Can employees work remotely abroad for a UK employer?
Remote working of one kind or another has become a common feature of working life for many in recent years, not just in the UK, but globally. The COVID-19 pandemic forced many employers to think about how to maintain day-to-day running especially of office-based and service-focussed businesses and home working presented an obvious workaround. However, in more recent years, some workers have come up with an interesting take on this, which can present its own unique challenges.
Some employees here have realised that, in theory, they can work remotely for the UK employer from almost anywhere, including abroad. As long as the work gets done there shouldn’t be an issue right? Well, not always, and if this is a route you want to go down (or have already agreed to) there are some important considerations to bear in mind.
Put overseas remote working arrangements in writing
Ideally, any employer who has agreed for team members to work remotely abroad needs the arrangements specified in writing. This could take the form of a side letter or more formal amendment to the employment contract. The employee needs to know that, if what starts out as a short term experiment turns into something longer-term they will need to revisit that original agreement and get the employer’s consent. It also needs to be made clear how the arrangement will operate in practice. For example, specifying who the employee will report to and be supervised by whilst abroad and whether this will differ from their typical reporting line in the UK. If proper “facetime” isn’t going to be possible, how is performance going to be monitored? What about appraisals and training? All of these aspects may need to be reflected in a proper agreement. Assuming that the arrangement is to be temporary, a time period should be specified within any agreement so expectations are clear.
Managing employees working remotely abroad
On supervision, an employer must ensure communication channels are in place to allow the employee to report back easily from abroad. Assessing how the typical UK work-related communication channels (Zoom, Microsoft Teams, etc) operate in the host country from which the employee will be working all needs to be thought through and checked. Are different time zones going to complicate communication and service delivery?
Consider also whether the employee has access to relevant technology to let them work abroad effectively, whether this will incur any costs, and who is going to bear these. In certain jurisdictions, there may be a legal obligation to pay an employee’s remote working expenses (such as internet and electricity usage) and to provide certain equipment. The employer should make themselves aware of any such rules specific to the host country’s jurisdiction.
Finally, what about social connections with colleagues and the other interactions which can be so key to effective team building? Consideration will need to be given to the practicalities around maintaining proper engagement if colleagues will be remote for long periods. If the COVID pandemic taught us anything it was just how important these interactions could be and how detrimental it was for colleague wellbeing and professional development, when social distancing made them all but impossible. The value of maintaining proper communication with colleagues in every sense, should never be underestimated.
Tax implications of employees working remotely abroad
There could be a number of tax implications resulting from an employee working remotely abroad. For example, HMRC considers an employee who is present in the UK for more than 182 days per tax year to be a UK tax resident for that year. So employers need to keep track of how many days per tax year the employee spends in the UK or abroad and, from there, work out if this changes the employee’s tax residence. Employers should always seek specialist tax advice in the proposed host country before finalising any agreement.
Protecting intellectual property when employees work abroad
If an employee is likely to be involved in the development of any new know-how, designs, product lines or anything else that might be considered intellectual property while abroad, employers need to be clear how a host country treats that for all legal purposes so they can seek to protect their position on ownership of anything of commercial value created during the course of employment. If the employment contract provides that its terms are subject to the courts of a UK jurisdiction, then this should help as UK legislation generally provides that any IP created in the course of an employee’s everyday duties belong to the employer. However, if the contract isn’t clear or just doesn’t deal with this, an employer can run into serious difficulties if a dispute over ownership arises.
Pensions and employee benefits when working abroad
Employers should ensure that employee benefits, such as private medical insurance or pension schemes, still apply when the employee is working abroad. For example, insurance policies or schemes may have provisions which state they only apply within a certain jurisdiction or geographical area. If the employee’s location is going to be outside the UK this may require a change to the employee’s contract. This will need to be communicated to and agreed with the employee before any arrangement is approved.
Equally, if ongoing membership of a specific workplace pension scheme will not be possible whilst the employee is working abroad, then employers must consider how to ensure compliance with statutory auto-enrolment obligations. These require employers not to do anything which causes an employee who qualifies for auto-enrolment to cease being an active member of a pension scheme. It is for the employer to ascertain how this would work in practice and resolve any problems.
Health and safety duties for employees working abroad
In the UK, employers have a legal duty to ensure the health, safety, and welfare of their employees. In the UK, employers must carry out a risk assessment of work activities carried out by employees, including those working remotely, to identify hazards and assess the degree of risk. Employers should consider conducting a similar risk assessment of the employee’s remote working setup in any host country. How that would work in practice is unclear but, again, this is for the employer to consider.
Beyond adhering to UK health and safety guidance, employers need to factor in any local equivalent duties in the host country. Health and safety requirements can vary significantly between jurisdictions, so it is sensible to get legal advice within the host country.
Another practical issue to consider would be monitoring the employee’s working hours whilst they are abroad, specifically to ensure that they take mandated rest breaks. Here again, employers should consider whether they have adequate IT systems in place to monitor and achieve this, and whether the host country has specific equivalent rules to the Working Time Regulations to which the employer must adhere.
Protecting business data when employees work overseas
If the employee’s role involved processing personal data, employers should consider how any data protection legislation applies, ensuring compliance with both UK and host country legislation. Employers should also consider how confidential information is protected whilst the employee is abroad, and how they could monitor the transfer of any confidential information.
It is possible that, depending on the host country, the employee will be at greater risk of cybersecurity threats whilst working abroad. Employers should consider how this threat will be managed. Through updating internal IT policies and liaising with IT teams about how the risk of cyber-attacks could be reduced.
What employers should do before approving remote work abroad
The main takeaway for any employers allowing employees to work remotely abroad would be to ensure that they have sought legal and tax advice in the host country prior to approving any such request. Ensuring compliance with UK legislation is one thing, but risking breaches in an unfamiliar jurisdiction poses a more likely risk. Have the terms of any such working abroad arrangement made clear to your employee(s), particularly the arrangement’s duration, in order to avoid any complications.
Contact our employment law team to discuss how to manage overseas remote working arrangements and protect your business.
