We have surveyed employers from a cross-section of businesses to find out how they are responding to requests from employees to work remotely from overseas.
Our survey collected data from 5 May to 20 May 2022. We received responses from employers across 21 sectors, collectively employing more than 800,000 employees.
Our key findings
The survey confirmed that this is an issue that the vast majority of employers are having to address. 98% of respondents confirmed that they have received requests from employees to work remotely overseas since the start of the pandemic.
Our results also indicated that employers are moderately concerned that employees might leave to join competitors if they do not allow them the flexibility of working remotely overseas. This suggests that employers view the flexibility to work remotely overseas as a means of retaining valued members of staff, rather than simply as a recruitment tool.
This is a developing area which can be complex, fact dependent and challenging for employers to negotiate. It creates a number of issues and potential risks for employers, including in relation to tax and social security, local employment rights, data privacy and immigration, which are discussed further in our Inbrief guide. However, perhaps reassuringly for employers, our survey suggested that in practice the vast majority of remote working overseas arrangements have not yet been scrutinised by overseas authorities.
Nevertheless, the complex and potentially risky nature of this type of arrangement may explain why
our results showed that, although the majority of employers (approximately 4 in 5) are allowing some kind of remote working overseas arrangements, there appears to be no clear consensus about which restrictions, if any, are imposed on these.
How are employers restricting the right to work remotely from overseas?
Our survey asked respondents to provide information about the restrictions (if any) that they impose on remote working overseas arrangements.
- Time limit: A third of the employers that allowed employees to work remotely overseas set no specific time limit on the duration of their stay and determined each request on a case by case basis. Where employers did set a specific limit, our results showed a wide range of approaches. The most popular timeframe (26% of respondents) was up to one month in any 12-month period.
- Restrictions on specific countries: Over half of employers did not impose specific restrictions on the countries that employees could work from if they could obtain a right to work there. Instead they decided whether to allow the arrangement on a case by case basis. Of those that did impose restrictions, reasons included tax implications, sanctions, cybersecurity, day one employment rights and time zones. Additionally, 21% of respondents told us that their employees could only work remotely from countries where they already had a permanent establishment.
- Payment of costs: Nearly half of the employers surveyed did not ask employees to cover any costs associated with facilitating their overseas working request, whereas a quarter asked them to cover all of the costs incurred. In other cases, employers asked employees to cover specific costs including visas, additional tax and social security and/or the cost of mandatory benefits required in the overseas location.
- Method of engagement: The most popular method of engagement was for employees to remain employed by their original employer while working overseas. However, other approaches such as secondments, direct employment by a local branch or entity, and employers of record were used.
What can we expect in the future?
Our results show that the majority of employers are allowing employees to work remotely overseas. However, the restrictions that are placed on these arrangements vary significantly between organisations. These disparities may well be a product of the complex and fact dependent nature of remote working overseas arrangements which means that it can be difficult to take a “one size fits all” approach. Additionally, the pace at which the demand for these arrangements has increased has made it challenging for both employers and legislators to keep up.
This is a developing area which we expect to remain on the agenda for employers going forward. Certain countries have already taken active steps to regularise and facilitate remote working overseas arrangements (e.g. through the introduction of specific remote working visas) and we have seen an increase in the implementation of formal remote working overseas policies by employers. Therefore, while decisions will always be driven in part by the risk appetite of each employer, it seems likely that we will see a more standardised approach emerge over time.