Contractor Offboarding: A Step-by-Step Guide and Financial Checklist

When ending a relationship with a contractor, using the RemoFirst platform ensures a compliant and orderly offboarding. This guide walks you through the process and explains the essential financial and operational steps to ensure a smooth final payment.

Step 1: Deactivate the Contractor

To initiate the offboarding process, you must first deactivate the contractor in the platform.

1. Navigate to the contractor’s profile.
2. Click Deactivate to stop future contract renewals and set the status to inactive.

Step 2: The Final Financial and Operational Checklist

Deactivation is followed by critical steps related to final payroll, compliance, and payment.

A. Final Payroll & Compliance Obligations

The final invoice must include all statutory requirements up to the date of offboarding.

• Mandatory Benefits: For EOR employees, local labor laws require the employer to pay out all mandatory statutory benefits (e.g., Christmas Bonus, minimum vacation days, and vacation premium, as seen in countries like Mexico). RemoFirst ensures these are calculated correctly for the final payout.
• Currency: You will fund the payroll in USD, but the employee must receive their salary in their local currency (e.g., Mexican Pesos, MXN). The final invoice amount in USD may vary slightly due to currency exchange fluctuations.

B. Final Payment Processing and Timelines

Once the final invoice is approved and generated, the following process is initiated:

1. Invoice Approval: You may need to formally approve the final invoice in the platform.
2. Payment Funding: You fund the payroll via ACH in USD through the RemoFirst platform.
3. Use the Payment Request ID (PRID): Crucially, when making your payment transfer, you must include the unique Payment Request ID (PRID) in the transaction description/reference field.
   • Note: Failure to include the PRID requires manual processing by our finance team, which can cause significant payment delays and complications.
4. Processing Timeline: Once the invoice is approved and the funds are received by RemoFirst, the payment is typically processed within 1–2 business days.
   • Be aware that bank holidays (such as May 1st) or individual bank processing times can cause delays in the funds reflecting in the contractor’s account, even if the status shows as 'Paid' or 'In Progress' in the RemoFirst system.
5. Compliance Checks: In some cases, payments may be temporarily delayed due to compliance checks.

By following these steps and ensuring the PRID is included in your transfer, you can help guarantee a timely and compliant final payment for your offboarded contractor.