If you misclassify workers as independent contractors, you might find yourself exposed to accountability for any benefits and protections that were not given to your talent when they worked with you. You could even be liable for paying up to 6 years of unpaid taxes to the government.

If you classify your worker as an employee, you will be required to deduct income taxes and social security contributions from the employee's pay while also making your own contributions to these taxes. As opposed to employees, independent contractors are in charge of managing their own tax payments, including self-employment taxes, which might have various due dates and duties. If you have no legal entity, hiring a remote employee means you'll need an Employee of Record (EOR) which is costly.