Resource · Hiring Structures
Contractor vs. Employee: What US Companies Need to Know About Hiring in Latin America
Two very different legal structures, two very different sets of responsibilities. Here's what each one means for you.
When a US company hires someone in Latin America, there are two main structures: hiring them as an independent contractor, or hiring them as a formal employee (usually through an Employer of Record, or EOR). The difference matters for cost, compliance, and ongoing responsibility — here's how they compare.
Independent contractor model
The person is engaged as a self-employed contractor, not a legal employee of your company. This is typically simpler and faster to set up, with lower overhead — but the US company is generally responsible for ensuring the working relationship doesn't resemble employment under local or US classification rules (e.g. not dictating exact hours, not providing equipment, allowing the contractor to work with other clients).
Employer of Record (EOR) model
An EOR is a third-party company that formally employs the worker in their home country on your behalf — handling local payroll, taxes, benefits, and labor law compliance. This shifts more of the legal responsibility to the EOR, but usually comes with a higher ongoing cost, often a percentage-based fee layered on top of the person's salary.
How UpHiire's model works
UpHiire places talent as independent contractors, not through an EOR structure. Our flat placement fee covers sourcing, vetting, and delivering your shortlist — the working relationship and its structure is between you and the professional you hire. If you'd prefer ongoing payment handling (you pay us, we pay your contractor on a recurring basis), we can tailor that separately — but this isn't the same as formal EOR employment, and we're not acting as the legal employer of record.
Learn more about how contractor payments work →
See what to include in a contractor agreement (free template) →
Frequently asked questions
Does UpHiire act as an Employer of Record (EOR)?
No — UpHiire places talent as independent contractors. We don't formally employ candidates on your behalf the way an EOR does.
Who is responsible for correctly classifying a contractor?
Generally, the hiring company is responsible for ensuring the working relationship is structured appropriately under applicable classification rules. We recommend consulting your own legal or tax advisor for guidance specific to your situation.
Can UpHiire help with ongoing payments to my hire?
Yes — for clients who prefer it, we can manage recurring payments to your contractor directly. This is a payment-handling service, not formal EOR employment.
Is one model always cheaper than the other?
Not necessarily — EOR services typically add an ongoing percentage-based fee, while the contractor model has lower ongoing overhead but places more of the classification responsibility on the hiring company.
This page is general information, not legal or tax advice. Consult a qualified attorney or accountant for guidance specific to your situation.