Working remotely from abroad: The continuing impact of COVID-19

Author: Kate Gamester

Many employers that have introduced hybrid working arrangements are finding that employees who have worked remotely from overseas want to continue to do so. Employers may therefore have additional considerations when formulating any hybrid and return-to-work policies.

The new world of work

Homeworking is no longer a government requirement, but many employees are now used to homeworking arrangements and are experiencing better job satisfaction and work-life balance. Employers are therefore implementing hybrid working patterns for staff retention and talent recruitment reasons.

At the same time as the shift to homeworking, when international travel restrictions lifted temporarily during the pandemic, there was a marked increase in overseas national employees requesting to work remotely from their home country.

Thanks to developments in technology, many employees were able to perform their role from anywhere, and many want to continue to do so.

This has led to some employers facing a new issue: some employees are reluctant to come back to work in the UK office.

In addition, some new recruits are seeking to work remotely from their home country to avoid the upheaval of moving to the UK. Initially, many employers encouraged this to save on visa costs.

Immigration requirements

It might be assumed that working abroad on a temporary basis will not give rise to any immigration concerns.

However, if an employee requests to work remotely from overseas, say from a holiday home, in a country where they do not have the right to work, the employer needs to consider the visa requirements in that particular jurisdiction before granting such a request.

Business visitors

To visit another country as a business visitor, an employee may require the equivalent of a UK business visitor visa.

While visa waiver programmes are in place in particular jurisdictions, meaning that the individual will not need to apply for a business visitor visa in advance, they will still be bound by the rules on what kind of work business visitors are permitted to do.

In most jurisdictions - the UK included - any type of "productive" work is strictly prohibited.

Individuals seeking to enter the UK as a business visitor must not intend to "work" in the UK. This includes taking up employment, doing a work placement or internship and doing any work for a UK business or organisation.

Business meetings are permitted, alongside certain other activities, but these are very limited and are generally associated with activities that would typically be undertaken during a business trip, for example site visits or negotiating a contract.

In addition, trips should be kept as short and infrequent as possible. The longer a trip is, the harder it is to argue that no productive work is being carried out.

Visitors are permitted to undertake activities relating to their employment overseas remotely while they are in the UK, such as responding to emails or answering phone calls. However, this should be incidental to the main purpose of visiting the UK, for example to attend a business meeting.

Digital nomads

In response to the demand for people to work remotely from overseas, a number of countries, including some that are in the EU, have created a new "digital nomad" visa category to facilitate this from an immigration perspective. One initial consideration should be if a digital nomad visa scheme exists in the country from which the employee wishes to work or continue to work.

Typically, digital nomad visas permit long stays in the host country and allow the holder to work during their stay, provided that they do so independently and remotely, ie working in the local labour market is generally not permitted.

At present, the UK has no such category, and the Government has no plans to implement one.

Work visa

If the employee seeking to work abroad requires a work visa, such as the equivalent of a UK skilled worker visa, the HR team will need to bear in mind the current status of the immigration system in the relevant country. If a digital nomad scheme exists, that may be a viable option, depending on the circumstances.

Penalties for illegal working

Penalties for illegal working can be severe, both for the individual and their employer.

Every jurisdiction has different rules regarding business visitors and different immigration schemes, so HR teams should be aware of the requirements of the specific location.

Sponsor licences

Employers need to give consideration to their reporting requirements under the sponsorship system as well as the employee's current immigration status in the UK, and how a prolonged trip overseas might affect this status or any future UK immigration application.

Reporting requirements

Sponsoring employers have mandatory reporting duties. In relation to home/remote working, current government guidance states: "You do not have to notify us if you're sponsoring employees who are working from home due to coronavirus".

However, other changes to working arrangements must still be reported as usual. Therefore, it is likely that voluntary homeworking and working from abroad need to be reported.

Absences and permanent residency

To qualify for indefinite leave to remain, sponsored skilled workers must not be absent from the UK in excess of 180 days in any rolling 12-month period during the five qualifying years they need for settlement. The Government updated the law to the effect that any period spent outside the UK will not count towards the 180-day limit if the absence is due to a pandemic.

This would apply in situations where a sponsored migrant is stuck outside the UK due to the coronavirus crisis, but arguably it would not apply to those who have voluntarily selected to work, or continue to work, from home overseas.

Employers should take care that migrants do not exceed the 180-day limit, as this could risk refusal of an application for permanent residency at a later date.

Absences are also assessed for the purpose of indefinite leave to remain applications under other routes, settled status under the EU settlement scheme and British citizenship applications. Employers should consult the relevant policy guidance for the application type, but note that voluntary absences may not fall within any pandemic-related relaxations to the normal rules.

New hires and right to work checks

In circumstances where the employer is recruiting an employee from overseas, the new recruit will require a UK work visa only if they are physically undertaking work in the UK.

Therefore, where the employee is employed to work from their home abroad, provided that they will not be doing any productive work in the UK, there are no UK immigration considerations.

This includes the requirement to carry out a UK-compliant right to work check - this will not be necessary.

Should an individual who has been recruited from overseas then come to the UK for the purpose of continuing their work, they must hold a valid work visa (such as a skilled worker visa). Employers will have to carry out a compliant right to work check before or on the morning of their first day of work in the UK.

Employment law and data protection

Employees who are permitted to work for extended periods outside the UK may accrue employment protections in the territory in which they are working and residing. This may be the case even if the arrangement began on a temporary basis but has inadvertently become a longer assignment.

Each case will be different depending on local laws, so employers should take legal advice in relation to the relevant jurisdiction to establish what these rights might be and to assess legal risks and possible exposure. XpertHR's International tool provides legal guides for employers with staff based outside the UK.

HR teams should also be aware of data protection requirements if the employee's work will involve transfers of personal data from the UK to the host country and back again. See Transferring personal data outside the UK and Transferring personal data into the UK for more information.

Tax

Additional tax liabilities may be triggered if an employee works abroad for an extended period of time. The tax consequences will depend on the individual circumstances and the jurisdiction in question.

For example, an employer may become obliged to account for local tax and social security in respect of amounts paid to the employee while they are abroad, in addition to continuing to deduct tax and national insurance through the PAYE system from within the UK.

In addition, local corporation tax liability might be triggered through the creation of a "permanent establishment" in the local jurisdiction, even if this happens inadvertently.

This is a complex area and employers should seek specialist advice in advance of agreeing to any arrangement that involves working remotely from abroad.

Reluctant returners

Employers have reported instances of employees who are reluctant to return to the UK after a period of remote working from overseas.

This includes reports of increased flexible working requests, some emanating from employees who purchased property abroad during the pandemic.

If an organisation does not wish to adopt a hybrid working policy (including one that permits employees to work remotely from overseas), it should be clear about this.

However, some organisations have taken the step to adopt hybrid working policies that permit remote working from abroad.

Employees at Ocado Group, the tech firm behind the online retail company, can work remotely for one month a year, although this policy does not apply to the retail section of the company.

Revolut's "digital nomad" program also lets staff work anywhere in the world for two months a year - notably, only if the employee has the right to work in their destination of choice.

Employers that are considering such hybrid working policies must seek local tax, employment and immigration advice.

Where an employer intends to introduce a hybrid policy, the policy should, among another things:

• set out who is eligible for hybrid working, for example, the policy could apply to all employees or to only some roles where not all jobs in the organisation are suitable for hybrid working;
• make clear whether hybrid working is mandatory or optional and, if optional, the policy should explain how to request hybrid working; and
• set out the number of days per week that employees are expected to work in the office and the number of days that they can work remotely.

If an employee does not want to return to the workplace, even on a hybrid basis, the employer should discuss the reasons why with them.

Ultimately, it is for the employer to determine what flexibility they are prepared to offer, making sure to take into account any discrimination issues.

Employers could consider alternative options for those who do not wish to return to the office at all, such as a pay decrease.

Currently, only a very limited number of organisations have adopted such a policy, and it is not without potential discrimination issues. For example, requests to work permanently from home are more likely to be made by women who care for young children.

It will be important to seek employment law advice ahead of considering such an option. Generally, most employers are offering a hybrid model without measures such as mandatory pay decreases.