International Remote Working, Checklist for Employers

Posted on 8th January, 2021

Estimated reading time 2 minutes

Are you ready for increased employee choices and flexibility in the workplace?

There is no doubt that we are all living through an exceptional period of time, as a result of the pandemic. We have seen a revolutionary and practically overnight shift from office-based work to  remote home working that became a necessity, as governments sought to control the spread of the virus.

This ‘new normal’ has come with lifestyle benefits for employees such as reduced costs of commuting, more time for personal development and a better work-life balance. Many employees have adapted successfully and would prefer to, at least part-time, continue working remotely as pandemic restrictions are eased. Business leaders, too, have embraced this ‘new normal’ and are more comfortable with the benefits of the shift to remote working, which include costs savings from reduced business travel and office space.

For business, one area that is emerging is the compliance challenge of international remote working, where employees working from ‘home’ may mean working in another country for an extended period of time. This can create additional compliance burdens both the employer and employee but these are generally not insurmountable and should not be a barrier to future international remote working.

At the start of the pandemic, it was almost impossible for any business travel to happen. Many employees posted or employed abroad returned to their home countries with the intention of working there temporarily until travel restrictions lifted. These temporary dislocations led to initial tax and social security questions around where taxes should be paid for the work being performed. Governments announced easements to avoid some of the unintended consequences, however as 2021 progressed and draws to a close, some of these easements will likely come to an end.

With continued restrictions, temporary displacements have become more permanent. The ‘home’ where the employee is working from is no longer necessarily the country of employment, and therefore the location of where the duties would have been performed has changed. This shift can impact the tax and social security position as well as employment law rights and employer obligations.

HR teams are grappling with complex legal, tax, social security, payroll and immigration challenges that are arising. Many of these do not manifest or become obvious in real-time, especially in the uncertain times we find ourselves in. Unfortunately, this does need addressing to avoid unexpected and costly outcomes.

The key areas of consideration

International remote working - key considerations

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