The idea that remote work is a solution to immigration is also a meme on Twitter. I'm not sure I understand it.
A San Francisco tech company can employ developers in Krakow to work remotely without dealing with visas. But those developers either need to be 1099 contractors, or loaned out from an outsourcing firm.
Both options are poor. Outsourcing firms for obvious reasons (introducing a middleman that serves no purpose whatsoever except to serve as a legal fig leaf). 1099 because (a) it creates a second class of employee and (b) because it's technically unlawful to classify full-time employees as contractors.
Just because someone is on a different kind of contract (say a monthly retainer paid by wire, versus employee of US company paid with direct deposit) doesn't mean you need to treat them differently. Every "Automattician" at Automattic is viewed the same regardless of how their employment contract happens to work, and as you scale larger you can set up subsidiaries overseas to directly employ people. (We look at this once we have about 5 people in a given country.)
Also remote work doesn't mean overseas, there is amazing talent all over the USA too that doesn't happen to live in the SF area.
I really liked this sentence: "The US has less than 5% of the world's population. Which means if the qualities that make someone a great programmer are evenly distributed, 95% of great programmers are born outside the US."
There are about 7 million people in the Bay area, 322M in the US total, so let's say 98% of the great people in the US are born outside of Bay area. There are no visa issues moving between cities or states in the US, but many many other barriers that have nothing to do with visas.
How are you handling the tax implications of foreign workers? Are you doing something to withhold FICA/FUTA? I'm doing some research and I don't see the exception that says that workers that would otherwise be classified as full-time employees can instead be 1099 contractors simply because they're foreign; on the contrary, the SSA seems to say that you're required to ensure that foreign employees obtain social security numbers.
I'm not a lawyer, but I am an employer, and it is not clear to me that the "1099 remote worker" strategy is as clean a solution to the immigration problem as it's being made out to be.
> the SSA seems to say that you're required to ensure that foreign employees obtain social security numbers
But you cannot issue Social Security Number (SSN) for foreigner without going through immigration process.
I think the same immigration process that would block employers from issuing SSN would also block any foreign contractor from winning "I was de-facto employee" case in court.
There is a way to get something like a SSN as a foreigner who isn't eligible for immigration. It's called a Taxpayer Identification Number and it does in some way allow you to file and pay american taxes as someone who is not American or in the immigration pipeline, afaik. I have not had or had to use one, though, so I am unclear on the specifics.
I have a relative who snowbirds in the US on the max visitor visa from Canada and she has all sorts of problems dealing with even basic things like cable companies who want a SSN to do tech support for some reason.
I wonder if the tax situation is any easier if you're dealing with US companies & employees who are citizens, but living elsewhere. At least the SSN number would be already dealt with, but there would still be tax implications that would be affected by any tax treaty between the US and the other country.
Those aren't the options people are referring to on Twitter (at least not in the threads I've seen [0]).
It's about hiring US/Canada based people and not forcing them to relocate. Using Slack, Skype, screen-sharing, co-working spaces, etc. to collaborate and stay on top of everything. The kind of companies you see hiring at:
https://weworkremotely.com/
I'm doing it at a great startup now and it's awesome. I've got kids and my wife is in college–I'm not relocating to SF.
Maybe there are intricacies to being in a heavily-funded, high-growth SF startup that prevent this ... I just don't know what they are and PG & sama aren't elaborating on them.
Oh, I think I see. The argument isn't that remote-work makes it easy to hire foreigners without dealing with visas. It's that you don't need to source workers from abroad if you can just source them from Tulsa. Totally valid point!
Thanks. (We're doing a startup from Chicago, with one very, very remote team member.)
A cursory glance at the HN/YC jobs page shows 1 remote-friendly position out of 20+. Why?
I'll admit, people are probably wrongly ascribing bad intentions to PG's essay and sama's related tweets. But that's what happens when you fail to address the other options.
Remote work isn't a solution to immigration, and I'm not sure that was the point of the article.
For me remote is the solution to the so called talent shortage in the Valley. If companies were really interested in hiring the best developers they'd drop their archaic view of remote work and remove location-dicated working.
In all fairness, it would require a major sea change for, say, Microsoft, to get to where they could make remote workers a significant portion of their development staff.
Fine distinctions get lost on Twitter, unfortunately. Your points about hiring people in other countries are valid. Remote work is also an alternative to moving everyone in the US to Chicago, NYC, or San Francisco; I understand that PG's essay was about immigration, but PG is an on-going advocate of people working in the same office due to the "great ideas happen in chance meetings, and those are hard to replicate", which means that that only does he want great programmers to move to the USA, he also wants them to move to cities that are tech hubs.
This is no longer accurate. Some remain "contractors" still officially due to regulatory issues, but we now have employees in multiple locations outside North America. And that list of locations is growing.
Figured this was the case but assumed it didn't changed the gist of the answer too much. tl;dr actually employing people in other countries is difficult
In my experience I have encountered several firms that use oDesk with VERY healthy hourly pay to make up for healthcare benefits, retirement, etc. Equity becomes a mess, but the folks I talked to were definitely not 'second class citizens' in the company, and were just as respected as any non-remote dev.
It may or may not be the case, but when foreign contractor works as a business entity then "Foreign Person’s U.S. Source Income" seems to be irrelevant.
This is an example of what I think is a common and very damaging metafallacy in startup entrepreneurship: the basic business safeguards we don't pay attention to because they don't seem to matter until our companies get big.
But these are some of the worst problems, because they submarine. You pour the money, sweat, and (most importantly) time into an enterprise, risking its total failure. You stick with it, your company gets its footing, you're poised to see a return. Then bam, disaster: some stupid thing you weren't careful about when you were 4 people explodes, counterfeiting your success.
You'd have been better off it exploded when you were just 4 people big. You'd have known you were screwed, and could have saved yourself the time and energy, and used the opportunity to move on to something that had a chance of succeeding. Instead: you lose 90-100% of your outcome to a lawsuit.
There is no reason to sue struggling startup, because if you sue for too much then the startup would simply fold.
That's the main way startup protects itself.
Struggling startup usually does not have funds to lawyer up.
BigCo on the other hand is a very attractive target, but has funds to lawyer up.
If struggling startup successfully transitioned to BigCo then potential exposure from past shortcuts is small (relative to BigCo revenue).
How could "contractor vs employee" shortcuts applied in 4 people startup be a significant problem for BigCo (which already transitioned into lawyered up way of doing business)?
A San Francisco tech company can employ developers in Krakow to work remotely without dealing with visas. But those developers either need to be 1099 contractors, or loaned out from an outsourcing firm.
Both options are poor. Outsourcing firms for obvious reasons (introducing a middleman that serves no purpose whatsoever except to serve as a legal fig leaf). 1099 because (a) it creates a second class of employee and (b) because it's technically unlawful to classify full-time employees as contractors.