Should you let staff work abroad?

Just a few years ago, for the majority of UK professionals, work from home (WFH) on a regular basis was simply not an option. But the pandemic has changed everything: now, flexible working is regarded as the norm, and most UK professionals have adopted it in one way or another.

It all felt so new at the start, but we’ve quickly become accustomed to the new ‘hybrid working’ model – with some of us now wondering what other ways of working can be explored. There have even been some companies offering the possibility of WFH in another country, which is an exciting prospect to say the least. But while many employees would jump at the chance to work remotely outside of the UK, employers could find themselves in a sticky situation if they give the go-ahead without being aware of the legal pitfalls. So, what needs to be considered?

Tax, tax, tax

If your employee is living in a different country and using its social services, they might not be too keen on paying national insurance in the UK – which could see their employer landed with a hefty tax bill for unpaid contributions on their behalf. A few countries have attempted to deal with this problem: Ireland, for instance, provided citizens who’d returned home from working abroad at the start of lockdown with a ‘grace period’, meaning the Irish Revenue didn’t require them to register for tax in Ireland and they wouldn’t have to worry about double taxation. The same cannot be said for the majority of countries, though – so you really need to be contemplating the tax implications for your business.

Employment laws

Employers also need to think carefully about labour and employment laws – do you know what local laws will apply once your employee has arrived at their destination? Once your employee has moved, they will come under the provisions of the country in which they reside – this includes sick pay, public holidays, notice periods, working times and annual leave. You might find there are fewer days where the whole team is working: for instance, if your employee moves to Iran, they will be entitled to a whopping 27 public holidays – in comparison with their UK colleagues, who receive just eight.

Data privacy

Employers need to think about what data privacy rules apply if an employee is, for example, accessing a British or European client’s personal details in China – the data will come under UK data protection or GDPR rules, so how will you ensure that it is being accessed securely outside the UK/EU? Companies must research and resolve these issues – or risk fines in the millions.

In summary, employers should seriously think twice before allowing their staff to WFH abroad as they please. Mentioned above are just some of the legal issues which could arise – you may find yourself in a precarious situation if you fail to take them into account.