Work from wherever? | Things to consider before allowing employees to work from abroad

Written by Alexandra Farmer on 25 May 2022

A few years ago, the idea of working from anywhere in the world seemed like a pipe dream. But in 2022, the growing prevalence of remote work has made it a real possibility.

With the pandemic serving as a large-scale work-from-home experiment, organisations and their employees are now using the lessons learned to reimagine how work is done – and what role offices should play – in creative and bold ways. In some cases, this has given rise to a ‘work from anywhere’ mentality.

Indeed, Airbnb recently announced that all 6,000 of its employees will be able to work remotely from any location without taking a pay cut – a decision that caused 800,000 people to flock to its careers page.

In a similar move, Klarna recently told its 7,000-strong global workforce that they can choose where they work day to day, including giving them the option to work internationally for up to 20 days per year. The policy, it says, is based on its experience over the past few years and aims to balance employees’ desires with overall productivity. 

Clearly, there is appetite to work abroad, and some employers are embracing it. And with stories like these making headlines, requests from employees who want to do the same may soon follow. The question is, how remote is too remote? Is this any different to employees working remotely within the UK? And what do employers need to consider before introducing such a policy?

0 %
of employers we polled said employees have enquired about or requested to work remotely from abroad in the past 12 months

Dealing with requests

At WorkNest, we’re already seeing an increase in queries from clients whose employees have requested to work abroad.

Often these queries are linked to desires to move back to, or near to, family members who live overseas. Other times, people simply fancy a change of lifestyle and feel that given the seismic shift in the way we work, working abroad isn’t much more of a stretch.

Whatever the motive, requests should be made and dealt with through your normal flexible working procedures.

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Employer considerations

Moving to a remote-first model is one thing, but relocating to work from abroad, either on a permanent or temporary basis, carries with it various additional considerations for the employer.

Firstly, specialist advice should be sought in regard to tax implications, as there may be liability for additional income taxes or employee social security contributions that would need to be taken into account. The employee will also need to make their own separate checks on their situation in regard to any requirements for tax returns.

Additionally, employers will need to consider whether there is a risk of a permanent establishment being created in the relevant country. If so, this could give rise to tax and social security compliance obligations, and tax on any business profits that are attributed to the permanent establishment. Again, specialist tax advice should be sought as a preliminary consideration.

There may also be implications so far as immigration rules, insurance, and the applicability of employment and/or contract law of the foreign jurisdiction.

For instance, there could be additional local employment rights that apply, such as paid time off and minimum rates of pay, which would become applicable. Similarly, employers would need to check if it will be possible to comply with local health and safety requirements, as health and safety obligations vary significantly between jurisdictions.

From an insurance perspective, the employer would need to understand if their insurance policies cover employees working abroad, in the event that they have an accident whilst homeworking for example.

Other considerations include:

  • Right to work. Fundamentally, the employer would need to determine whether the employee has got the right to work in the country they are proposing to work from, and be mindful of whether working abroad may affect their right to work in the UK when they return. Immigration advice should be sought on this point.
  • Regulatory requirements of particular roles. Some roles may be limited due to regulation, for example a business regulated by the FCA.
  • The employee’s pension and other employment-related benefits such as medical insurance. An employer would need to review these to consider the relevant scheme rules and identify if it will be possible for these benefits to continue while the employee is living and working abroad. 
  • Expenses. It would need to be agreed who will pay for the employee’s flights and accommodation if they are required to attend the UK office. Other normal home working expenses, such as internet access, phone line, etc., should also be considered. 
  • Data protection. Depending on the employee’s role, they may be processing personal data. The employer would need to determine whether it’s legal to transfer personal data to that other country, and whether they would need to put any additional data security measures in place.

'I don't see the problem - I already work remotely!'

While employees might feel that working from abroad is no different to working remotely in the UK, it’s not so straightforward for employers – for all the reasons outlined above.

So does this mean that employers have more scope to reject a request to work from abroad given the numerous complications it could create for the business?

Ultimately, the grounds upon which an employer can refuse the employee’s request remain the same as in any other proposed flexible working scenario – that is, the refusal must relate to at least one of the eight reasons set out in the Employment Rights Act 1996. These include the burden of additional cost, the inability to meet customer demand, and a lack of work to do during proposed working times.

While the employee may be able to rebut some of these reasons – for example, ‘impact on quality and performance’ may be less relevant as an argument if the employee has been successfully working remotely in the UK for some time – it’s easy to see where the employer could make their case.

Given the list of potential issues that could conceivably arise, as well as other general considerations such as managing an employee remotely with limited in-person contact and the possibility of time difference issues, it shouldn’t prove too difficult for employers to establish reasonable grounds for rejecting a request to work from abroad. 

On the other hand, if you decide to agree, the change will simply need to be confirmed in writing as a contract variation.

Temporarily working from abroad versus permanent relocation

You may also encounter situations whereby, instead of relocating, employees decide to book a long trip abroad where they are planning to work for a month or so. From the employee’s perspective this could be a real gamechanger, allowing them to travel without dipping into their annual leave.

While some employers may not take issue with employees working abroad for short stints, others may be concerned about the employee’s commitment to work during this time.

This is understandable; if someone works full time and intends to take their work with them during a month-long trip around Europe, are they actually going to be working their normal hours? Will they have suitable set-up in a temporary location?

Ultimately, employees will still need permission if they want to work from somewhere that is ‘not the norm’. In this regard, it’s important that any business which allows home/hybrid working has a suitable policy in place to establish some ground rules; these should include a provision that any desire to work away from the primary remote working location, i.e. the employee’s home, must be requested and express agreement provided in advance.

This will help to prevent employees taking it upon themselves to jet off at a moment’s notice, laptop in tow, and give you grounds to take action if they do.

Even if you are happy to permit temporary working from abroad, the considerations outlined above in regard to permanent working from abroad would still need to be taken into account. And the longer someone works abroad, the more the additional liabilities will be triggered. 

Minimising disputes

Whatever your company’s position on employees working from abroad, it’s a good idea to make your stance clear ahead of time, as this will reduce the potential for issues later down the line.

Again, it’s important that any business that allows homeworking or hybrid working has a suitable policy in place. Such policies may be silent on working abroad – with the employer instead waiting to see if an employee raises the issue, perhaps for fear of ‘encouraging’ requests – or could include a short explanation that separate approval will be required from HR or relevant senior management.

You may be worried that if you grant a request for one employee, you could be setting a precedent which might make it more difficult to deny similar requests in the future. As well as putting you in a tough spot, an inconsistent approach could lead to disputes.

While each request should be assessed on its own facts – and one acceptance doesn’t obligate you to accept all that follow – if others are working remotely abroad and there is evidence of this being successful, colleagues are likely to rely on that as proof that the ‘business reasons’ for refusing the request don’t apply.

For this reason, while employers may recognise that allowing employees to work from anywhere in the world could have recruitment, retention and engagement benefits – all things which are incredibly valuable in the current climate – it’s important to consider requests from all angles to avoid making rash decisions that can’t be easily undone.

Related Content

Manage requests the right way with support from WorkNest

Need guidance on following a fair flexible working procedure? Dealing with an employee dispute? From practical advice to policy creation, WorkNest’s Employment Law and HR experts are here to help you communicate your company’s stance, manage requests compliantly and prevent hybrid working arrangements from hampering your team’s performance.

For more information on our fixed-fee Employment Law and HR support, call 0345 226 8393 or request your free consultation using the button below.

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