Remote workers

When employees work remotely in the country they normally live and work there is unlikely to be a problem (unless state or cantonal boundaries are crossed). However, if the worker is performing their role in a different country to where their employer is based, this can lead to a multitude of regulatory obligations that employers need to understand and ideally, have a policy and process to manage.

Failure to do this could lead to penalties, reputational loss, staff retention issues, management by exception and employee dissatisfaction.

Additionally, employers should consider the contractual arrangements for these workers i.e. whether it would be more effective to engage these employees as consultants or via an employer of record.

The main areas that employers need to consider

Immigration	Does the employee have a legal right to work in the country they are based in?
Corporate tax	Will corporate tax and reporting be required in the host location?
Payroll withholding	Will the employer be required to withhold taxes in the host country?
Social security	In which country will social contributions be due?
Data protection	Are there any controls needed to mitigate any data transfer risks?
Legal	Is the employment contract valid and effective?
Pension provision	Are there any mandatory pension rules and what is the impact of continuing contributions to the company’s pension scheme?
Benefit provision	Is the employee benefits package still appropriate and effective?

Employers should have policies and processes to manage these obligations in place before approving remote worker requests.

Remote worker policies typically place thresholds on:

The number of days the employee can work remotely overseas per year (we have seen thresholds of 0, 30, 60 and 90 days).
The countries that are “in scope” and restrictions on the activities that can be undertaken overseas.

We see technology as an enabler to help employers implement this. Forvis Mazars’ app-based technology tool Track Global can be used by employers to help them manage remote worker requests, foresee compliance risks, and take action to mitigate them.

Together with the insight offered by Forvis Mazars’ global team of tax and immigration professionals, Track Global is a powerful tool that can be used by employers to manage regulatory compliance risks.

Our services

This can be a complex area, and we recommend employers obtain professional support in managing their PAYE obligations in respect of NRDs.

Help implement policies and processes to identify NRDs that have a liability to tax (and potentially NIC) and mitigate UK tax exposure.
Consult on structuring contractual arrangements for directors to achieve tax efficiencies and, ensure compliance with employment tax and payroll obligations.
Determine PAYE compliance obligations, and NRD liability to UK tax and NIC.
Advise on the tax reliefs available in respect of travel, subsistence and accommodation expenses.
Provide personal tax returns to support NRDs.
Negotiating settlements with HMRC in respect of NRDs earnings in earlier years that have not been subject to PAYE