Hiring International Contractors In California
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Today, it's possible to hire independent contractors from any part of the world, thanks to improvements in technology and communications. It's a great idea to consider Mexico if you're looking to expand your team. Its proximity and strong economic ties to the US are definite advantages.
Residency &Citizenship Neither California residency nor U.S. Citizenship required.
3 options for hiring workers from another country Set up a legal entity. Setting up a legal entity allows you to hire workers directly from another country without relying on an intermediary partner. Partner with a global employer of record. Hire and engage contractors.
The legislature requires this in order to protect the public from unscrupulous and unsafe contractors. Under California Business and Professions Code Section 7028 BPC it is illegal to engage in contracting without a license.
Any citizen of a foreign country wishing to enter and work in California legally first needs to obtain a work visa. These temporary visas allow a recipient to stay for a fixed period of time, and do not confer any citizenship or permanent resident status.
Legal Requirements: California law prohibits hiring unlicensed contractors for projects exceeding $500 in labor and materials costs. Contractor Licensing: Verify contractor licenses through the Contractors State License Board (CSLB) website before hiring.
IRS Form W-8BEN or IRS Form W-8BEN-E Foreign independent contractors must submit IRS Form W-8BEN (for individuals) or IRS Form W-8BEN-E (for entities) to the US company they work for. This form certifies the contractor's foreign status and can help reduce or eliminate withholding tax on payments.
2. Only hire a licensed contractor. Licensed contractors must post a $12,500 bond with the CSLB. You can file a claim against their bond if you have problems with the work they do.
Use the Building Permit Violation Referral form to report any contractor who fails to pull a project building permit for construction activity on an active job site. After completing the form you may attach it to an email and send it to the appropriate SWIFT office.
The change comes from a recently passed law, AB 2622. With the changes, an unlicensed person can complete a project that is up to $1,000 as long as they do not hire workers and no building permit is necessary. Once either of those applies, the job can only be done by a licensed contractor.
