Why is Co-Employment Risk problematic?

Remote is the only employer in the country where the employee works, so Remote is responsible for being compliant to applicable laws, as provided in the Terms of Service (ToS).

If an employee were considered to be employed by the client, the consequences will vary by country, but in general, the client could be subject to the local employment laws relating to the employment of the employee in the given country and thereto related taxes and penalties.

In practice, co-employment risk is usually materialised in case of terminations where the employee would claim something to both Remote and the client as their co-employers. In such a scenario, if it appears that the claim is related to a default of Remote’s obligations under the Terms of Service (ToS), Remote would be liable to indemnify the client for these.