These days, the concept of remote working is a reality in most businesses. In fact, more and more companies now include the option of working from home in job adverts in an effort to recruit talent. But what happens when ‘home’ is located outside of the UK? Or employees request to work from abroad?
Working abroad remotely is not as simple as an employee working in a UK-based location and can have unintended consequences for the uninitiated.
Employers should, therefore, give some thought to a number of legal, tax and practical issues before heading down this road
Subject to approval
Employers should ensure that employees are aware that working from abroad requires prior approval.
This can be achieved by:-
- having a remote working policy in place which clearly states this,
- communicating these policies to the workforce, and
- including a provision in standard contracts which requires employees to notify their employer in good time of any plan to change their home address
Context is everything
Employers will want to confirm a number of factors before it can assess the position, including:-
- the length an employee intends to work abroad,
- the country (or countries) in which the employee intends to work,
- which legal entity will benefit from the employee’s work, and
- whether the employee is seconded to a local entity (or whether their employment is transferred)
Employers will need to consider both the foreign implications and any domestic consequences of the intended arrangement, including the following considerations:-
- Does the employee have a passport or visa that allows them to enter the host country?
- Does this permit them to work legally in the host country?
- Will they be able to return to work in the UK?
- Will the employee benefit from additional protections in the host country and, if so, which ones?
- Are there any mandatory benefits the employee will be entitled to in the host country?
- Will the proposed arrangement trigger any additional pensions contributions?
- Will the proposed arrangement affect any employer-provided insurances, for example private health insurance?
Employers will want to consider if there are any additional data protection compliance requirements in the host country and, if so, how they will comply with these.
Employers will want to understand if/how the proposed arrangement will:-
- impact its corporate tax position, especially where the employee concerned is very senior.
- create a ‘permanent establishment’ in the host country,
- affect the employee’s income tax position or trigger any tax reporting or withholding obligations on the employer,
- trigger any registration requirements on the employer or any social security contributions,
- affect the ownership of any intellectual property generated by the employee, and
- trigger any health and safety requirements, including in relation to working spaces and equipment that employers need to provide.
Employers will also want to think about how things will operate in practice, including:-
- Whether the employee can carry out their role legally and effectively from the host country; for example, do they occupy a regulated role and, if so, are there any restrictions on where they can work? Will they be affected by a change in time zones etc?
- How will existing reporting lines be maintained, how will supervision be carried out?
Your next move?
Working remotely abroad is complex so it is important to take local advice to ensure you know what you’re getting into before you agree to any such arrangements.
Sara Mayhew is a specialist employment lawyer. Feel free to contact her for further information relating to the above or any employment related issue – [email protected]