The post did actually talk about contractors:

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3.) Hiring contractors DOES work around some issues, but has its own downsides. First, we can't offer options/stock to contractors and we'd like all our employees to benefit from this. Second, we often can extend the same full time benefits we want all our employees to share such as healthcare, 401K, etc. Put another way: we want all HashiCorp employees to be employees, we don't want to create second class citizens.

Legally, some countries have legal limits on the hours a contractor can work or length of time they can be contracted before they're considered an "employee" by default and regardless of what you SAY the relationship is, the country will consider it employment and points 1 and 2 above all take effect immediately.

So we certainly DO hire contractors but our point of view is that we intend to hire those people full time over time. We'll often hire contractors if we know that we'll have a legal entity established to hire them within X months, and we're up front with the new hire about this. We'll also pro-rate option/stock vesting for their contractor period when they are hired.

> we want all HashiCorp employees to be employees, we don't want to create second class citizens.

This is incompatible with the original Ask HN question. HashiCorp is making arguments against hiring contractors while the OP is specifically asking about contracting (apparently not interested in benefits or stock options, etc)

Why wouldn't they be able to offer stock options to contractors? I'm an EU based contractor for a US (only) based company. I have stock options, as do other contractors and employees. No problem at all, just a bit of paperwork.

I have a friend who is in the same position as you. There is a difference between being employed and being a contractor. Since you get them in the capacity as a contracting person, they dont count as capital gains, but as ordinary salary when you excerce them where you obviously pay all your social security charges and much higher tax rate. At least thats the case where i live (europe). It is up to you though to declare it correctly. Its also logical as you have to do the same on your invoiced money as well.

I hope i didn't spoil it for you ;)

You can absolutely grant stock options to contractors. I have done it for engineering contractors in Eastern Europe who have worked with us for a long time.

Really, they can’t offer stock?

That doesn’t sound right. Maybe they don’t feel it would align the motivations correctly or something?

If I write some software for you and you pay me in stock, what’s the issue? I saw this done quite a bit during Startup Boom 1.0.

You can compensate all those benefits with pure cash.

Btw, you can offer options/stocks to contractors, worldwide.

"we can't" in a lot of times actually means "we don't want to"

It seemed that the OP was about being employed, i.e. W-2, given the mention of H1B visas. There are, of course, often various ways around that with contracting relationships but as the sibling comment notes, that has some limitations. (And, in general, for obvious reasons a company can't just effectively hire an employee and say "they're just a contractor" and skirt all the associated employment rules.

ADDED: On rereading, they do seem to be asking about the temporary remote contracting part. In which case, the answer is probably yes subject to the laws of their country.

There is no 1099 but IRS does have a W8-BEN form that may be required by the foreign contractor to fill out. It is not sent to IRS but for the business to record in case IRS asks.

https://www.irs.gov/pub/irs-pdf/fw8ben.pdf