The rise of remote working has opened up new possibilities for how and where employees can work. In particular, the idea of “working from anywhere” has gained significant traction, with employees increasingly seeking the flexibility to perform their roles from different countries. Whether it’s an extended holiday, staying with family abroad, or simply a change of scenery, employers are now fielding more requests from their teams to work overseas.

At esphr, we’ve seen a sharp rise in queries from employers wanting to understand the legal and practical implications of these arrangements. What’s acceptable? What’s not? And, most importantly, what factors do employers need to consider before saying yes or no?

This blog explores the key employment law and compliance issues that come with employees working from anywhere in the world. From understanding local employment rights to managing tax, regulatory, and data protection obligations, we outline the critical steps employers should take to protect their business while supporting their workforce’s evolving expectations.

1. Employment law rights

Employment contracts in the UK are typically governed by the laws of England and Wales. However, if an employee works in another country – even temporarily – they may become entitled to mandatory local employment rights. These could include provisions for working hours, redundancy, maternity leave, minimum pay rates, and annual leave. To understand the potential duties and obligations owed to an employee, should seek advice from a legal expert in the relevant country to understand their obligations. Before taking action such as disciplinary measures or redundancy while an employee is abroad, it’s essential to ensure compliance with local laws. Employers should also consider that many European countries offer employees greater protections than those in the UK. While occasional work during a short overseas stay may not trigger these issues, more frequent or extended periods of work abroad could create legal complications.

2. Right to work

Employers must ensure that employees have the right to work in the country they propose to work from. While this responsibility generally lies with the employee, unless it is the employer seeking to post the individual abroad, employers must consider immigration laws and any visa requirements that may be applicable. This includes checking visa requirements and understanding how working abroad could impact the employee’s right to work in the UK upon return. It is advisable to seek immigration advice to ensure compliance with the relevant regulations.

3. Regulatory requirements

Certain roles may be subject to specific regulatory restrictions. For example, employees working in regulated industries like finance may need to comply with rules set by the Financial Conduct Authority (FCA) or equivalent overseas authorities. Employers must ensure that remote working arrangements do not breach industry regulations.

4. Pension and employment-related benefits

Employers should review whether an employee’s pension and benefits, such as private medical insurance, can continue during overseas work. Scheme rules, legal requirements, and practical feasibility should all be evaluated. If any covers would or could be invalidated by the employee working abroad this should be discussed with the employee.

5. Expenses

Clarify who will cover the costs associated with working abroad. This includes travel expenses for trips back to the UK office, accommodation, and ongoing remote working costs such as internet access and phone line usage.

6. Data protection

Depending on the nature of the employee’s role, they may handle personal data, requiring compliance with data protection laws. Additional data security measures may be necessary to safeguard the confidentiality and security of personal data.

7. IT support

Despite the availability of advanced technology, remote work comes with potential technical challenges. Employers should have robust processes in place to effectively provide IT support for employees working overseas, to troubleshoot and resolve any digital issues promptly and efficiently.

8. Health and safety

Employers have an obligation to ensure the health and safety of employees regardless of whether they work in the UK or abroad. When an employee works abroad, this obligation extends to complying with local health and safety laws. Employers should conduct risk assessments and ensure their insurance policies cover overseas work, in the event that they have an accident whilst homeworking for example.

9. Pay, tax and Social Security

How an employee is paid, and in which currency, needs careful consideration. Are there any tax or Social Security 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? Tax residency status is a complex matter, and specialist advice is essential to avoid unexpected liabilities. Employers should also assess whether their overseas arrangements could lead to local corporate tax obligations. 

10. Contractual provisions

Employers should review employment contracts and policies to ensure they address key issues such as confidentiality, intellectual property, and restrictive covenants. Time spent working abroad may impact the enforceability of these provisions, so seeking local legal advice is advisable.

Ensure your stance is clear to avoid confusion

Whatever your position on working from abroad, whether temporary or permanent relocation, having a clear policy on working from abroad is crucial to prevent confusion. Policies can either explicitly address overseas working arrangements or require separate approval for such requests. Employers should also consider the precedent set by approving one employee’s request, as this could lead to challenges in denying similar requests in the future.

While each request should be assessed on its own merits, employers must also consider the broader impact on the workforce. A successful overseas arrangement for one employee may lead others to expect similar flexibility. Consistency is key to maintaining fairness and avoiding disputes.

While enabling employees to work from anywhere in the world can offer 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.