Pre-pandemic, remote working polices were like chair covers at a wedding. Nice to have but not worth shelling out for the decorative effect. Fast forward three years and failure to have such a policy in place may soon be an offence (if the new Remote Working Bill is enacted).
For many employees however, a simple remote working policy won’t go far enough. A limited housing supply, rising rents, and let’s face it, notable absence of sunshine, will make it difficult to entice employees who moved abroad during Covid back to Ireland.
While the Remote Working Bill does not have an international element, implementing a Remote Working Abroad Policy now can be an opportunity to formalise existing arrangements and deal with future requests consistently.
The main issues with employees working remotely from abroad are set out below. Additional considerations (tax, social security, access to benefits) will also be relevant to the employees themselves.
The pandemic resulted in the suspension of life as we knew it. Priorities were re-evaluated resulting in many non-nationals returning home and young professionals moving abroad in search of a better quality of life.
While this worked well for some, it’s not all pina coladas and getting caught in the rain. Many large organisations have no real idea of where employees are currently based and the implications of re-location on the business.
As emergency amnesties (see below) come to an end, now is the time to take stock and evaluate.
The first step is to conduct an audit to understand where all employees are based. You’ll then need to think about whether the employee’s role can actually be performed abroad and the practical and legal implications of relocation for the business.
Is your organisation a regulated financial service provider (RFSP)?
If so, you’ll need to check whether remote working from abroad is allowed by the Irish Central Bank.
For example, the Central Bank would ordinarily expect pre-approval controlled functions to be performed in Ireland. If such individuals wish to work abroad, this will need to be discussed with the Central Bank in advance.
You should also check the terms of your regulatory license as carrying out certain activities abroad may be a breach of its terms.
Although it may be possible to carry out a particular role from abroad, as with any remote working arrangement, certain practicalities will need to be addressed to ensure this is done successfully.
Fostering mutual trust is key. While some form of monitoring may be needed, this should not be overly intrusive. For example, a recent survey of 2,000 remote and hybrid US employees found that 59% of workers felt stressed, unappreciated and resentful of surveillance practices. Hardly a winning tactic in the current battle for talent.
The Great Resignation also poses more risk when employees are working remotely from abroad. Increased employee fluidity puts a company’s data at risk, especially where the employee has uninterrupted access in different time zones. Access to files should be provided on a need-to-know basis, and particularly sensitive information password protected.
You’ll also need to give some thought to:
- visa requirements;
- employers’ liability and property (e.g. for laptops, phones and other equipment) insurance cover;
- geo pay issues;
- updating D&I and Health & Safety policies; and
- employee engagement and management training initiatives
all of which are affected by remote working from abroad.
Irish employment law may not apply to employees working remotely from abroad.
If the situation is long term, you’ll need local advice on mandatory obligations such as health and safety requirements, minimum wage, leave and termination rights. A local employment contract may need to be drawn up to reflect this.
You should also review and up-date any restrictive covenants in place. Such restrictions will need to be tailored to specific roles and information. Local advice may be required in relation to geographic ambit, duration and enforcement.
Tax and social security
If an employee is now working from home in another country, it may affect their tax residence and social security position and, as a result, the company’s payroll obligations.
Depending on the employee’s role, the company’s tax position could also be impacted. Even if such a move does not influence the company’s tax residence, it could be found to have a taxable presence (subject to tax and reporting requirements) in the other jurisdiction. This is more likely where a senior employee is abroad for an extended period.
While the Irish Revenue confirmed that they would disregard relocation linked to Covid during the pandemic, this is no longer the case. You’ll also need advice on the foreign tax position, regardless of the Irish Revenue situation.
You should keep personal data secure by raising awareness via training and tightening Data Protection policies currently in place. The guidelines on remote working issued by the Irish Data Protection Commission apply both to remote working in Ireland and abroad.
Your data protection risk will be heightened if employees are processing personal data outside the EU, and you will need to comply with international data transfer rules.
Remote access to corporate networks also raises cyber security concerns.
Some steps you can take to address this include using anti-viral software and device encryption, conducting systems audits and testing and having an effective cyber response plan in place.
Tempting as it may be to either keep remote workers buried abroad in the warm sand or simply refuse all requests to work abroad, neither option is advisable. Ignoring these issues misses the opportunity to address them and disgruntled employees will vote with their feet.
In short, what you need to do is conduct an employee audit, assess risk and seek detailed advice. Many of the above risks can be reduced if arrangements are short term. Our team is happy to help if you would like to discuss further.