Hiring foreign workers in 5 steps + solutions and FAQs

If you’re looking to expand your workforce and find diverse talent, hiring foreign workers abroad can help. Having foreign workers on your team can be advantageous for various reasons, whether remote or in-person, where hiring has become increasingly challenging.

Many US companies are hiring foreign workers because of how beneficial it is, as it means you have more coverage for your business while also retaining great talent. This article will look at what a US company hiring foreign workers abroad needs to know and useful tools such as a Wise business account, which can make it easier to pay remorse employees outside the US.

Steps for hiring foreign workers 👇👨‍💼

Track 1: Hiring foreign remote workers in the United States 1. Research an employers' basic legal obligations when hiring non-citizens to work in the U.S. 2. Understand your hiring options 3. Review the types of visas 4. Start early to recruit and interview candidates 5. Make the necessary preparations within your company 6. Acquire certifications 7. Acquire work visas 8. Verify the tax laws applicable to your company and the foreign worker and comply with necessary tax laws Track 2: Steps for hiring foreign workers abroad 1. Understand the labor and tax laws in the contractor’s country or in your local jurisdiction 2. Obtain the Necessary Certification. 3. Have foreign workers complete IRS Form W-8BEN. 4. Prepare a well-defined contractor agreement that meets the legal requirements of all countries involved. 5. Set a payment scheme for the foreign contractor. How do I pay foreign workers?

Hiring foreign workers: How to do it

For US companies hiring foreign workers, there are a few different pathways that could be the right fit, depending on the employee’s circumstances and what the business is looking to accomplish.

Who is considered a foreign worker?

However, before diving into hiring foreign workers, it’s essential to have some definitions established, as that will decide what pathway your business could take for hiring. For US businesses, a foreign worker is a non-US national working for the company. The employee could be located in the US or outside the US, but they do not hold US nationality or residency.

Are you hiring foreign workers who will enter the United States or will work from abroad?

Now that it has been established who a foreign worker is, the next step is to identify what kind of work is needed from the employee.

Is the foreign worker moving to the United States to work for your business, or will they work from abroad for your US-based business? Where they are located will dictate what steps your business will need to take for hiring.

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Track 1: Hiring foreign remote workers in the United States

For a US company interested in hiring a non-US citizen working for a US company from abroad, here are the steps needed for them to be able to work in the United States,

1. Research an employers' basic legal obligations when hiring non-citizens to work in the U.S.

As an employer, the first step is to evaluate whether the business meets the basic legal obligations for employing non-citizens to work in the US. Businesses must seek certification from the U.S. Department of Labor by providing information about the role, salary, and other details. Once approved, the applicant must be admissible based on the Foreign Labor certifications guidelines for both permanent and temporary positions¹ ².

2. Understand your hiring options

Once your business is certified with the Department of Labor (DOL), having a hiring strategy in place is important. Consider whether the positions are highly specialized or niche, whether you can find talent in the US, or what countries you want to include in the hiring process.

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3. Review the types of visas

As part of your hiring options, it’s crucial to understand the different types of visas available for US companies hiring foreign workers.

• Sponsor a Prospective Employee for a Green Card

You can hire foreign workers with the view of making them a permanent US resident by sponsoring their green card. The process starts with an approved application for Permanent Labor Certification from the DOL. The employer must then file Form I-140, Immigrant Petition for Alien Worker, on behalf of the foreign national with U.S. Citizenship and Immigration Services (USCIS) for the employment-based visa the foreign worker holds³.

• Getting the H1-B Visa

Another option is the H1-B visa, which is a non-immigrant visa classification available for employees working in specific occupations. The H1-B visa is designated for employers that were unable to find talent in the US and therefore hired foreign workers. The visa has strict eligibility criteria, and there are caps on how many people can be given H1-B status, which means it may not always be a feasible option but one worth exploring, depending on the occupation.

• Temporary Work Visas

There are temporary work visas available if the employment will last for a fixed period that is not permanent. These visas can be obtained by filing a petition with USCIS and are issued upon petition approval⁴.

4. Start early to recruit and interview candidates

Once you have identified employment gaps in your business and what kind of skills you will need, starting early is crucial. Finding the right candidate may take time, so start the recruitment process as early as possible and interview qualified candidates. You can work with recruiters or undertake your own outreach, just as posting on job boards to attract talent.

5. Make the necessary preparations within your company

After selecting a candidate and making the offer, you can start preparations within the company to get things in order to extend an offer and sponsor their visa, including getting documents together such as job descriptions, resumes, salary, and more.

6. Acquire certifications

If you are considering hiring foreign workers abroad, starting the process early is crucial. That means getting certifications in order from the DOL and providing all the necessary paperwork. That way, you can extend offers to qualified candidates reasonably quickly and have them employed in no time.

7. Acquire work visas

As part of the visa application, you and the candidate will need to provide information on previous work experience, the industry, the role they are joining and demonstrate how they are uniquely qualified for the role. This will entail pulling together documents used in the certification process, such as job descriptions, company information, salaries, and other information required by the Department of Labor.

8. Verify the tax laws applicable to your company and the foreign worker and comply with necessary tax laws

The United States has tax treaties in place with most countries to avoid double taxation, but doing a check on any tax laws within the US and the employee’s country is good practice. You may also need to check federal withholdings and other information about taxes for foreign workers to ensure you are complying with all laws.

Track 2: Steps for hiring foreign workers abroad

For a US company hiring foreign workers abroad, the steps that need to be undertaken will slightly differ:

1. Understand the labor and tax laws in the contractor’s country or in your local jurisdiction

Before extending an offer to a remote foreign worker, having an understanding of labor and tax laws, including any tax treaties with the United States will be important to ensure you comply with local and US laws. For example, hiring independent contractors in the Philippines can be beneficial for businesses since there are fewer contractual and legal obligations. You will only pay fees based on agreements, which may save you money in the long run.

The Department of Labor and Employment (DOLE) has issued Department Order No. 174, series of 2017 (DO 174), which are guidelines businesses should be familiar with if hiring remote foreign workers abroad. You should also work with the employee to understand local regulations or tax laws that you must be aware of to ensure you are both compliant.

Depending on the foreign worker’s country and the type of offer you extend, you may need to report wage payments to IRS (Internal Revenue Service) if they are a contractor or withhold taxes if they are a permanent employee. However, this can vary, so working with a tax or employment lawyer may be beneficial in the early part of the hiring process.

2. Obtain the Necessary Certification.

You may need to apply for certification from the United States Department of Labor to offer foreign remote workers employment. Similar to the track above, this might include providing information about the role, salary, and other company information.

3. Have foreign workers complete IRS Form W-8BEN.

Once you have found foreign workers you would like to employ, you should have them complete IRS Form W-8BEN. It protects you from being held responsible for any false information the independent contractor may provide the hiring company

4. Prepare a well-defined contractor agreement that meets the legal requirements of all countries involved.

For any non-US citizen working for a US company abroad, having a contract in place is vital. You should ensure that any contractor agreement meets the legal requirements for the US and the foreign worker’s country.

5. Set a payment scheme for the foreign contractor.

When hiring foreign workers abroad, setting up a payment scheme is essential. Paying your contractors on time should be a priority. Using a digital payment platform like Wise business account ensures that you are paying quickly and efficiently while getting the best rates on currency exchange to save money.

How do I pay foreign workers?

With Wise, you can quickly pay foreign workers in local currencies without incurring significantly high costs. Wise has a batch payment tool that streamlines the process of paying foreign workers abroad, so you can boost efficiency while paying contractors in a timely fashion. And with Wise business, you always get the mid-market rate so that you can easily pay suppliers and freelancers across currencies.

Get a Wise Business Account 🚀

Get local account details in 9 currencies
Make low-cost conversions with no hidden fees
Pay workers in 40+ currencies

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Sources:

1. U.S. Department of Labor - Foreign Labor
2. The Society for Human Resource Management - What is the foreign labor certification process for hiring foreign workers?
3. U.S. Citizenship and Immigration Services - How do I sponsor an employee for U.S. permanent resident status?
4. U.S. Department of State - Temporary Worker Visas