Where the supply can legally live

Where a contributor physically sits determines four separate things at once: whether they are presumptively your employee, what identity controls you may run on them, what intellectual property you actually acquire from them, and what it costs to pay them. Most operators optimise the fourth and discover the other three later.

This page maps the first three. It is research, not legal advice.

#The EU stops being a supply geography on 2 December 2026

Directive (EU) 2024/2831 hooks on where the work is performed, not where you are incorporated (Art. 2(1)(b)). A Delaware operator with Polish annotators is fully inside it; a Berlin operator with a wholly non-EU crowd is largely outside it. From the transposition deadline, an EU-resident contributor engaged through an algorithmically-routed platform is a presumptive employee and the burden of disproving it sits on you (Art. 5). Art. 3 makes intermediaries jointly and severally liable, so routing through a local BPO does not help. Details are on the classification page.

Three costs follow immediately, and only the first is the one people plan for.

The obvious one is employment cost: social contributions, holiday, notice, and the compliance apparatus behind them, against a sector gross margin that runs 27–33% at Mercor (The Information, via BigGo).

The second is control cost. Art. 7 bans the anti-fraud stack that works — see the fraud page — so EU supply is both more expensive to engage and harder to police.

The third is a governance overhead nobody prices: Art. 8 makes a DPIA mandatory with workers' views sought, Art. 10 requires resourced human oversight with biennial evaluation, and Art. 13 requires a platform with more than 250 workers in a Member State to pay for the workers' own expert in consultations about algorithmic systems.

Spain and Belgium already had presumptions before the Directive. The UK is a separate trap of its own shape: three-tier status where the "worker" middle tier carries National Minimum Wage, holiday pay, pension auto-enrolment and protection from unlawful deductions (gov.uk), with Uber BV v Aslam [2021] UKSC 5 holding that substance defeats contractual labelling [UNVERIFIED — cite from background], and the Employment Rights Act 2025 being implemented across 2026 with a live consultation on merging "employee" and "worker" [WEAK — Lewis Silkin, Pinsent Masons, Littler client alerts].

#Kenya: the extraterritorial precedent

Kenya is where the assumption that layers insulate you was tested and failed. The Court of Appeal ruled in September 2024 that Meta can be sued in Kenyan courts over the layoffs of Sama-employed content moderators [WEAK — Business & Human Rights Resource Centre]; two moderator cases were still awaiting rulings in February 2026 and a judge summoned Meta executives in April 2026 [WEAK — BHRRC; Capital FM Africa]. Parallel litigation opened in Ghana in April 2025 [WEAK — The Guardian].

Then the commercial half of the same story: Meta terminated the contract, and Sama issued redundancy notices to 1,108 Nairobi workers in April 2026 (TechCabal).

The lesson is not "avoid Kenya." It is that a jurisdiction can combine low labour cost, a moderator-trauma precedent, and courts willing to reach the foreign principal — and that if you sit between an AI lab and a Nairobi crowd, you should assume both you and your customer can be joined.

#India: cheap, large, and now regulated on two axes

India is the largest single source of contributors for Mercor and much of the sector. It stopped being a no-obligations geography in November 2025.

The four labour codes came into force on 21 November 2025 [WEAK — The New Indian Express, Moneycontrol]. The Code on Social Security 2020 brings gig and platform workers into the social-security net, with aggregators contributing 1–2% of annual turnover, capped at 5% of amounts paid to gig and platform workers [WEAK — Moneycontrol]. Real-time reporting of gig workers to government was reported in May 2026 [WEAK — MediaNama]. Separately, Karnataka's Platform-Based Gig Workers Act drew a constitutional challenge from Swiggy, Zepto, Zomato, Urban Company, Porter and IAMAI in mid-2026 [WEAK — MediaNama, Moneycontrol]. State-level divergence is now the operative risk, not the central code.

#The IP clause that silently fails in your best markets

This is the failure mode that does not announce itself. There is no error message; you simply do not own what you think you bought, and you find out when a customer's diligence asks.

Germany. Copyright is not assignable inter vivos — §29 UrhG permits transmission only by testamentary disposition or estate partition. What a US-style "hereby assigns all right, title and interest" clause actually buys is an exclusive exploitation right (ausschließliches Nutzungsrecht) under §31. On top of that, §31a gives a revocation right over contracts covering unknown future types of exploitation, and §§32 and 32a give claims for equitable remuneration and a "bestseller" adjustment where the licensee's returns are strikingly disproportionate. Those remuneration claims cannot be contracted away. [WEAK — black-letter, but the statute text could not be retrieved; verify §§29, 31, 31a, 32, 32a and §69b for software.]

India. Under the Copyright Act 1957, §17(c) makes the employer first owner only for work under a contract of service. An independent contractor works under a contract for services, so the author owns unless assigned. §19 requires assignment in writing signed by the assignor, and the statutory defaults bite hard: absent a stated term, an assignment lapses after five years; absent a stated territory, it is limited to India. [WEAK — verify §§17, 19(5), 19(6).]

Everywhere civil-law, plus India. Moral rights of attribution and integrity are generally inalienable; the most you get is a waiver of exercise where permitted [UNVERIFIED].

#The ranking

Judgement, not a source — the underlying legal facts are cited above, the ordering is not.

The Philippines qualifier: no gig-specific statute has passed and POWERR-type bills have been filed repeatedly since 2022 without enactment [WEAK — hcamag; PIDS]. The operative risks there are the DOLE four-fold test and an aggressive "labour-only contracting" prohibition [UNVERIFIED].

#Your real competitor is not another vendor

The comparator a funded buyer actually holds in its head is not your rate card. Offshore headcount allocation rose from 24% to 30% year on year at a stated cost arbitrage of 40–50% (SaaStr on ICONIQ). Nearly a third of funded-company headcount is already offshore, hired directly, at half the cost.

That is the number a services proposal is measured against — not a San Francisco salary. Whatever you charge has to beat an offshore FTE the customer could hire themselves, and the honest answer to why it does is compliance, speed and liability transfer rather than price.

Which is where the tooling arithmetic turns nasty. Deel lists contractor management from $49 per contractor per month, Contractor of Record from $325/month and EOR from $599/employee/month (Deel). At 5,000 contributors, $49 per head per month is $2.94M a year in tooling alone — before a single payout. Per-head pricing is built for staffing, not for crowds. Tipalti's mass-payments product starts at $249/month plus per-transaction pricing and carries the W-8/W-9 and 1099/1042-S workflows that are the actual reason to buy it (Tipalti); Wise Business quotes send fees "from 0.23%" at the mid-market rate (Wise); PayPal Payouts is 2% capped at $1.00 domestically but carries a 3.00% currency-conversion spread (PayPal).

#Where the record is thin