Remote workers in different countries: legal risks of having “invisible employees” outside of Spain
From teleworking to the risk of the “invisible employee”
The normalization of teleworking has had a little-seen but very relevant side effect: more and more Spanish companies have people working remotely from other countries, without their situation being fully regularized.
Sometimes it involves highly qualified profiles moving for personal reasons; other times, it involves hiring specifically designed to work permanently from abroad.
On paper, the model seems perfect: global access to talent, cost reduction, and flexibility.
But, legally, these “invisible employees” can become a serious problem.
Behind every remote worker outside of Spain there are questions about which law applies, where should they pay social security contributions, who is their actual employer, and what responsibilities does the company assume if it does not regularize the employment relationship?.
In Spain, the framework for administrative consequences is the Law on Infringements and Sanctions in the Social Order (LISOS), approved by Royal Legislative Decree 5/2000, which classifies and sanctions irregular conduct in labor and social security matters.
In the area of case law, the Supreme Court has reinforced in recent years the seriousness of the illegal transfer of workers and of the covert forms of labor organization.
Is he really “just” a freelancer in another country?
Many situations of international teleworking They arise from a fundamental misunderstanding: considering that, simply because the professional is outside of Spain, the relationship ceases to be employment and becomes a "collaboration" or independent service provision.
However, if the Spanish company sets the schedule, controls how the service is provided, integrates the professional into its structure, imposes tools, supervises results, and maintains a continuous dependency, the relationship meets the classic indicators of employment according to the Workers' Statute and the jurisprudence of the Supreme Court, even if the worker resides abroad.
If the relationship is employment-based from a material point of view, the company cannot behave as if it were a simple contracting of services.
Failure to register the worker, failure to report their existence or situation, or failure to regularize the relationship in the country of residence opens the door to sanctions both in Spain and abroad.
Social Security and formal obligations: where to pay contributions and who is responsible
The first major risk factor for remote workers in other countries is Social Security.
The general rule in the European Union and in many bilateral agreements is that contributions are made in the country where the work is physically carried out, with exceptions for temporary assignments or cases of cross-border teleworking regulated by specific agreements.
In parallel, the LISOS considers it a serious offense, among other behaviors, not to request the affiliation or registration of workers who enter the service of the company, or to do so outside the deadline, and not to communicate relevant data about the company or its work centers.
In the case of failure to register workers, the LISOS establishes that It will be considered an infringement for each affected workerThus, a team of several "decentralized" developers can multiply the economic impact of an inspection.
This means that a team of several "decentralized" developers can multiply the economic impact of an inspection.
In the context of international teleworking, non-compliance can take several forms:
- Failure to properly analyze and manage applicable Social Security legislation (for example, maintaining social security contributions in Spain without a legal basis or failing to register the worker in the system of the competent country), despite the existence of coordination instruments, such as the Regulation 883 / 2004 and the Framework Agreement on cross-border teleworking (applicable only between signatory States and under certain conditions of teleworking percentage and upon request), exposes the company to claims for fees, surcharges and interest.
- Not analyzing whether, in the absence of such coverage, the worker should be integrated into the Social Security system of the country where he resides, with the consequent exposure to claims for fees, surcharges and interest by foreign authorities.
The problem is not just "where to get paid", but what message is sent to the administrations when a worker appears on payrolls, corporate emails, internal meetings and organizational charts, but not in official records.
Illegal transfer, subsidiaries and shell companies: when the international scheme becomes very serious
To try to avoid risks, some companies choose to more complex models: resorting to subsidiaries, intermediary companies or local suppliers that are formally listed as employers, while the actual management of the work remains with the Spanish company.
This is where the concept of illegal transfer of workers comes into play, traditionally analyzed in national contexts, but perfectly transferable to international scenarios: when there is a triangular relationship between the transferring company and the receiving company and the worker, and the company that appears in the contract is not the one that actually organizes and directs the activity, an illegal transfer can be configured.
Article 8.2 of the LISOS classifies the transfer of workers in terms prohibited by law as a very serious offense, punishable, according to Article 40 of the same Law, with fines of 7.501 to 225.018euros, depending on the grade.
The Supreme Court's doctrine has insisted that these situations are not a simple formal irregularity, but an "illicit trafficking of labor" in which both the transferring and receiving companies are responsible, along with the labor effects in favor of the worker.
When applied to international teleworking, the risk arises when:
- The Spanish company continues to set objectives, schedules and work methodology for people formally hired by another entity abroad.
- Disciplinary and organizational decisions originate in Spain, while the local company is limited to issuing payrolls or invoices.
If the Labor Inspectorate or the courts consider that an illegal transfer has occurred, the problem is not limited to the fine: the worker can claim their integration into the Spanish company, with the corresponding rights and seniority, in addition to wages and pay differences.
“Invisible employees”: how administrations detect them
The expression “invisible employees” describes those who work continuously for a company without being “in view” of the labor and social security administrations.
In the case of teleworkers in other countries, invisibility is usually relative: the digital and documentary trail is increasingly extensive.
The authorities have several ways to detect these situations:
- Exchange of information between tax and social security authorities of different countriesespecially within the EU.
- Complaints from the workers themselvesFor example, after a dismissal dispute or a pay disagreement.
- Contrasts between the company's revenue, the equipment it declares and the operational reality (meetings, access, organizational charts, internal platforms).
When a worker appears who has been providing services from abroad for years, fully integrated into the company's teams, but without proper registration in either Spain or the country of residence, the case can hardly be justified as a "one-off" situation or a minor administrative error.
Reputational impact and blocking of international expansion
Economic sanctions are only part of the problem.
A growth model based on poorly regulated remote employees may influence the company's international strategy:
- It complicates the opening of subsidiaries or branches when, when applying for licenses or authorizations, a history of non-compliance appears.
- It damages relationships with investors and partners who demand strong compliance structures, especially in regulated or high-visibility sectors.
- It generates internal distrust: professionals who make an international leap are usually key profiles; if they perceive legal uncertainty about their situation, turnover and the cost of retaining talent increase.
In sectors such as technology, digital services or specialized consulting —where international teleworking is almost structural— the correct management of these risks is no longer an optional issue, but another piece of corporate governance.
What is the solution?
The answer It is not about prohibiting international teleworking or closing existing teams, but about redirecting them with clear legal criteria.
In practice, companies that want to continue attracting global talent need:
- A case-by-case analysis of the situation of each remote worker outside of Spain: country, length of residence, type of functions, link with the Spanish structure.
- A map of labor, social security and tax obligations in Spain and in the country of residence, identifying applicable agreements, relocation options, maintenance of contributions or integration into the local system.
- An organizational model design that avoids illegal labor subcontracting and clarifies who the employer really is, what functions are centralized and which are delegated.
All of this requires combining knowledge of Spanish labor law, private international law, social security regulations and, in many cases, coordination with law firms in the destination country.
This is not a place to improvise with standard contracts downloaded from the internet.
Conclusion: the cost of invisibility
Having “invisible employees” scattered around the world may seem like a quick solution to attract talent or retain professionals who leave for other countries.
But, from a legal point of view, It is a high-risk strategy: The LISOS sanctions the failure to register and enroll workers as a serious offense, and classifies illegal transfer as a very serious offense, with fines that can be accumulated for each person affected.
This is in addition to the possible claims of Social Security contributions, interest, surcharges, labor disputes, conflicts with the authorities of the country of residence and a reputational impact which could seriously limit international growth plans.
Organizing this scenario is possible, but it requires doing so before the inspection or the conflict with the worker arrives.
For Spanish companies with remote teams spread across several countries, working with a firm specializing in international, labor and social security law is not a luxury, but a basic protection measure: it turns those "invisible employees" into fully visible workers... and legally secure.
