee
It would be best to determine whether you will be hiring an “employee” or an “independent contractor” for your job. There are essential employment and tax law differences for both.
If you are hiring overseas and are an SMB (small to medium business), you should generally hire a contractor. If you hire an employee in another country, you could be subject to their laws and their taxes, which will raise transaction costs. The red tape would a burden that takes away from the cost-saving, ease and flexibility of remote work.
On the contrary, if you hire a contractor internationally, you are less likely to be subject to the contractor’s county’s laws and taxes. This is because (1) the contractor is self-employed and may be required to remit their own taxes and also (2) because the contractor likely does not meet the definition of “employee” in their own country and therefore is not subject to local “employment” laws.
However, If you are hiring within Canada, you can safely consider either a contractor or an employment relationship for distance work.
Nevertheless, it would help if you considered a contractor over an employee if you are hiring for piecemeal, project-based work or purely part-time remote work in Canada. Contrariwise, you should consider an employee if you plan on employing someone indefinitely for full-time work remotely.
Generally, in Canada (and with analogous issues in other jurisdictions), it is cheaper, and it requires less commitment to engage a contractor than it is to employ an employee. You do not need to pay regular payroll taxes and other paycheque contributions like EI and CPP for contractors. Moreover, you will not be required to give notice or severance to Canadian-based contractors in case of termination (subject to the terms of your contract).
An employee will always make more sense where the worker will be located in Canada, your project is indefinite, and the worker will be devoting most or all of their working hours to your business.
Likewise, an independent contractor makes more sense where you are hiring for a project with an end date or completing a specific project.
Beware of misclassifying employees as independent contractors, however. Suppose you wrongly classify someone as a contractor even though they are substantively an employee in Canada. In that case, you could be on the hook for all past unpaid minimum entitlements (i.e., vacation pay, overtime, etc.) and payroll deductions or even a costly class action.
3. Determine what platform you will use to find your remote worker
There are several different kinds of platforms you can use to hire a remote worker. There are various freelancing platforms ranging from simple tasks based-hiring to prolonged development-based hiring. For simple tasks, I have genuinely had good experiences with both Fiverr and Upwork (and it is free to search candidates on these platforms). For more significant projects, I have used TopTal (note: TopTal requires a $500 deposit to search candidates). However, the best experiences I have ever had hiring remotely was simply using LinkedIn Premium to message people advertising themselves as “freelancers” who are open to new projects.
Note: Fiverr is no longer just five-dollar work. There are now very experienced and skilled workers who charge hundreds of dollars an hour and do a great job in thousands of different areas. I encourage you to check it out.
Note: TopTal advertises itself as a middleman for the top three per cent of freelancers in the world based on skill tests and customer feedback. However, please don’t take their word for it. In my experience, some of their workers weren’t exactly the top three percent in their field. Indeed, I have had experience with their workers who were closer to the bottom three percent. Nonetheless, TopTal has certain guarantees and may refund you if the work you pay for is terrible.
On TopTal, Fiverr and Upwork, scan candidates for experience and verified reviews. Then, after you have narrowed down your candidates, send them a message (this requires a fee on TopTal) and then arrange to interview them via phone or webcam if they respond agreeing to work for you potentially. But be sure to ask about their portfolio to double-check they have done what they say what they have done. If they say they can’t show you anything they have done, run.
Here’s how to hire someone on LinkedIn, my favourite avenue for remote hiring: Google the keyword you are hiring for (i.e., “blogger” or “SaaS” or “ Illustrator”) and the words “Freelancer” and “LinkedIn” and Google will give you hundreds of results. Scan the results and then draft a boilerplate message explaining who you are and about your project and that you saw they were open to working on freelance gigs, and whether they would consider interviewing for your job. If you send twenty-five messages, you should get about five responses. And with five responses, you might get that one perfect candidate.
However, because LinkedIn is not a freelancer middleman, you will need to arrange your contracts and methods of payment for your worker. PayPal or bitcoin work well for payment, and most people who advertise their services online will be amenable to either forms of payment. In Canada, most people expect Interac transfers. Offer to pay them weekly, not for the whole project. You don’t want to fall victim to a scammer.
Speaking of scams, yes, there are bad workers on all these platforms. However, if you choose to a hire contractor, not an employee, you can test each hire out and then terminate them quickly if they perform poorly. Granted, you might have to hire three of four contractors on a short term basis to find that one perfect hire. Still, there’s little harm except for a few hours of pay. Think of it as a cost of doing business.
4. Draft a contract for your worker and make an offer
You should always make a contract for your employees or your contractors. If you hire an employee on your own using LinkedIn or word of mouth instead of using a freelancer platform like TopTal or Fiverr, you will need to make your own contract. However, if you use a platform like TopTal or Fiverr, you will not need to make your own contract. Those services will act as an intermediary and handle the contract for a fee. However, even with those middleman services, you may still consider preparing a Non-Disclosure Agreement for your potential candidates to sign before you interview them if you are building something for which you want to protect your idea.
Jeff is a lawyer in Toronto who works for a technology startup. Jeff is a frequent lecturer on employment law and is the author of an employment law textbook and various trade journal articles. Jeff is interested in Canadian business, technology and law, and this blog is his platform to share his views and tips in those areas.