Working from home is the new normal for many. Some employers have been flexible in their approach to what at home means in reality. As long as the job is being done, does is matter where it’s being done from?
The answer is yes, if you have employees working abroad. This short blog sets out some consequences of having employees working abroad for business to consider, as it looks like home working is set to stay.
New territory, new rights?
Depending on the jurisdiction and the length of the employee’s stay, they may acquire new employment rights under local law. It is likely that the longer the stay, the higher the risk so please do get in touch to ensure that your business is not exposing itself to new legal obligations.
Returning to the UK
You may require employees to return to the office at short notice (subject to Government guidance and restrictions). In most cases, your office will be stated as their normal place of work under the employment contract. This means there is no prescribed notice you need to give when asking employees to come back in. If employees are working abroad, they could face travel restrictions or be subject to self-isolation on their return. As this could impact their return to the office we advise that you plan ahead and ensure you know where your employees are working to minimise impact on the business if you need staff back in. You may also have no obligation to pay the employee you have recalled to the office but does not turn up for work on time. This approach should be treated with some caution though because, depending on the facts and the working arrangements, the employee may have an unauthorised deduction of wages claim.
Immigration
Penalties for illegal working can be enforced against employers and employees and can be substantial. Most jurisdictions (including the UK) prohibit 'productive' work under business visitor visas, so legal advice must be sought, relevant to each jurisdiction. UK nationals can currently live and work across the EEA with ease but this is likely to change come 1 January 2021. EEA nationals will require a visa to work in the UK from this date, so it is anticipated that this will be the case for UK nationals seeking work in the EEA from 1 January too. Consideration should also be given to your employees who are not UK nationals, whose immigration status’ could be impacted by sustained periods overseas.
Tax
There may be tax implications for your business if employees are working abroad for prolonged periods. These include local payroll/income tax consequences and potential corporation tax consequences if the particular jurisdiction regards your employee as essential creating a new working 'establishment' in its country. We advise seeking specialist tax advice to ensure you are aware of your liabilities and exposure.
Please do not hesitate to get in touch with out immigration or employment team should you have any questions about employees working overseas whilst 'WFH'.