Wonderful service from start to finish.
Should I let my employees work remotely from abroad?
- AuthorEmployment Team
Over the past year, many employers and employees have realised that some jobs can be effectively done from the employee’s home. Consequently, some employees may wish to take this a step further and request to work remotely from abroad. Our Employment Law team discusses some of the risks involved in working abroad arrangements and outlines what you should do if you receive a request from an employee to be allowed to work remotely overseas.
Taxes and social security
You may face additional collection and reporting obligations if one of your employees becomes liable for local income tax and social security contributions in the host country. Whether the employee incurs local tax and social security obligations will often depend on the type of work they do, their length of stay, and any international agreements that exist between the host country and the UK.
You should check to see if any tax treaties exist between the UK and the potential host country. For example, if a double tax treaty exists between the host country and the UK, the employee will not owe income tax to the host country as long as certain conditions are satisfied. You should also be aware that some international agreements may be affected by Brexit. Currently, a UK citizen working in an EEA state or Switzerland will not incur an additional social security obligation, but this may change once the Brexit transition period ends on 31 December 2020.
Permanent establishment status
The risk that a business will acquire permanent establishment status is low, but the consequences are severe enough to warrant consideration. If the employee’s presence in the host country creates a “permanent establishment,” the organisation may be liable to pay corporate taxes in the host country. The risk of creating a permanent establishment is greater where the employee remains in the host country for a long time and where they regularly exercise the authority to conclude contracts in the employer’s name.
An employee working abroad may be entitled to benefit from the employment laws of the host country, even if those rights are more generous than those stipulated in their contract of employment. This could include more generous rights in areas such as holiday entitlement, sick leave, and family leave, and failure to comply could lead to litigation. This could be particularly frustrating if you want to terminate the employee’s employment as they may also be entitled to additional termination rights.
The host country may require foreign workers to have a visa or work permit, depending on the type of work being done, how long the employee intends to stay in the host country, and any international agreements between them and the UK. Currently, UK citizens can work in an EEA country without a visa but this may change when the Brexit transition period ends.
You should be particularly cautious if any of your employees are sponsored under a tier 2 work visa. If a sponsored employee works abroad, they may have their sponsorship invalidated and be prevented from returning to live and work in the UK. You could also face consequences from the Home Office including the suspension or revocation of your sponsor licence.
Working abroad introduces new risks to data security. You must ensure that proper measures are in place to protect sensitive data, including personal employee data. Strategies to strengthen data security may include:
- providing computer equipment and a company mobile phone;
- using data encryption;
- remote desktop protocols;
- secure virtual private networks;
- multi-factor authentication.
If the employee will be working in a country outside the EEA, you will need to be especially careful to ensure that data transfers between the countries are GDPR compliant. You should review the rules regarding cross-border data transfers and whether the host country has adequate levels of data protection.
Health and safety
You have a duty to take reasonable steps to protect the health and safety of your employees, wherever they are located. Employees should be instructed to complete a risk assessment so that any health risks can be identified and minimised. You should also check your insurance coverage to ensure that you are protected if the employee has an accident while working abroad. You should review local health and safety laws and whether they introduce any additional obligations.
Steps to follow should an employee makes a request to work abroad
Considering all the legal risks, many employers may want to impose a blanket refusal policy towards any request to work remotely from abroad. However, such a policy may put you at risk of a discrimination claim. Any policy you develop should be clear and consistent, yet allow consideration of each request on a case by case basis. When considering a specific request you ought to consider:
- Whether the job can be done effectively abroad;
- Whether you may need the employee in the workplace on short notice;
- Why the employee wants to work abroad (e.g. taking care of relatives);
- How long would they be abroad;
- The effect of any time difference;
- If there is a quarantine period the employee would need to observe when they return.
Before granting any requests, you should seek legal advice from both the UK and the host country. This will help you determine your exact obligations and determine if a working abroad arrangement is feasible.
If you do decide to allow an employee to work remotely from abroad, be sure to get the terms of the new working arrangement in writing. Stipulate that the new arrangement will be subject to review and stay in constant communication with the employee to ensure the arrangement is working as it should.
To discuss how to proceed if an employee has requested to work remotely from abroad, you can contact the team today on 023 8071 7717 or email email@example.com.
To receive regular Employment Law updates from the team regarding recent tribunal cases and legislation updates, you can subscribe to our weekly Employment Law Newsletter by completing our subscription form or emailing us at firstname.lastname@example.org.
This is for information purposes only and is no substitute for, and should not be interpreted as, legal advice. All content was correct at the time of publishing and we cannot be held responsible for any changes that may invalidate this article.