He's an Indian citizen--not a U.S. citizen.
I'd appreciate it if you could share any other general best practices with this sort of arrangement as well.
I have established off-shore development relationships with individuals and firms in India, Ukraine, Belarus, Russia and Korea going back to 1996.
You might find it a lot smoother to have them work through an established firm in India that is already set up with all appropriate licenses, tax-reporting, payment systems, and so on.
It can be tricky enough to communicate the software requirements and other specifics of your project without you and them also learning and implementing processes to respect domestic and foreign regulations.
If you'd like more information, feel free to set up a call.
Why are you hiring as an employee? Why not hire as a contractor and let them worry about taxes, etc..
I am also a NY state company -- you have to be careful about W-2 employees versus 1099. I would suggest what others have -- You should hire this guy as a 1099 and make him responsible, otherwise NYS can ding you for SUI, Disability and more -- including international taxes. I would also suggest if you don't have a payroll service or someone who is an expert in payroll then you should use the 1099 path
In addition to what everyone else has said you need to be careful because depending on the nature of his work if you've got an employee over there you could end up with corporate income tax obligations in India as well as the US, which is simply way more trouble than you want to deal with.
