As remote work becomes more widespread, the concept of Working from Anywhere (WFA) is increasingly seen as a key employee benefit and an attractive tool for recruiting top talent.
However, according to employment law specialists Daniela Korn and Praveen Bhatia of Tan Ward, employers must carefully consider the legal challenges and risks that come with WFA arrangements.
Daniela Korn, Head of Employment and co-owner of Tan Ward, cautions: “With the rise of remote work arrangements, employers must be vigilant about the legal and financial implications of WFA.” While WFA offers potential benefits like higher employee satisfaction and reduced business costs, it also presents significant legal complexities, especially when employees work across different jurisdictions.
For example, an employee working abroad could inadvertently create tax liabilities for their employer or lead to legal complications by establishing a ‘Permanent Establishment’ in another country, even if the business has no physical presence there. Compliance with local employment laws, tax regulations, data protection rules, and health and safety standards are all challenges that arise when employees work from multiple locations.
The Risks of Cross-Jurisdictional Work
Employers need to proactively manage these risks. Although allowing employees to extend holidays by working remotely from another country may seem like an attractive perk, it can carry serious implications. Employees could violate immigration laws, for instance, by working while on a tourist visa, potentially exposing both themselves and their employers to legal penalties. “Turning a blind eye to these risks can have serious consequences for businesses,” warns Korn.
With the relaxed regulations during the COVID-19 pandemic now mostly phased out, businesses must develop clear policies for managing WFA requests. Employers need to carefully consider the legal implications of remote work in different countries and be prepared to handle issues such as tax obligations, visa compliance, and data security regulations.
Praveen Bhatia, co-owner of Tan Ward, stresses the importance of awareness and preparation. “A lack of awareness could expose companies to unforeseen liabilities,” she says. “Ignoring the legal implications is a risky strategy that could lead to costly consequences. Employers should seek expert guidance to ensure compliance and minimise potential legal pitfalls.”
The Need for a Strategic Approach
The decision to implement WFA policies should not be taken lightly. While flexibility in work locations can improve employee retention and satisfaction, it must be balanced with the operational and legal complexities involved. Businesses must evaluate WFA requests on a case-by-case basis, considering the unique legal landscape of each jurisdiction where employees plan to work.
Daniela Korn emphasises the importance of strategic decision-making: “Each individual request should be considered on its own facts as no two scenarios will be the same. It is therefore important that employers are clear with staff as to the process which needs to be followed. This is to ensure the company has the opportunity to make the necessary assessment rather than providing blanket approval for cross-jurisdictional working requests.”
