Since the global pandemic took hold earlier this year, many office-based employees have been working remotely. For most staff this means working from home, but increasingly employees have asked to work from other locations, including family residences and holiday homes in other countries. It is unlikely that current policies and procedures address this issue. Employers need to communicate to staff what is and isn’t acceptable in terms of home working.
An employee who intends to work in another jurisdiction will need to be satisfied that they are able to do so without any form of special permission such as a visa or work permit.
Several business activities are permitted under visitor-type visas, including in the UK, but these are generally narrow and prescriptive, and are unlikely to cover the undertaking of productive work. In the UK, factors such as the nature of the work and the length of time spent here are relevant to determining whether an arrangement is ‘working’ or a business trip falling within a visitor visa.
Working in contravention of local immigration laws can have serious consequences for individuals, particularly in relation to possible travel bans. But it could also have legal and reputational consequences for their employer. If the employer is found to have breached local immigration laws this could at worst result in civil and criminal liability, and could also prejudice the immigration status of other employees currently working in that country.
Tax and social security
While an employee might become subject to income tax and social security in the jurisdiction in which they are temporarily working, this is unlikely during a short stay. Many jurisdictions (including all countries in the EU) have agreed a ‘double tax treaty’ with the UK, which would ordinarily prevent this additional charge to tax where the employee continues to be tax resident in the UK.
If the employee is working outside the UK for longer than 183 days, this may affect their tax residency status.
Creation of a permanent establishment
Another factor to consider is whether the employee could be regarded as having a permanent establishment for tax purposes in the jurisdiction in which they are working. Although the risk is low, the repercussions are significant in relation to potential corporation tax liabilities.
Data security, data transfer and confidentiality
Home working creates a host of data protection issues and the move away from a home office increases risks around data security. Employers will need to check what personal data the employee processes and whether their data protection policy covers data transfers in this situation.
An employee working temporarily overseas may also benefit from mandatory local employment protections, including rights in relation to paid leave or rights on termination of employment. This is particularly relevant in the EEA where the Posted Workers Directive applies to those workers who are posted temporarily abroad.
Public health guidance
Every country has a different approach to public health measures to stop the virus. Certain countries will have quarantine laws around arrivals from the UK. The Republic of Ireland, for instance, currently requires visitors to quarantine for two weeks on arrival unless they are on the green list, which Great Britain currently is not.
Under the Health and Safety at Work Act 1974 employers are under a duty to do all that is ‘reasonably practicable’ to protect the health, safety and welfare of their employees. These duties extend to those working from home regardless of location. An employee working in a location abroad should ideally be completing a home working risk assessment.
If an employee is working overseas, the employer will need to ensure that group insured benefits such as private medical or death in service are not impacted (or invalidated).
So what should an employer do if someone requests to work remotely from an overseas location? Asking them to return to work at their home base in the UK is of course one option. Another option would be to decline the request. The topic is likely to be an emotive one. A clear policy on the issue will help manage expectations and streamline decision-making, thereby promoting fairness and consistency. Employers should have a policy that is clear and consistent while also allowing the flexibility to consider each request on its merits.
Steven Cochrane and Andrew Quayle are partners at CMS