The hidden risks of hiring across borders and how organisations can minimise them

Hiring across borders or allowing remote work from another country unlocks global talent and flexibility. Many organisations embrace this as a way to access skills and scale quickly. Yet beneath that promise lies a web of legal, financial and compliance risks. These risks often surface only when operations scale or when regulators request documentation that companies did not expect to produce. Understanding them early can help build a more resilient hiring foundation.

Worker classification is a frequent source of compliance failure

Misclassification remains a major global hazard. In the United States, for example, the ridesharing firm Lyft paid over US$19 million after regulators concluded it had misclassified more than 100,000 drivers as independent contractors.

In Spain, enforcement actions under rider-protection laws resulted in a €79 million fine for a delivery-platform company when couriers were reclassified as employees.

These cases show that what looks like speed and flexibility at the start can quickly turn into significant liabilities when regulatory definitions of employment differ from internal assumptions.

Payroll, benefits, and statutory obligations differ dramatically by jurisdiction

When individuals work remotely from countries other than their employer’s home base, payroll compliance becomes considerably more complex. Each country sets its own tax rules, social-security or statutory contribution requirements and deductions schedule. Mistakes or assumptions that mirror a home-country model often lead to costly compliance failures.

Remote and cross-border work arrangements may also create dual obligations — for example local tax and social security for the employee, and potentially corporate tax or permanent establishment risk for the employer, even when revenue is not generated in that country.

Right-to-work, immigration status and ongoing visa monitoring require attention

Hiring across borders often involves right-to-work and visa requirements that differ significantly by country. These checks are rarely a one-off task. In many jurisdictions, companies must monitor validity, renew permits, or re-verify documents over time. Where companies treat right-to-work checks as a single moment-of-hire formality, they risk falling out of compliance. Independent compliance reviews of international remote work highlight these issues as frequent causes of regulatory breaches.

Documentation and audit readiness are often the hidden failure points

When employment compliance fails, it is often not because decisions were wrong but because companies cannot substantiate those decisions. Audits or legal challenges frequently expose patchy record-keeping, misplaced documents or inconsistent filing.

For instance, worker misclassification lawsuits commonly rely on evidence such as payment records, employment contracts, pay slips, social-security filings or other documentation. Without centralised and well-maintained records, organisations struggle to demonstrate compliance — or even recall how hiring decisions were made.

Remote cross-border work expands compliance risk, often beyond payroll and classification

The shift to remote-first work after the pandemic has added new layers of complexity. Employers must now factor in not only classification, payroll and right-to-work, but also tax residency, social-security exposure, corporate presence (permanent establishment), data privacy, and even cybersecurity or personal-data protection when hiring globally.

These challenges become more acute as organisations scale and diversify their global workforce. What may seem manageable with one or two remote hires quickly becomes harder to oversee when dozens or hundreds are added.

Questions organisations should ask before expanding internationally

Before hiring abroad, organisations should consider the following:

• Does the intended role classification align with local employment law definitions?
• Can payroll and statutory deduction obligations be met under local rules in the hire’s country?
• Are statutory benefits, social-security contributions or other mandatory obligations clearly understood?
• Does the company have processes to monitor visa or work-permit renewals and right-to-work validity over time?
• Will screening and documentation practices match the risk level of each role and conform to local requirements?
• Is there a centralised, reliable system for storing documentation so it remains accessible if regulators or auditors request evidence?

These questions act as guardrails against compliance risk, and help create a stable operational foundation for global growth.

Building a resilient global hiring foundation

Global hiring and remote work offer real benefits: access to talent, flexibility, and geographic reach. But without careful planning, they also expand a company’s compliance footprint.

Organisations that treat hiring across borders as a data-driven, compliance-aware process — one that includes classification accuracy, payroll fidelity, ongoing right-to-work tracking and strong documentation — are more likely to grow with confidence rather than crisis.

This does not abolish complexity. It simply makes it visible and manageable, which is a critical difference when scaling internationally.

Watch the webinar for deeper insight

The full webinar explores concrete examples of classification failures, payroll variation, remote-work compliance challenges and right to work obligations across different markets. For organisations planning expansion, the session can serve as a practical reference to complement regulatory awareness.

{{scaling-globally-without-risk="/components"}}

‍