Remote Working Overseas

 In a post-pandemic world, working from home and hybrid working arrangements have become the “new normal” for many employers. The ability to work from home has offered employees increased flexibility in their working arrangements, with some employees moving “home” or relocating to a different country while continuing to work remotely for their UK-based employer.

Some employers are keen to accommodate requests to work remotely from abroad, in order to attract top talent and improve employee welfare. This article sets out some of the key immigration and employment law factors that employers should be aware of when considering such requests.

Immigration

Employers should consider what immigration restrictions may be in place which would prevent an employee from working from home in another country. In most countries, an employee will only be permitted to work remotely overseas if they are a citizen of the host country, or if they hold a relevant visa permitting them to work from that country.

Employees who return to their home country for a holiday or a short business trip are less likely to be problematic, provided they are only working overseas for a short period. Employee visits overseas for business will not usually attract any need for immigration permission, but the longer an employee remains in that country to work, the more difficult it will be to argue that they are only “visiting”.

A migrant with pre-settled status under the EU Settlement Scheme will lose this status if they are absent from the UK for more than two years. Similarly, most migrants with settled status under the EU Settlement Scheme will lose their status if they are absent from the UK for more than five years (or four years for Swiss citizens and their family members). Migrants with pre-settled status who are absent for more than six months in any twelve-month period may also unintentionally break their continuous residence, meaning that they cannot switch to settled status.

If a sponsored migrant were to undertake their UK role from abroad for a long period of time, this could result in their visa being withdrawn, jeopardising their ability to return to the UK to live and work, as the Home Office may argue that they no longer “genuinely” work in the UK. As with migrants with pre-settled status, working from abroad for prolonged periods may also impact on the sponsored migrant’s ability to apply for indefinite leave to remain after five years, if they have been absent from the UK for longer than 180 days in any twelve-month period.

Sponsoring employers may also face compliance action from the Home Office if they fail to report a change in place of work of sponsored employees, including where the employee has left the UK temporarily or permanently to “work from home”. Sponsors may be subject to suspension, downgrading or, in a worst-case scenario, revocation of their sponsor licence.

Any non-British or Irish nationals should always consider whether their absence from the UK may affect their visa status or their eligibility to make applications in the future, such as for settlement or naturalisation. Please see our article which highlights the recent changes to the UK Immigration Rules in respect of visitors to the UK who wish to work remotely.

Employment Rights

An employee working from abroad may attract employment rights in their host country while continuing to benefit from UK employment rights. This could put the employee in a more advantageous position regarding annual leave, minimum pay and any rights the employee has on termination, among other things. The extent to which an employee would benefit from local protections would of course depend on the length of their stay. Where an employee is planning to stay overseas for an extended period of time, employers should consider whether it would be appropriate to transfer the employee onto a contract of employment tailored to the host country, to ensure compliance with local laws.

In the UK, employers have duties in respect of ensuring the health and safety of their employees. This duty extends to home working and employers should be aware of any local health and safety legislation imposing positive duties on the employer in respect of health and safety.

A working overseas arrangement can also give rise to data protection issues, particularly where the employee’s role involves processing personal data. In this case, an employer should ensure that they comply with any local data protection laws and that they have sufficient organisation measures in place to protect data, particularly where data is being transferred across international borders.

Tax

Whilst we are unable to comment or advise on tax matters, we would recommend that employers be cautious of any potential tax implications of employees working from abroad, particularly where an employee’s stay overseas becomes extended or indefinite. In particular, the longer the arrangement continues, the greater the risk that an employee’s activities or presence in another country will create a permanent establishment in that country for tax purposes.

Employees will also need to consider how their residency in another country will affect their individual tax status and whether or not they will need to register with any local tax authorities in their host country.

We would encourage any employer considering a remote working overseas arrangement to seek appropriate tax advice.

In addition, here are some practical steps that an employer could take to reduce any risks:

1. ensuring that employment contracts and policies are updated to reflect overseas arrangements;
2. introducing a remote working policy, requiring advanced permission to work overseas; and
3. reviewing internal data protection policies and procedures to take into account overseas working.

This is a complex area which presents both practical and legal challenges. Any request received by an employee to work remotely overseas should be treated with caution and plans should be made accordingly. It is also recommended that employers seek legal advice in both the UK and in the relevant jurisdiction to ensure legal compliance. We have an international network of legal contacts and can put you in touch with an appropriate adviser from overseas.

Should you require any immigration or employment advice in respect of the matters raised in this article, please get in touch at [email protected].