Since the pandemic, more and more workers want to stay working from home, and some may also have plans to relocate. Whether that be to different parts of the UK or moving to another country altogether. This leads to the question everyone wants to know, can employees work abroad for the same company?
The first step would be to amend the contract, setting agreed terms and conditions. An employee would need to follow a flexible working request, requesting a change to their working conditions by sending a letter requesting the change, whether the hours they work, or a location change. The grounds for declining the request could include a concern that the employee will fail to keep up the quality and performance expected of the individual as if they were in the office. Employers will have three months to consider and come to an agreement.
The most important part of this transition would be to find out the employment laws of the country an employee is hoping to work in. Every place has different rules like statutory notice periods, taxation, employee protections and contractual obligations. For example, Portugal salaries are divided into 14 payments rather than the standard 12 we have in the UK. Following the local employment law is essential in running your business, and there are fines for not following them correctly. Your reputation in the industry could be ruined in the local market. It also might be worth seeking tailored tax and immigration advice to ensure no one gets any potential surprises with the tax office.
Another thing to keep in mind is that if the employee’s payroll is still in the country of residence, they may not be entitled to the health care system in their home country. For example, if a UK resident was to move to Spain, they may not be able to have the use of the NHS when they come back to the UK. However, for EU citizens, a solution is the European Health Insurance Card which allows them to receive healthcare in another EU country.
A common way employers work with people in different authorities is by drawing up independent employer contracts. Meaning they are registered as freelancers, sole traders or limited liability companies who file invoices monthly so that they can be paid. However, whilst this sounds like a quick and easy fix. Unfortunately, it is a hack and can lead to severe ramifications. Governments are recently taking action against employee misclassification. If a company has decided someone is a contractor, tax or employment authority will fight if it seems to be a misclassification. The consequences of this could be that the company will have to change the employee’s status but will also need to backdate payments and very likely enforce penalties.
As the local employment laws and obligations are complex, some companies have considered using an Employer of Record (EOR) for remote staff. An EOR is a third-party organisation that becomes the legal employer of the employee, in regards to government, tax, and employment authorities. EORs can handle things like local payroll, employment-related taxes, payslips and managing statutory benefits in the country. This route ensures that you can employ someone in a different country without the complexity of international employment.
Of course, an employee moving abroad can come with challenges for both the employee and the business. Number one should be ensuring the employee still feels like a part of the team and feels valuable and valued within the company. You may want to ensure they have an easy way to connect with colleagues and guidelines and policies on how to work together. Trust is also another challenge that could arise. Remote work takes a lot of trust and faith that the job will get done. However, what’s essential is deadlines are met, and the work is to a high standard.
So, can employers work abroad for the same company? In conclusion, employers CAN work abroad for the same company, providing you follow the right laws and regulations in the country the employee will be working in. Once a company can successfully work with an employee abroad, you’ll be in a prime position to start adding global talent, regardless of where they live.
