Similar to hiring employees in other states, the company would need to make sure that it is properly set up as an employer for that foreign jurisdiction prior to hiring the foreign individual as an employee. Oftentimes this may result in foreign tax and other obligations for the company. As a result, employers generally partner with an international professional employer organization (PEO) that can serve as the employer of record for foreign employees. Some other companies decide to onboard foreign workers as independent contractors, but please note that this may create misclassification risk if the worker is performing work that would otherwise be performed by an employee. Assessment of whether a worker can be properly classified as an independent contractor will depend on the laws of the foreign jurisdiction in which the worker is based.
Also, companies should make sure that any employment or consulting agreement complies with the laws of the foreign jurisdiction in which the worker is based. For example, there are U.S. law employment concepts like “at-will employment” that are unique to the US, and other jurisdictions may have more stringent requirements as to assignment of ownership of work product created by employees or consultants.