Post Brexit: Key HR considerations of remote working in the EU

 

Remote working looks set to remain, and for many, has become a normal and desired part of working life. Some employees have used the increase in remote working as an opportunity to work away from home in holiday homes or have even relocated to other countries in search of a better lifestyle.

Some countries are actively encouraging remote workers. Barbados, for example, recently launched The Welcome Stamp in response to the Covid-19 pandemic, allowing nationals from other countries to live and work there for a year while doing their jobs for employers in other countries.

Similar options are also available within the EU. However, the UK’s recent departure from the EU has meant there are legal implications that must be considered by HR for any employees operating remote working in a European country.

Before 31 December 2020, if an employee was a UK and EU citizen, they had the right to live and work in another EU member state. This, however, changed for UK citizens when the Brexit transition period ended. Organisations will now need to decipher the employment law and immigration implications of such a move and how it impacts their business.

 

So, what are the risks?

Social Security

Social Security treatments differ to tax, meaning Social Security may be due (employer and employee) on earnings. 

Individual Tax Return

An employee working outside of the UK may trigger personal tax filing and registration obligations with Local Tax Authorities.

Corporate Issues

There may be a risk that an employee creates a sufficient presence in the foreign country making it liable for local corporate taxes or value added tax (VAT). Although most countries are sympathetic to travel restrictions, BDO highlight ‘the longer the travel restrictions remain in place, the greater the risk is likely to be in this area” (1).

Immigration Considerations

An employee who intends to work in another jurisdiction must hold the correct right to work documents, visa, or work permits for the respective country.

Employment Law

A UK employee working abroad will likely continue to be subject to national employment laws. However, there is a risk that the employment laws of the host country may also apply. For example, national minimum wage, pensions, holidays, redundancies, to name just a few.

Although the above are some of the main legal risks, many other individual considerations must not be ignored. Businesses must continue to support employee well-being, upskilling, and development, implementing strategies that work both in the workplace and remotely.

Building a workforce of global, diverse, and remote talent is a compelling argument for any business as it offers a genuine solution to today’s war for talent and embraces a new way of working. That said, it is important to note that working in breach of any of these risks can have a serious consequence for both individuals and businesses.

How can Avencia support?

Our workforce solutions are individually designed to fit your organisation. Whether you need a strategic partner to lead the whole Talent Acquisition transformation or specific project consultancy to support key challenges, we blend strategic advice with practical solutions and global technology, enabling you to deliver your HR talent strategy.

Our Technology Solutions enable HR and talent acquisition to deliver a ‘Total Talent’ strategy, creating the right hiring outcomes for our customers whatever your needs, by automating processes, reducing administrative burden, enhancing candidate and manager experience, and leveraging data insights.

Avencia complements existing HR and Talent Acquisitions functions and our strategic permanent recruitment outsourcing services include pop-up, project based RPO, enterprise RPO, and plug-in RPO for large in-house Talent Acquisition teams.

Find out more here. 

References: 

(1) Accountants and Business Advisors (2020) Article: Corporate tax residence and COVID-19. BDO United Kingdom Insights, 27 April. Available here.