Is that legal?

My company in Ohio using people from different country to do some job (such as web-design). Company communicate with them via phone and email. The only reason to do that is because company can pay $150-300/month per "international employee" (non of them ever been in US). If they hire professional locally they will have to pay at least $20-25/hr for same job.

Is that legal to use people overseas and pay them?

Yes, it is legal, assuming the foreigners are not in a country in which it is illegal for American firmns to trade or do business, such as Iraq or Cuba. We are in a world market now.