Even before the Covid-19 pandemic, the improvement of digital technology has opened the world to all the opportunities remote work offers. Almost two years after the onset of the novel coronavirus, remote working arrangements continue to expand, often posing a challenge to global employers.
As the crisis lasts, some employees now request to work outside their country of employment, especially during the holiday season.
To avoid any unpleasant surprises that may occur with such arrangements, here are the top 5 tips for global employers on how to best manage remote working.
Review Your Internal Policies
When the crisis began, there was a need to implement work from home arrangements as soon as possible. Most of the companies have done it in a hurry. If you still haven’t reviewed and updated your policies, now it may be the right time.
Make sure to add a policy concerning remote working abroad. Also, as part of the company’s internal rules, include practical details related to the request on remote work abroad, managing costs and cost reimbursements, travel and quarantine restrictions, allocation of liabilities for such arrangements, etc.
By having an official procedure, you can more efficiently and fairly approach employee requests while maintaining compliance and managing your company’s tolerance to risk.
Efficient and Accurate Payroll
Remote work has also made it necessary for companies to review their payroll processes. To ensure accurate and timely pay cycles with all your contingent workers, you need multiple checks and balances in place. Fully compliant global payroll solutions can help your company minimize any payroll issues. They can outline key dates for timesheet submission and create automated reminders over SMS or email at specific points, such as payment confirmation or timesheet access.
With increasing complexity and ever-changing regulatory requirements, including reporting and data security, payroll processes and systems you choose must be efficient and fully compliant.
Know Where Your Employees Are
As a result of the lengthy work from home situation, the odds are high you won’t always have valid information where your employees are. It may happen that an employee won’t find it relevant to inform you that they are temporarily working from their campers or their summer home in a different country.
Depending on where your employee is working, sometimes different laws may apply. You need to be aware of their working location, always.
To avoid any possible legal complications, you should establish an application process for remote working abroad. Also, make sure you survey your staff work locations regularly.
Assess Tax Implications
Having a member of your staff working in another country can create a tax obligation for your company as the employer. A permanent establishment, a tax connection of your company with a foreign country, may result in a potentially unexpected tax burden. Your company may owe income and sales taxes. Furthermore, time-consuming compliance obligations may occur.
Whether a permanent establishment will be created5 depends on more factors, such as the length of stay, visa status, workplace, employment status and employee role. Some additional factors are important as well, such as whether there are tax treaties between the countries, the nationality of the worker, what country the employee wants to work from, etc.
A permanent establishment is different from one country to another, so employers need to understand the tax laws of the state that the remote worker is in.
Be Informed of the Relevant Laws and Obligations
Before you allow your employee to work remotely from abroad, check the relevant local employment and labor laws that may be applicable.
For example, suppose your employee wants to work in the EU, even for a very short period. In that case, you as an employer must comply with the essential provisions protecting the employees’ rights, regardless of the law in the contract. Those are the provisions related to working time, public holidays and annual leave, remuneration, non-discrimination, etc.
Besides employment and labor laws, you should also check:
- which social security laws will be applicable if a member of your staff is temporarily working abroad;
- compliance obligations;
- whether the current insurance provides adequate coverage to remote employees, including those working remotely abroad;
- if there are any legal obstacles when it comes to transferring personal data.
Keep in mind that work from home is here to stay even after the crisis. The more effort you put into creating policies, the more efficient you will be in addressing your employees needs while minimizing risks for your company.