Government directions on Covid 19 have stated that an employee should work from home where they can. Technology has freed employees from geographical restrictions, and they can work remotely even whilst abroad. However, this can have legal and practical implications for the employer.
Working Abroad
Employers must be mindful when an employee works abroad as their legal rights may be affected by their presence in the country they will be working from. These legal rights can be different and more complex than the employee’s legal rights in Britain. Rights may be more generous on maternity pay, annual leave, wages, and notice periods. Employers should always take advice from a lawyer in that foreign country regarding employment rights.
Tax
Employees working remotely abroad for long periods can acquire tax status in that country and risk also being a tax resident in two countries. This will mean the employee will be charged tax twice on their income. The employee will have to comply with the tax registering requirement of the host country they work in. Employers should check if there is a double tax treaty which will take precedence over the host country’s taxation rules. Subject to conditions and stays up to 183 days there is exemption to pay host country taxes under the tax treaty provided by the Organisation for Economic Co-operation and Development Model Tax Convention. Employers will have to be mindful that an employee working remotely may trigger a taxable liability as a permanent presence by the company in the country the employee works. Employers should check if there is a tax treaty to prevent this happening. Specialist advice from an accountant or tax advisor should be sought.
The payment of national insurance contributions and social security payments must be assessed by the employer. After the 31 December, the United Kingdom will no longer be part of the European Union. For short term postings in the European Economic Area and Switzerland, if the employer wants to pay national insurance contributions in the United Kingdom and not the country the employee will work, they must use an A1 document from the HMRC. For the non-European Economic Area countries, the employer should check if there are any common social security agreements in place between the country where the employee will work and the United Kingdom.
GDPR
To comply with the General Data Protection Regulations employers will need to review the transfer of personal data between the employer and employee. It will be crucial that the employer reviews and implements the securest safeguards to prevent data breaches. There will be security matters to review as to where the employee will work, i.e., at home or residence with a shared network, in public such as a cafe with free Wi-Fi access points. Employers should consult their IT support to ensure the best security safeguards are implemented to protect the employee’s computer whilst working abroad.
Sponsored employees remotely working abroad could put at risk their ability to continue to work in the United Kingdom. This is because sponsored migrants are only allowed to travel abroad for short holidays and business purposes hence by staying away from the United Kingdom for a long period can lead to the Home Office concluding they do not need a visa to undertake the work in the United Kingdom. The employer is also place at risk of the Home Office revoking the sponsors licence or having it suspended and have the licence relegated.
Duty of care
Employers have a duty of care to safeguard the employees’ health and safety. They must undertake reasonable steps to assess the employees work environment. This will be a difficult task as the employee will be working remotely abroad. There is also a need to consider the health and safety laws of the country the employee will be working from. These may be very different and may be more burdensome. Employers should undertake risk assessments to ensure the employee has a safe working environment and a safe mode of travelling.
Employers should review their insurance policies which may specify that the insured employee must be resident in the United Kingdom to benefit from the insurance cover. Employers should also check their health insurance and in death service insurance policy. These too may be affected by an employee not being in the United Kingdom. In light off the Covid 19 crisis many countries will be at a higher risk level then the United Kingdom. Insurance requirements for employees may also vary in foreign countries.
This article is only a guideline and does not constitutes legal advice. If you have a request from an employee to work abroad, please call the HR and Legal advice line to discuss your situation on 01455 852028.
