Many businesses try to hire overseas workers as direct contractors, especially in countries like the Philippines or India. At first, it sounds simple flexible, fast, and low cost. But for companies based in Australia, the United States, the United Kingdom, and New Zealand, this can create serious legal and financial risks.
In countries such as Australia, a worker can still be considered an Australian employee even if they live overseas, are not a citizen, and work remotely. This means businesses may unintentionally trigger obligations related to tax, superannuation, insurance, or unfair dismissal protections. If the worker is misclassified, penalties can be significant.
The same is true for US companies under IRS and Department of Labor rules. Even UK companies face strict HMRC standards for worker classification. The global shift toward remote work has caused many governments to tighten these regulations to prevent misclassification.
This is why partnering with an Employer of Record (EOR) like ZigZag is essential. With an EOR, your team members are legally employed under Philippine law, fully compliant with local regulations, and protected with proper benefits. You maintain full control of daily work, while ZigZag handles payroll, contracts, compliance, HR, onboarding, and offboarding.
Hiring contractors directly may appear cheaper, but when legal risks, worker protection, and compliance are considered, the safer long-term approach is to hire through a structured, compliant model.
ZigZag helps global businesses scale safely, legally, and efficiently without the complications of setting up a foreign entity or navigating complex labor laws.
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