In the business world particularly, but also in some other sectors where certain employees can work from home, there’s an increasing amount of evidence to suggest that productivity remains high and that there are several benefits. Happy employees are generally good for business and if they’re not paying for travel and you’re not paying for their office space (and coffee), then everyone is better off. However, what happens when you take this one step further and employ remote workers abroad?
When employing remote workers in their country of residence there’s no need for visas and relocation costs. Furthermore, you have the opportunity to employ the best person for the job, regardless of location. But, what are you potentially missing out on and what needs to be done to be compliant when employing workers overseas?
We answer some of the questions you might have and what you need to know when employing remote workers abroad.
Why Would Businesses Employ Remote Workers Abroad?
You may be looking at employing a remote worker abroad for several reasons:
- You have a presence in the country the employee resides in and have business operations there they will oversee
- The best person for the job happens to live in another country
- A current employee wishes to move abroad
Advantages Of Employing Remote Workers Abroad
Enabling an employee to stay working in their country of residence generally means less disruption. Not having to relocate means your new employee can focus on the job at hand and therefore be more productive. In addition, a presence in another country may benefit your business. Some of the advantages of employing remote workers abroad include:
- Getting a foothold in another country
- No visas or work permits
- Workers will not have to resettle
Disadvantages To Employing Remote Workers Abroad
Having employees dotted all over the globe can help a company to feel it has international footholds, is benefiting from a diverse employee pool and is using technology to its best advantage. However, though overheads may be reduced, having employees working remotely, especially abroad, should not be done without careful thought, planning and consideration.
There are many challenges to basing employees overseas and these include:
- Different working hours
- Makes team-building and collaboration challenging
- Missing out on company culture and socialising
- Different employment laws and worker rights
However, when done properly with regular communication and policies and procedures to ensure your employees’ ongoing wellness, health and safety at work, then remote workers can be an integral part of your company, wherever they are operating from.
How To Employ Remote Workers Abroad
Employing remote workers abroad can be a delicate balancing act. You want to ensure you’re instilling your values and general work ethic company-wide. However, you’ll also need and want to be mindful of the culture and working practices of the countries in which your employees are based.
The good news is that employing remote workers abroad is generally straightforward. Certainly easier than transferring an employee overseas, because you won’t need to take care of visas and it is not so costly if it doesn’t work out.
Here, we’ll be looking mostly at beginning an employment contract with an employee based in another country. However, much will also apply to an employee who wishes to return to a country in which they have residence. This can happen for a variety of reasons, including needing to be close to family.
Permission to work
Obviously, your employee will need to have the right to work in the country they are basing themselves in. Working under a UK contract does not take away the need to have permission to be working in the country in which they are residing. Post-Brexit, UK nationals will need a work permit to work in EU countries, unless they were legally living in that country before January 2021, as protected by the Withdrawal Agreement.
Although you will employ personnel under a UK employment contract, you will have to follow the employment law of the country your employee is working in. This is important because, if there is a dispute then it is likely to be the laws of the country of residence which take precedence. Some employers have been known to use this to their advantage, employing workers in countries where labour laws are looser and workers have fewer rights.
However, some other countries may have enhanced employee protections and more employee benefits than the UK. Here are a few examples:
In Austria – employees have an overall 30 days of paid holiday per year and there are a total of 13 public holidays per year
In Finland – employees are entitled to 105 weekdays of paid maternity leave with 54 days of paid paternity leave.
In the Netherlands – the average working week is 29.2 hours
A solution many companies invest in is having a local contract alongside the UK employment contract. Not only does this provide a more robust contract able to specifically address any differences in employment law, but it also gives the employer opportunity to learn about the legislation in the employee’s country of residence. A consideration for employers may be lawful dismissal. For example, in some other countries, it’s more difficult or even unlawful to terminate the employment of someone on sick leave. Such things are important to know to ensure you’re not making mistakes that could result in a costly legal battle.
It is up to you whether you employ someone abroad on a UK contract, on a UK contract with a local contract running alongside, or employ them completely on a local contract of employment. The best option will depend on the likely length of employment, residence, and the country concerned. An Employment Lawyer will be able to help you find the best option and even draw up contracts for employing remote workers abroad.
Health And Safety
Wherever you are employing workers, their health and safety whilst at work is your responsibility. This can present challenges to businesses with remote workers, and even more so if they are based abroad.
Risk assessments and health and safety should still be a part of the onboarding process. You may have to use video technology to carry out work-station assessments for remote employees.
Income Tax Abroad
Making sure your employee is paying their tax in the right country is important. Making a mistake here could result in all sorts of problems. How tax PAYE works depends largely on where you are based and for how long. For employees working abroad temporarily, the employer is responsible for deducting the relevant amount of income tax in the PAYE process. However, tax residency periods may be shorter than you think and being a tax resident may mean employees should be paying income tax in the country they are based in. You will need to research the tax stipulations for the relevant country and perhaps consider some Tax Advice from a Legal Advisor to ensure you’re compliant.
When employing remote workers abroad, there may be a few other considerations. These could include:
Time Difference – If there is a time difference between offices which could affect communication, how will you overcome this?
Insurance – Does your insurance cover employees working abroad?
Technology – How well does your technology support remote working? You will likely need video calling or conferencing software. You may also need to check if software licenses cover workers based abroad
Qualifying Criteria – Allowing some employees to work remotely and not others can cause discontent. So, though you are entitled to consider requests on a case-by-case basis, make sure you have some qualifying criteria and are operating fairly.
Proper Onboarding – Ensure you have a proper procedure for onboarding those working remotely ensuring that the company values and wider vision are communicated
Travel For Work – If it’s essential that remote employees abroad visit company offices overseas at all, then this should be included in the employment contract and the cost of this will need to be considered