Recently, I shed light on the often overlooked disparity in compensation between full-time employees and contractors within remote-first tech companies. Today, I aim to underscore the irony of this substantial and fundamental inequality, which exists in the face of these very companies’ vigorous and commendable pursuit of diversity and equality. These companies, whilst striving to uphold principles of fairness, neglect a fundamental imbalance within their workforce – the disparities between employees and contractors. This inconsistency, bordering on discrimination, deserves attention and rectification.

The unseen inequality

While remote-first tech companies laud their global teams and flexible work arrangements, they often overlook the stark contrast between their employees and contractors. Contractors typically shoulder higher employment costs, receive fewer benefits, and face job instability, amongst other challenges. These issues persist even as contractors and employees perform similar roles, leading to an incongruity that contradicts the companies’ proclaimed commitment to equality.

Diversity beyond borders

Remote-first tech companies have revolutionised the working world, breaking down geographic barriers and creating opportunities for talent worldwide. This approach inherently promotes diversity by enabling companies to hire from a global talent pool. However, the current practice of engaging international workers as contractors, whilst saving on costs, creates an implicit bias. It is more advantageous for these companies to hire cheap labour as contractors rather than full-fledged employees, especially when compensation is based on local cost of living. Beyond that, the fundamental yet substantial disparity in compensation between contractors and employees even across countries with similar standards and costs of living, makes this situation perilously close to discrimination, as it effectively creates two tiers of workers.

Equality in employment

The commitment to equality should extend beyond hiring practices to include how workers are treated once they join the company. When companies ignore the disparities between employees and contractors, they inadvertently undermine their dedication to equality. A truly inclusive work environment should ensure that all workers, regardless of their employment status, have access to fair compensation, job security, and benefits. Anything less than this is not only inconsistent with the principles of equality but also potentially discriminatory.

The path forward: Employer of Record (EOR) services

The solution to this inconsistency lies in the adoption of Employer of Record (EOR) services. EOR providers, such as Remote.com and Deel.com, ensure that all workers receive equitable treatment and benefits, regardless of their location. By adopting EOR services, remote-first tech companies can maintain their commitment to equality and diversity, while also ensuring compliance with international employment laws.

Conclusion

The commitment to equality and diversity in remote-first tech companies should not be limited to words and hiring practices; it should be reflected in every aspect of employment.