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Legal and contractual considerations when hiring remote developers

You’ve got your million dollar idea. Better yet – a billion dollar one. Now, how about you give it to someone who will actually bring it to life and profit from it? Or someone incompetent enough to FUBAR the whole pipeline? Well, that doesn’t sound pleasant at all…
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Either way, it’s a problem that, sooner or later, every entrepreneur faces. You’ve got to find people that know more than you in areas crucial to the success of your business. So, how do you find a developer if you know nothing about the development process and not **** anything up in the process? There’s got to be a way, right?

Yes and no, in a way. You kind of have to get into and understand all of that complex stuff to protect yourself. Hiring remote developers can be a great way to find experienced and affordable talent for your startup, however, it's important to be aware of the legal and contractual considerations involved before you hire anyone.

In this article I’ll walk you through the key legal and contractual considerations when hiring remote developers, and provide some tips on how to protect yourself and your business.

1. Determine the employment status of the remote developer

The first step is to determine the employment status of the remote developer. Are they an employee, a contractor, or a freelancer? Anything in between?


If the remote developer is an employee, you will be responsible for withholding taxes and paying Social Security and Medicare taxes on their behalf (😢). You will also need to comply with all applicable labor laws and regulations.


If the remote developer is a contractor, you will not be responsible for all that sad money and taxes stuff. However, you will still need to comply with certain labor laws and regulations, such as those related to minimum wage and overtime pay.


If the remote developer is a freelancer, they are considered to be self-employed. They will be responsible for paying their own taxes and Social Security and Medicare taxes.

2. Draft a clear and comprehensive employment agreement

Once you have determined the employment status of the remote developer, you need to draft a clear and comprehensive employment agreement. This agreement should outline the terms and conditions of the relationship, including:

  • The job title and responsibilities of the remote developer
  • The compensation and benefits offered
  • The work hours and schedule
  • The intellectual property ownership rights
  • The confidentiality and non-disclosure obligations
  • The termination provisions

It is important to have an attorney review the employment agreement before you sign it. No, your cousin is not qualified to review it. Yes, even though he’s in law school.

3. Comply with all applicable laws and regulations

In addition to the employment agreement, you also need to comply with all applicable laws and regulations. This includes both the laws and regulations of your own jurisdiction and the laws and regulations of the jurisdiction where the remote developer is located.

Some of the key laws and regulations that you need to be aware of include:

  • Tax laws: As mentioned above, you will be responsible for withholding taxes and paying Social Security and Medicare taxes on behalf of your employees.
  • Labor laws: Labor laws vary from jurisdiction to jurisdiction. However, most  have laws that regulate minimum wage, overtime pay, and working conditions. Again, you need to comply with them.
  • Data privacy laws: Data privacy laws are becoming increasingly important as more and more businesses collect and store personal data. You need to comply with all applicable data privacy laws, including the General Data Protection Regulation (GDPR) if you collect or store the personal data of EU citizens.

4. Protect your intellectual property

One of the biggest risks of hiring remote developers is the risk of intellectual property theft. To protect your intellectual property, you need to take the following steps:

  • Include an intellectual property ownership clause in the employment agreement. This clause should specify who owns the intellectual property created by the remote developer during the course of their employment.
  • Use a secure development environment. This will help to protect your code and other intellectual property from unauthorized access.
  • Implement a confidentiality and non-disclosure agreement. This agreement will require the remote developer to keep your confidential information confidential.
  • Pray. If you’re religious. That’ll help.

5. Have a dispute resolution process in place

Even if you take all of the necessary precautions, there is still a chance that a dispute could arise between you and the remote developer. That's why it's important to have a dispute resolution process in place.

The dispute resolution process should be outlined in the employment agreement. It should specify how disputes will be resolved and who will be responsible for resolving them.

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6. Consider using a platform that specializes in hiring remote developers

You can do it! That stuff sounds complicated but is actually pretty straightforward when you get into it. Still, if you're unsure and don’t wanna lose money, friends, hope and time in the process, you may want to consider using a platform that specializes in hiring remote developers. One like, for example. We do the heavy lifting of the hiring process – from the rigorous interview process, to paperwork, to time tracking. And the best part? We love it!

We put our developers through multiple interview rounds to ensure that they're the best of the best. La “crème de la crème” as they say in Portugal. Or Italy. Anyway, we’re devs, not geographers.

Also, we offer a pay-as-you-go model, so you only have to pay for the hours of work that you need.

Need something done ASAP? Our developers are ready to start working as soon as tomorrow. They really are. And you, are you ready to start tomorrow? At or philosophy is not of a marketplace – we try to view ourselves as a mediator between you and your next, full-fledged team member. Drop us a line and tell about your project!

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Begin working with your matched developer right away through a low-commitment hourly or monthly contract.
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