How to Ensure Compliance for Non-Traditional Independent Workers

As the way work gets done changes and companies continue to seek high-demand and often specialized skills, hiring managers are tapping workers from non-traditional talent pools. The most notable of these are digital nomads and members of the creator economy.  

Engaging Digital Nomads Requires Extra Attention 

While independent professionals pursuing a digital nomad work style are legally responsible for complying with the laws and regulations of the country or countries in which they work, their clients need to make sure that whoever they hire is indeed compliant. There can be legal and/or regulatory ramifications to the company if a digital nomad is not compliant with regulations in each country, state, and/or region where they are working. It is imperative that they follow the required procedures and policies within your organization to keep every party in compliance. 

First, knowing when an independent you engage is working as a digital nomad is important. This may seem like a no-brainer, but many companies don’t know where their contractors are located, or intend to travel, when working on projects. It is best to include a provision in your standard contract that requires the contractor to notify you if they are traveling while working (even if travel is limited to the US). If a contractor is or becomes nomadic, require their adherence to your digital nomad policy. 

For contractors traveling outside the US, your digital nomad policy needs to specify which countries they can work in without authorization from you. In addition, it should clearly state what the contractor is responsible for providing to you, like: 

• Proof of a visa allowing the contractor to work in the country 
• Acknowledgment that they have insurance that is appropriate to the work they are performing, like errors and omissions and business liability 
• Acknowledgment that they have health insurance, including emergency evacuation services 

To prepare a well-crafted digital nomad policy, the company needs to understand the laws and regulations in various countries. This will help determine the list of “no need for authorization” countries, where the business risk is low or zero. It will also help indicate the types and amounts of insurance that are appropriate for contractors according to country. 

Traditional employees who are working while traveling may present serious compliance risks to their employers. For any employee working outside the US, make sure that you fulfill whatever legal and tax requirements you are responsible for. Further, ensure that you understand the labor laws in the country they work in—many countries have stringent laws protecting employees that the company may need to follow. (A note: According to our 2023 Digital Nomads report, 14% of digital nomads with traditional jobs reported that their employer does not know they are nomadic and an additional 18% say their company does not have a digital nomad policy.) 

Hire Creators Compliantly to Reap the Rewards of Their Special Skills 

Hiring digital creatives—members of the creator economy—is becoming more common as companies want to take advantage of their innovative communication styles and insights into younger generations of customers. Our 2023 Creator Economy report revealed that 64% (about 5.3 million) of income-earning digital creators work part-time in content creation. Almost six out of ten independent creators also have traditional jobs. 

Due to the part-time nature of their work, it is likely that most if not all creators are sole proprietors, and the Department of Labor and IRS are becoming increasingly strict about defining the difference between sole proprietors and employees. The appropriate classification of these workers can bring cost savings to your organization while allowing the worker to work the way they want. Through services within MBOs compliance program, organizations can access this talent while being compliant within the scope of the work.