Since the pandemic the topic of remote working has continued to be hotly debated. Some employers feel it is time to take a harder approach to return to office, whilst others are embracing remote working as their new norm. Whilst employers’ positions on remote working vary, many if not most employees expect to have the option to work remotely. The freedom to work from anywhere, whether that be their home, elsewhere in their country, or another country altogether increases the pressure on organisations to consider flexible working in a way that balances retention of talent without creating unnecessary risk for the company.
The issue is still very much in its infancy from a regulatory perspective, although flexible working is beginning to be more in focus, for example the Employment Relations (Flexible Working) Act 2023, which is expected to become effective in the UK in 2024 has enhanced the rights of employees in the UK to request flexible working, notably making this a day one right for employees.
This article sets out trends in flexible working expectations and considerations for employers when adopting a position on remote working, in particular working from anywhere.
Growing Cultural Expectations
The mounting pressure on employers is reflected in recent studies. According to research completed by UK Parliament in September 2022, approximately 22% of UK employees polled had worked from home one day in the prior week (compared to 12% in 2019) and approximately 13% worked exclusively from home (compared to 5% in 2019). While we do not yet know how those statistics compare to 2023, it is very likely that the upward trend has continued.
Flexible working also includes job-sharing, flexitime, and working compressed hours. In fact, an increasing number of employees are inquiring about working in other countries, whether temporarily or permanently.
Companies are already capitalising on the market and targeting employees specifically looking to embrace a work from anywhere culture. Companies like ‘OUTSITE’ offer access to specifically designed remote worker accommodation and co-living, and ‘Storyline’ offers onboard residences for sale, meaning remote workers could work and travel the globe full time. Some governments may also be looking to respond to demand, offering ‘digital nomad’ visas, such as the UAE’s one-year residency permit for remote workers employed by companies outside of the UAE. That said, other countries have moved away from this practice by becoming more protectionist on immigration in general, and in some cases ceasing their digital nomad visa programs specifically. Certain employers are responding by introducing policies on working from anywhere, promoting themselves as “fully remote” or “remote first”.
Considerations for Organisations
As working from anywhere becomes more prevalent, employers must prepare themselves for the future of flexible working as innovation and cultural changes are outpacing regulators globally. The specific considerations for organisations will vary country to country based on their legal framework. Generally however, the issues arise in the following areas: employment law, immigration, payroll tax, health and safety along with the employer’s Duty of Care, benefits, data privacy and security, intellectual property, and contracts.
Employment Law
Technically, the location from which work is performed determines which employment laws and regulations apply. Therefore, if an employee is working from another state or country, that employee could claim that they are entitled to the benefits and protections offered by the employment laws of that state or country, which could include minimum wage requirements, pension contributions, discrimination and/or working hours regulations that are misaligned with the laws of the employer’s location. Unfortunately, there is no clear or consistent indication as to how a labour court or tribunal would decide such an issue.
Immigration
Employees seeking to work from outside their country of residence need work authorisation in that country, which often requires visa sponsorship from a local employer. Some countries have introduced “digital nomad” visas specifically for remote employees working for foreign employers. Many of those countries do not yet have the infrastructure to enable an employee to actually apply for the visa and some countries are encountering local scrutiny because of the impact of on the local cost of living. Further, “digital nomad” visas often have extensive requirements, leading to additional cost and delay that discourage employees anticipating a short stay. Finally, recognising post-pandemic the potential for foreign nationals to displace locals in the job market, some countries have become far more restrictive with respect to immigration in general, and more specifically have pulled back on digital nomad visas.
Payroll Tax
Depending on the duration of an employee’s presence in a different state or country, the employee, and in some cases the employer, may become liable for taxes and social security contributions in that country. Depending upon the countries involved, a tax treaty or totalisation agreement may allow an employee to avoid double taxation and social security obligations for a period of time.
It also is possible the employer itself could inadvertently create a taxable presence, known as a "permanent establishment" in that country by virtue of its employee working there, which would lead to business registration and corporate tax obligations. In many cases, this is the result of an employee’s activities in that country. In some countries it is based on how long one or more employees are working for the employer in that country.
Health and Safety and Duty of Care
In many countries such as the UK, employers owe a personal, non-delegable Duty of Care to their employees to take reasonable care for their safety at work. Generally, it includes providing proper safety training and ensuring the work environment is safe and secure.
This concept has a wide reach. For example, in 2021, a German court found that a man who slipped while walking a few meters from his bed to his home office suffered a workplace injury because he was technically commuting. If the duty applies to an employee working remotely from home, it is not fanciful to consider it may apply to employees working remotely from anywhere. On the other hand, workers’ compensation schemes or insurance may limit coverage extraterritorially.
Benefits
As with workers compensation schemes and insurance, various other benefits and insurances may not apply to employees working remotely from outside of their country, whether in whole or part, either by the policy of the benefits provider or applicable law.
Cybersecurity and Data Privacy
Remote working adds complexity for cyber security teams to ensure the employer’s network is adequately secure. It can be as simple as open workplaces exposing data to third parties or more complex such as increasing the risk of cyber-attacks, particularly if remote working employees are using public networks or working from co-living spaces or public areas.
With respect to data privacy, working abroad may implicate obligations under local data privacy legislation. For GDPR purposes, European Data Protection Board (EDPB) guidance confirms that access by employees working from abroad would not in itself create a data transfer.
To ensure they are complying with their legal obligations, such as their Duty of Care, employers may be inclined to monitor employees as they work remotely so that they are aware of any potential risks or dangers. Also, they may want to monitor performance or working hours. There may be specific notice and consent requirements if employers are monitoring employees through use of software, such as those that measure working time or keystroke activity, which employers should be cognisant of.
Intellectual Property
Intellectual property laws vary country to country. Employers may mistakenly believe that IP defaults to the company when this is not always the case. Practically speaking, it exposes employers to the risk of theft of trade secrets and the inability to enforce their rights to the IP created by the employee.
How Can International SOS Help
If employers have not faced a request to work from anywhere yet, it is increasingly likely to occur at some point, if it is not already occurring in a more ad hoc and informal manner. It is a good time to evaluate the risks and benefits of, and take a stance on, allowing employees to work from anywhere.
Does your organisation allow employees to work from anywhere? How do you manage some of the considerations mentioned above?
For almost four decades, our security, health, logistics and digital experts have been supporting over 11,000 global organisations uphold their Duty of Care responsibilities. Regardless of your industry, size or location, we understand the risks of your people and how to empower workforce resilience.
- The CEOs drawing a hard line on return-to-office policies - BBC Worklife
- Record number of employees taking employers to court for refusing flexible working requests – GQ|Littler
- The impact of remote and hybrid working on workers and organisations - POST (parliament.uk)
- Coliving + Community for Remote Workers | Outsite
- Live and Work Anywhere: Remote Working Programme (airbnb.co.uk)
- Residence visa for working outside the UAE | The Official Portal of the UAE Government
- 50+ fully remote companies that let you work from anywhere (zapier.com)
- Fall on walk from bed to desk is workplace accident, German court rules | Germany | The Guardian