08/06/2021

International home working: what employers need to know

As a result of the pandemic and the increased ease at which businesses can now operate remotely, many are exploring whether allowing employees to work from, not just the UK but anywhere in the world, is feasible. Here, Angharad Aspinall sums up the key considerations for employers in this position.

Employment implications

Employees working from home in the UK have UK-based employrisk ment rights. After a couple of months of working from abroad, they are likely to start accruing rights in the country in which they’re based – and these may well be more favourable for them. For example, Columbia has no less than 28 bank holidays! And in Portugal, it’s a legal requirement for employers to pay overtime.

Payroll can differ, too. In Italy, it’s often made in 14 equal payments, as opposed to our usual 12-month calendar payments. The two additional months are paid in December and July. It’s also worth checking whether like in the UK, you are required to auto-enrol your employees into a pension scheme, as this will vary from country to country.

Where in the UK you need to be aware of both contractual and statutory laws, in other countries some different types of laws may apply. For example, in Kazakhstan, employees are subject to government and court laws, in as well as to local and contractual laws. Some countries may also require the contract to be in a certain language. In France for example, it’s a legal requirement that all policies, procedures, and contracts, are in French.

Intellectual property in the UK is very employer-focused: any intellectual property created by an employee over the course of their employment belongs to the employer. That’s not always the case abroad. If your business model is based on the creation of intellectual property, you need to be particularly aware of this. For example, in China, the employee is entitled to be paid a “reasonable remuneration” for their invention and the right to use it.

Restricted convenance is also something to watch out for, as it is unlikely to apply to an employee working from abroad. It would need to be restructured based on the local law, the new location of the employee, and their current access to confidential information. In Germany, like in the UK, the only confidential information protected by law is trade secrets – so if you want additional information protected, it must be mentioned in the employment contract. More generally speaking, you’ll need to ensure that you have adequate protection in place for data transfers outside the UK.

Immigration implications

Several businesses we work with have had employees wanting to work from a different country, sometimes at the other side of the world – and are okay with it because they can operate on this remote model. But before accepting the request, it’s worth verifying if the employee actually has the right to work over there. In most cases, they will have a connection to that country, and it won’t be an issue – but it’s something to double-check.

It’s also important to determine how often you will require them to come back to the UK: if they don’t have British citizenship, this is going to dictate whether they need a visa or not. If they just come occasionally for internal meetings or conferences, a business visitor visa will likely be enough. But if they come for a longer period of time to work, they will probably need a work visa – meaning your business will need to become a sponsor holder, with all the responsibilities and costs associated. If the employee is based in the EU, they might need to apply to the Frontier Work Permit instead.

For those employees who are EU citizens and have returned to live in their home country because of COVID and have no intention of coming back, it’s important to remember that the EU Settlement Scheme is not indefinite. After a certain amount of time spent outside the UK, the person would lose their status and be in the same position as someone who arrived to the UK for the first time after 31 December 2020.

Risk implications

Health and safety laws abroad might be more enhanced than in the UK. The Philippines, for example, require employers to have a specific, dedicated mental health policy in place. You also need to double-check whether your insurance will cover that employee abroad. Some countries may have specific requirements, like Portugal where employers must always take out occupational accident insurance.

If your business is regulated by the Financial Conduct Authority (FCA) in the UK and has workers working remotely from abroad, you should also ask yourself:

  • Are you required to register or need a license?
  • Do you need FCA approval?
  • Is the FCA satisfied with the arrangement?
  • Has the real situation reflected in the statement of responsibilities?
  • Is there adequate monitoring in place for that employee?

What should employers do now?

Top three things to consider, if your employees are asking to work remotely from abroad:

  • First, can these roles really be carried out from abroad, long term?
  • Consider reporting lines, especially if you are regulated by the FCA.
  • Have you updated your policies, and communicated them well to your employees? It’s important to be clear and consistent, to avoid potential discrimination claims.

If you’d like to chat through these questions, or any other issue mentioned above, please do get in touch at a.aspinall@capitallaw.co.uk.

On 19 May, Angharad gave a presentation on this topic for a webinar organised by the BDO, which also covered employment taxes and social security and corporate tax aspects of international home working. You can watch the full recording here.