Monica Atwal comments in Personnel Today on questions an employer should ask if it is looking to adopt a ‘work from anywhere’ strategy.
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“Detailed assessment
Monica Atwal, managing partner of law firm Clarkslegal, says there are a number of questions an employer should ask if it is looking to adopt a ‘work from anywhere’ strategy. “The reality is that the business will need to do a detailed assessment of the consequences to both them and the employee,” she advises. In the meantime, organisations should ask:
- Will the ability to work anywhere apply to all staff, both existing and new? Is there the risk it could create a tiered workforce?
- Will the role be permanently based in another location, and if so, is it easier to make the employer a company in that jurisdiction?
- Does the role support a particular jurisdiction and who is the employing legal identity (the company?)
- Will the employee need to travel for work? Can they work from anywhere and change their location at any time? Or will certain employees work abroad for fixed limited periods?
The answers to these questions will determine how arrangements are set up, she adds. When considering issues around tax, for example, the host country generally has primary taxing rights over the employment income that the employee earns while physically working in that country.
However, Atwal advises, if there is a double tax treaty between the UK and the host country, the employee may be exempt from income tax if they are a tax resident in the UK and they are not present in the host country for more than 183 days over a 12-month period.
“A short stay abroad in many locations is not going to result in the employee becoming liable for host-country income tax,” she explains. “However, each country may have complex rules on calculating the number of days and the rolling period.
“Also even if an organisation and employee seek to rely on the double tax treaty, If you have an employee working in an overseas company you may need to register with local authorities as an employer and/or report on the income that is being paid to the employee.”
A short stay abroad in many locations is not going to result in the employee becoming liable for host-country income tax,” she explains. “However, each country may have complex rules on calculating the number of days and the rolling period.”
Global reach
If they can get to grips with these practical considerations, however, businesses will be able to access a far more diverse range of employees, whether that’s individual contractors offering hard-to-find skills or the perfect candidate for a permanent role who happens to be based abroad. Smaller businesses, by the same token, will be able to compete with bigger employers because they too can reach out to talent anywhere.
“Hiring remotely helps to legitimise smaller businesses regardless of their scale to compete with bigger ones,” says Ben Thompson, CEO and co-founder of HR platform Employment Hero. “We know that geographical diversity can be managed and adds immense value to an organisation. Having employees working in different locations across the world can support smaller businesses to access a previously unreachable market cost-effectively.”
The reality is that the business will need to do a detailed assessment of the consequences to both them and the employee.” – Monica Atwal, Clarkslegal
It’s important, however, not to forget that keeping a globally dispersed team engaged and cohesive can be more of a challenge than it may be for one that operates in the same country and time zone.”
