Joerg Riebel (Class of 2021)
Work From Anywhere - A Boon for Employees, A Nightmare for Employers?
About a year ago I read an interesting article in the Harvard Business Review (https://hbr.org/2019/08/is-it-time-to-let-employees-work-from-anywhere) about the ‘Work From Anywhere’ trend and its impact on worker productivity. At that time no one imagined that remote working would become the new norm within the year.
‘Work From Home’ by itself comes with several challenges for an organisation, be it team cohesion, supervision, training or cybersecurity. These issues have been put to the test during the last few months and one can hardly open a newspaper or magazine without an article or commentary covering this topic. The general consensus seems to be that we all need to upskill on how to host, moderate or utilise video-calls, collaborate productively in virtual teams, and keep up our fighting spirit, optimism and grit during times of solitary confinement while at home.
‘Work From Anywhere’ comes with additional challenges in the areas of labour law, immigration and taxation. These are typically not impacted by remote work arrangements, as long as the employer and employee reside within the same jurisdiction. However, during the pandemic a number of people were stuck abroad and could not easily travel across borders to return to their regular place of employment.
Labour law in the jurisdiction an employee resides may limit the number of hours they are allowed to work and the level of surveillance employers are allowed to apply. Especially if work is completed outside the office, managers may feel uncomfortable operating based on trust alone.
Immigration may be another point of concern for employees working from anywhere. Do they have the right visa to conduct work in this country or are they on a tourist or business visa that may not encompass office work. Another issue to consider is visa extensions. With reduced working hours, remote working, and in general, reduced capacity at the immigration department, even a routine visa extension may be delayed – requiring the employee to leave the country (and potentially return on a tourist visa, and/or need to self-quarantine).
Finally, taxation needs to be considered. E.g. income from services rendered in Hong Kong during visits not exceeding a total of 60 days in the year is excluded from tax. What happens if an employee cannot leave for COVID-19 reasons? Other potential tax traps to consider are:
- Employee’s personal tax residency status
- Social security taxes
- Payroll taxes and payroll reporting obligations
- Employer residency and permanent establishment
- Transfer pricing
Some jurisdictions, Australia for example, released guidance on how to report taxes for temporarily displaced workers mitigating the compliance risk during the worst of the pandemic. But it requires employers to be vigilant around how these temporary measures apply and when the regular rules return.
Remote working brings a lot of challenges for employees as well as employers. In addition to challenges in the areas of HR, Learning & Development, Supervision & Management as well as IT-infrastructure & Cybersecurity, regulatory compliance is a key concern of employers. As no one can foresee when a viable vaccine will be available for mass distribution, or whether the current work arrangements become permanent, companies should review and plan how to accommodate their employees’ desire to work remotely or work from anywhere for the long-term.
Industry: Human Resources
Company: YT Advisory
Job Title: Founder