A few years ago, the idea of working from anywhere in the world seemed like a pipe dream. As we’ve seen in 2022 however, the growing prevalence of remote work has made it a real possibility.

Organisations and their employees are now using the lessons learned during the pandemic to reimagine how work is done – and what role offices should play. In some cases, this has given rise to a ‘work from anywhere’ mentality.

Earlier this year, Airbnb announced that all 6,000 of its employees could work remotely from any location without taking a pay cut – a move that resulted in 800,000 people flocking to its careers page, and many other businesses including Spotify, Google, HubSpot, Revolut and KPMG, have introduced policies permitting employees to work from an overseas location for a short period (such as up to three months).

With research revealing that almost three quarters (76%) of workers would be more inclined to work for a company that offers ‘work from anywhere’ flexibility, clearly, there is appetite to work abroad, and some employers are embracing it. The question is, how remote is too remote? Is this any different to employees working remotely within the UK? And what do employers and HR professionals need to consider before introducing such a policy?

Dealing with requests

At esphr, we’ve seen a real increase in queries from our clients whose employees have requested to work from abroad, for whatever reason; from wanting to be nearer to family who have relocated, or simply fancying a change of lifestyle and scenery. With the hybrid working model set to continue for 2023 and beyond, the work from anywhere ideal, either on a permanent or temporary basis, carries with it various additional considerations for businesses.

Matters concerning pay

How will employees be paid, and in which currency? Are there any tax implications if working in another country? For example, is there a requirement to pay tax and national insurance contributions in the UK, the country in which an employee proposes to reside, or both? There may be liability for additional income taxes or employee social security contributions that would need to be taken into account. Specialist tax advice should be sought as a preliminary consideration. The employee will also need to make their own separate checks on their situation in regard to any requirements for tax returns.

Impact on employment benefits

It is important to understand terms surrounding benefits such as healthcare cover, and whether they would be available if a staff member was to work overseas permanently. Additionally, are reviews of company policies required – such as the expenses policy – to ascertain whether relocation and moving expenses are applicable to a switch overseas?

Immigration implications and employment law jurisdiction

If an employee needs a visa or permit to work in their desired country, employers and HR professionals must be aware of this at the earliest opportunity, especially as there are likely to be costs involved for both parties.

There may also be implications so far as immigration rules, insurance, and the applicability of employment and/or contract law of the foreign jurisdiction.

For instance, there could be additional local employment rights that apply, such as paid time off and minimum rates of pay, which would become applicable.

Health and safety to address

Obligations towards employees continue – regardless of whether they operate in the UK or abroad. Employers will need to check if it will be possible to comply with local health and safety requirements, as health and safety obligations vary significantly between jurisdictions.

From an insurance perspective, the employer would need to understand if their insurance policies cover employees working abroad, in the event that they have an accident whilst homeworking for example.

Other considerations include:

• Right to work – Fundamentally, the employer would need to determine whether the employee has got the right to work in the country they are proposing to work from, and be mindful of whether working abroad may affect their right to work in the UK when they return. Immigration advice should be sought on this point.
• Regulatory requirements of particular roles – Some roles may be limited due to regulation, for example a business regulated by the FCA.
• The employee’s pension and other employment-related benefits such as medical insurance – An employer would need to review these to consider the relevant scheme rules and identify if it will be possible for these benefits to continue while the employee is living and working abroad.
• Expenses – It would need to be agreed who will pay for the employee’s flights and accommodation if they are required to attend the UK office. Other normal home working expenses, such as internet access, phone line, etc., should also be considered.
• Data protection – Depending on the employee’s role, they may be processing personal data. The employer would need to determine whether it’s legal to transfer personal data to that other country, and whether they would need to put any additional data security measures in place.
• IT issues – Whilst there might now be a wealth of technology at people’s fingertips, technology doesn’t always work 100% of the time. If there’s an IT issue, do businesses have processes in place for employees to have their digital problems sorted effectively? If not, this would need to be addressed.

‘I don’t see the problem – I already work remotely!’

While employees might feel that working from abroad is no different to working remotely in the UK, it’s not so straightforward for employers and HR teams– for all the reasons outlined above.

In any case, if an organisation is handed an enquiry to work from home permanently, whether in the UK or abroad, the first step should always be to analyse whether it qualifies as a flexible working request under the legislation, and always seek employment law, immigration and regulatory advice from an in-house or outsourced team where necessary. Overall, it is important to stress that these requests require a greater level of understanding and knowledge – it is not simply a case of approving an employee’s move to work in another country.

Minimise the chance of disputes

Whatever your company’s position on employees working from abroad, whether for a temporary period such as an extended holiday, or permanent relocation, it’s a good idea to make your stance clear ahead of time, as this will reduce the potential for issues later down the line.

It’s important that any business that allows homeworking or hybrid working has a suitable policy in place. Such policies may be silent on working abroad – perhaps for fear of ‘encouraging’ requests – or could include a short explanation that separate approval will be required from HR or relevant senior management.

Bear in mind that, if you grant a request for one employee, you could be setting a precedent which might make it more difficult to deny similar requests in the future. As well as putting you in a tough spot, an inconsistent approach could lead to disputes.

While each request should be assessed on its own facts – and one acceptance doesn’t obligate you to accept all that follow – if others are working remotely abroad and there is evidence of this being successful, colleagues are likely to rely on that as proof that the ‘business reasons’ for refusing the request don’t apply.

For this reason, while allowing employees to work from anywhere in the world could have recruitment, retention and engagement benefits – all things which are incredibly valuable in the current climate – it’s important to consider requests from all angles to avoid making rash decisions that can’t be easily undone.

If you’re battling an influx of people problems, we can help you avoid costly legal missteps and ensure the stability of your workforce into the New Year.