Template Policy for Remote Work Abroad

Streamline your remote work agreements with our user-friendly template 👇

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Remote work abroad means the possibility of working in over 190 countries worldwide. The number of laws and regulations that may apply to employees temporarily working remotely abroad is extensive.

Avoid unexpected surprises and make clear agreements with your employees regarding remote work.

As an employer, you need to be protected.

Success begins with a clear policy.

Naturally, there is a clear relationship between Workations and corporate policy. What are the expectations for employees and how does it benefit the company? Clarity is beneficial for everyone. Fortunately, you don’t have to come up with it all by yourself. That’s why we have developed a handy workation policy template that you can customize yourself. 👇

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Why is policy necessary for remote work from abroad?

Risks for employers when employees work from abroad

Payroll obligations

As an employer, you want to avoid having to register your company abroad because one or more of your employees work remotely there for a longer or shorter period. That would unintentionally create an obligation to establish a complete payroll administration abroad. The registration requirement risk does not apply to companies already present in the countries where their employees work remotely. Therefore, multinationals and large consulting firms typically limit remote work to countries where they already have offices.

Tax risks

As an employer, you remain responsible for the payment of income tax and other employee contributions. If an employee temporarily works from abroad, you need to ensure the correct tax and contribution payments per country. If an employee is considered a permanent representative of the company in another country, your company may be obligated to pay corporate tax in that country.

Cybersecurity

Every company is legally obliged to protect its own business information, as well as that of its customers and partners, against infringement and theft. IT security risks increase when employees work from unsafe countries or accommodations. Logging into publicly accessible Wi-Fi networks or not using a VPN connection can lead to concerns. To prevent this, an independent policy for remote work is necessary to regulate the behavior of remote working employees.

Employer liability

Occupational health and safety legislation and employer liability for work-related accidents of employees remain fully applicable. This applies both in a 'work-from-home' situation and when an employee works remotely from abroad. In some jurisdictions, such as Germany, employers even have a broader duty of care for employees working from another country compared to employees working domestically.

Technology

The risk of damage, loss, or theft of company property, such as a laptop, increases when an employee travels more frequently. The workplace and accommodation during a workation also have an impact (e.g., a hotel vs. a hostel).

Data privacy & GDPR

Data processing by employees in some other countries may conflict with GDPR regulations.

Risks for employees working remotely from abroad

Double tax liability

During a longer stay abroad or even from day one in another country, an employee may incur double tax liability. The Netherlands has tax treaties with a large number of countries to prevent double tax liability for short stays abroad. For treaty countries, in most cases, income tax must be paid only after a stay of >183 days in another country.

Residence & work permits

Depending on the purpose and duration of a stay abroad (e.g., workation vs. semi-permanent relocation), the destination country may require residence and work permits. The rules vary by country. For a quick reference guide, refer to the Worldwide Personal Tax and Immigration Guide 2021-22 prepared by Ernst & Young.

Insurance coverage

Damage or loss of, for example, a company laptop, costs for (medical) assistance, or temporary inability to work while abroad (e.g., due to a broken laptop) may not be covered by standard business insurance. A travel insurance with the appropriate coverage is necessary.

Quality of medical care

If an employee requires medical assistance during their stay abroad, receiving appropriate and high-quality care is not guaranteed in every country.

Which companies have gone before you?

Frequently Asked Questions by Professionals and Business Owners

We’ve received many questions. Learn from the inquiries other organizations and employees have made. Their questions and our answers.

Why is it important to limit the allowed duration of remote work for employees abroad? The reason for this is that laws and regulations regarding social security, taxes, and (labor) legislation differ per country, and these rules are often not set in stone. As an employer, you want to avoid unintentionally creating a permanent establishment in the host country or activating regulations to protect employee interests unintentionally. As a precautionary measure, leading companies have limited the time employees can work remotely from abroad to 6 to 8 weeks per year.

If one of your employees is considered a legal representative of the company in another country, this may lead to a tax obligation to pay corporate tax abroad. To avoid this risk, employees, including management, are not allowed to: make management decisions; sign contracts; or legally represent the company to other parties while abroad.

When creating a list of pre-approved countries from which employees can work remotely, various factors need to be considered. Factors such as the time difference, personal and IT security risks, and the suitability of a location for remote work (e.g., considering local internet speeds) are all relevant.

In general, many countries do not pose a significant safety risk and have well-functioning legal systems. However, some countries have a history of economic espionage, are in a state of war, have a significant risk of state-sponsored hacking activities, or have an increased risk of theft and fraud. Not every location is suitable for productive remote work and should be considered from an IT security perspective.

The IT security policy instructs employees on how to keep company data secure and is an essential tool for data protection. Considerations such as choosing locations for remote work, using a VPN, encryption, and general instructions on how employees should behave abroad should be part of the IT security policy.

Data protection remains relevant even when an employee works from abroad. GDPR requires companies to keep and secure personal data privately. The employer is legally responsible for data protection, even when employees work remotely from abroad.

Allow employees to make agreements with their managers regarding collaboration methods and feasibility of remote work from the chosen destination. This ensures effective collaboration despite possible time differences and allows for assessing the impact on the team as a whole.

Some companies have added specific guidelines to their policy for remote work from abroad for certain positions. For example, if the employee’s role is customer-oriented, there should not be more than a 4-hour time difference with the chosen workation destination, unless agreed otherwise with the manager. In other cases, employees who have just started with the company or employees who are about to leave may be excluded from the privileges of working remotely abroad.

Who approves workation requests? What to do when things don’t go as planned? How to ensure adequate coverage of employee insurance? 

These are just a few examples. There are still many aspects to consider. Fortunately, you don’t have to start from scratch. Feel free to use our FREE template policy for remote work abroad.

That's why employers choose a "one-size-fits-all" policy

Due to the complexity of differences in tax and labor legislation between countries, most companies opt for a “one-size-fits-all” approach for their remote work policy.

Want to get started yourself? Make use of our FREE sample Workation policy. 👇 Compiled based on the best practices of some of Europe’s leading companies.

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