Dealing with requests from employees to work overseas

Requests from employees to work abroad (or ‘workcations’ as they’re becoming popularly known as) have risen significantly since the end of the pandemic, with many seeking to utilise their newfound flexible working on a whole new level.

Whilst the future of workcationing looks bright for employees, it is crucial that businesses do not rush into this process before they properly understand the risks. The specific implications of an employee requesting to work overseas will depend on the particular circumstances, including the contractual position and the nature of the employer’s business.

When considering whether or not to grant such a request, employers will need to consider each case on its facts, taking account of the reason for the request and any adverse implications of a prolonged overseas stay. From an employment perspective, there will be a number of issues to consider. These will range from statutory employment rights to immigration, tax and social security, data protection, insurance and health and safety issues.

Factors to consider when an employee requests to work overseas

Initial factors

Where the employee’s normal contractual place of work is – we presume in the majority of cases that this is a place of work in the UK.

• Temporary or permanent moves – it is important to consider the length of the request and whether it is temporary or could become permanent. In most cases, we would suggest considering requests on a temporary basis only until the business can fully understand and assess the implications of the move.
• Approval – it is important that employees are aware that they need to seek approval in advance (and preferably in writing) from the business and not just an informal Teams message with their line manager before making plans, or travelling abroad to work.
• Can they work?– do not be tempted to agree to a request if it will be impossible for the employee to carry out their role effectively and lawfully from the country they would like to visit.
• Wider remote working plans– the specific issue of working abroad falls within the remit of the future of the workplace and where the business would like its staff to work from and how much flexibility they are willing to give in future. Whilst there are a number of positives in embracing flexible and agile working patterns, these do need to be carefully planned and thought through in advance of making such announcements.
• Consistency– we are seeing a number of clients reporting that they do not know where all their staff are or are surprised to find that some requests have been approved informally by line managers, whereas others have been refused. All such requests should be treated consistently and as fairly as possible in order to avoid complaints including discrimination.
• Personal circumstances– all the factors relating to the request should be considered. For example, some staff may make a request due to their mental health and to see family living abroad, whereas some requests may be in order to facilitate holiday plans. There isn’t a one size fits all solution, but it is important to have all the information in order to properly consider the request.

Practical points

Whilst working remotely, how will both the employee and the business deal with:

• Reporting lines and supervision
• Communication
• Attending calls and meetings
• Impact on the wider team
• Time zones and availability for work
• Meeting client requirements

Trust

It will take a certain amount of trust between an employer and their workcationing employee if the arrangement is to be a success.  However, due to the widespread adoption of homeworking, there are now a number of ways that employers can be certain that their employees are meeting required standards. Apps that track hours worked are an easy way to monitor an employee’s progress and workload, as well as the installation of IT programmes that can monitor computer activity, tracking when it is idle for longer than a set period of time. To mitigate any potential risks, employers should build an element of flexibility into any workcation contract so that they are able to end the arrangement if it isn’t working and retain control over the process.

Resource

As it currently stands, there is an onus on businesses to do a lot of the leg work in terms of HR and payroll when an employee requests to work abroad. For many organisations, HR departments are already busy, and this additional administrative burden will not be welcome. Until the workcation process becomes more bedded in, any employee looking to take advantage of this way of working would be well advised to do their research, gather the relevant information and make the process as smooth as possible when they start a dialogue with their employer.

Data protection and confidentiality

Another consideration for employers to think about when discussing working abroad is data security. An employee who works abroad is still subject to GDPR and data protection laws, and therefore is still obliged to keep all data secure and to process such data correctly. When considering data security for overseas workers, it is also vital for companies to put policies in place, such as ensuring that the employee uses a protected internet connection rather than working from an internet café or on public WiFi (which may open a firm up to the risk of security breaches). It is also important for employers to fully understand any and all local laws before an employee is allowed to take up a workcation opportunity and how this impacts the proposed arrangement and where the work is to be carried out.

If an employee’s role involves processing personal data, this could give rise to data protection issues, especially if the employee is requesting to work from a country outside of the EEA which is not subject to the General Data Protection Regulation and other EU data privacy laws.

Equipment and health and safety

Do they have, or have access to, the appropriate technology to enable them to work? Is any company property insured abroad?

With regards to health and safety, UK employers have a duty to protect the health, safety and welfare of their employees, which includes providing a safe working environment when they are working from home (including carry out risk assessments etc). If an employee works from home abroad, you should also ensure that it is compliant with any local health and safety requirements.

Employees will also need to comply with applicable public health guidance (e.g. quarantine periods).

Country-specific employment requirements

Each country has its own laws regarding tax and obligations for the employer, and it is vital to take advice to understand the tax position of an employee’s preferred destination, how the length of time that the employee will be in that country affects it and what the employer may be liable for. It is also important to consider the employment terms of the country that has been selected, as some, such as France or Spain, have better terms for employees when it comes to holiday entitlement, notice pay or redundancy, which must be taken into account even if the employee is to remain employed under a UK employment contract.

Some countries automatically impose employment rights on individuals whilst in the host country, even if short-term. Take advice in relation to the host country as they may acquire rights in that country that the business is liable or required to offer/implement.

Tax and social security

The main challenge around an employee taking a workcation is tax and making sure that they are not creating extra administrative and payroll obligations for their employer, by having a place of work in an overseas jurisdiction which is deemed a ‘permanent establishment’ for payroll purposes.

The UK employer should continue to deduct income tax under PAYE as well as employee NICs and pay employer NICs too. However, it is important to consider the impact of the employee’s absence on their tax residence position and the possibility of double taxation.

Immigration

Identify the status of the employee’s stay – the longer they live and work abroad, the harder it will be to classify their stay as a business visit. As an employer you’ll also need to consider any restrictions in the host country and you may need to take local immigration advice.

If the employee is not a UK national, then there may be issues on their return to the UK and what impact this may have on their status and right to work in the UK. A prolonged absence may delay their eligibility to apply for British citizenship.

What to do now?

Ultimately, it is unlikely that workcation arrangements will become truly commonplace, as there are only certain sectors and departments within organisations that can take advantage of them. However, those employers who are able to offer the opportunity for employees to work abroad may well become more accepting of the practice, particularly as it can be used to incentivise top talent to take up jobs when utilised as part of the recruitment process, helping the company to stand out in the jobs marketplace.

It must not be forgotten that workers in the UK – and abroad – have recently undergone a huge change in their working lives. For many, the traditional nine to five in an office is gone for good, and therefore it seems likely that requests for working abroad will only increase where it is possible to do so. However, businesses must assess these requests on a case-by-case basis and seek local advice from the jurisdiction of the country that the employee wishes to work from to ensure that all the risks and associated implications of the arrangement are fully understood and addressed before the workcation goes ahead. Where that is done and the arrangement is suitable for both the employer and employee, it then just needs to be carefully documented, with clear guidelines set out as to what is required and how the arrangement can be ended, should the employer decide it is no longer appropriate.

Working abroad policies

Depending on how many requests the business expects to receive, it may be appropriate to consider developing a working from abroad policy to ensure that these situations are dealt with consistently and fairly. Consider and work through all the factors outlined above to seek to minimise any surprises or risks.

Agree the terms of any temporary overseas working arrangement and record them in writing in advance. Ideally, these should clarify that:

1. The employee will be liable for any additional income taxes or employee social security and the employer can make such deductions as are required in this respect. They will also be responsible for any personal tax issues.
2. The employee is still working solely for the employer and their existing contract of employment;
3. The employee takes responsibility for ensuring they have the necessary technology and arrangements in place to enable them to work effectively whilst abroad;
4. The employee accepts that they are working remotely at their own risk;
5. The employee must comply with all applicable public health guidance both abroad and when returning to the UK.

Specialist employment legal advice

If you have any questions about employee requests to work overseas, or any other employment or HR issue, please contact our team of expert employment solicitors.