Employment, Payroll, and Benefits
Open Source Collective can offer employment and benefits to projects
Overview
Projects that are hosted by Open Source Collective (OSC) may be able to offer employment and benefits to maintainers and/or contributors. This allows projects to hire contractors or full-time employees and provide access to benefits, such as health insurance or retirement contributions.
How it Works
OSC partners with a Professional Employer Organization (PEO) and an Employer of Record (EOR) to manage employment for hosted member projects.
PEO vs EOR: what's the difference?
PEOs — handles payroll and tax filings. They are the employer with regard to tax filings and accounting but they do not have an employment agreement with the employee. OSC is the official employer. This arrangement is also known as "co-employment" in the U.S.
EORs — handles both payroll services and employment agreements, making the EOR the official employer while OSC handles the operational oversight.
Key Things to Know About Employment
Before rolling out a job, OSC must be consulted to ensure adequate budget, compliance, and proper setup.
Project admins define the role — admins create the job description, decide who to hire (themselves or someone else), and set pay rates.
Projects manage their own internal structure — admins determine work practices and schedules.
Employment costs are covered by the project — wages, taxes, and benefits are paid from the project's budget.
Either OSC or our EOR is considered the official employer, not the project. The official employer will ensure compliance with employment or contractor regulations, payroll, taxes, liability, and other responsibilities.
Benefits: What To Know
For other types of work, projects may hire independent contractors, if allowed by employment laws (see info on worker classification below.)
OSC supports salaried, exempt, part-time, and full-time employees.
Benefits are available to full-time employees (30+ hours per week).
Because we use a PEO/EOR, we can access large group health insurance plans only available to employers. This lowers costs and increases available options.
Employees can decide whether or not to sign up for healthcare or other benefits — the project is only charge if an employee opts in.
Each project decide what portion of benefit costs are covered by the project vs. paid out-of-pocket by employees.
Unlimited PTO — OSC does not track or pay out PTO.
Employee and project admins must agree to OSC's standard employment agreement.
Employees must follow policies outlined in the OSC Employee Handbook, which includes mandatory workplace policies. Since employment laws vary by location, each handbook is tailored to the specific legal requirements of the employee's location. As a result, handbooks may differ depending on where an employee is based.
Retirement & Pension Contributions
In many countries, employers must contribute to retirement or pension plans. OSC and/or the EOR ensures compliance wherever this applies.
In locations without these legal requirements, we work with projects to establish an appropriate policy for the individual and ourselves as the employer.
Associated Costs
The following costs are deducted monthly from the project's budget:
Wages & Taxes
Salaries (amount set by project's), legally required taxes and levies
Benefits
If employee opts into healthcare or other benefits, the cost is passed to the project
PEO/EOR Fees
$49–$99 per employee per month (U.S.), depending on
benefits status. International quotes available upon request
Insurance
Coverage under OSC’s employment liability insurance (typically $250 per year, varies by project type)
Administrative Fee
$50 per employee per month
All costs are deducted monthly from the hosted project's budget. Once employment is set up, employees receive direct deposit payments automatically. Projects must maintain sufficient funds to cover relevant costs for the minimum term of an agreement (for fixed-term employment situations, it may be possible to drop below this threshold toward the end of the contract.)
Worker Classification: Employee vs. Contractor
Worker classification laws prevent worker exploitation and ensure individuals receive the correct protections and benefits.
Some work must be classified as employment, while others are more appropriately classified as contract work.
Regulations vary by location. Because classification is a complex legal issue, we regularly review scenarios with our legal team to ensure compliance.
Terminating Employment
General Termination Policy
OSC is an at-will employer in the U.S., meaning that either the employee or OSC may end the employment relationship at any time. In most circumstances where the employee is not making the decision, termination will occur at the request of the project's admin, who is designated as the employee's supervisor in the employment contract.
In countries outside of the U.S., OSC follows local employment laws regarding termination procedures and notice periods.
If the project or employee no longer meets the basic requirements for employment, such as lacking budget to cover costs, the employment relationship will end.
Where possible, we ask project to give us advance notice, so we can take care of the termination process in a timely manner.
Fixed-term Employment Contracts
Fixed-term employment contracts automatically expire on the specified end date, unless extended.
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