Written by Nick Pritchett, Legal HR Counsel at LegalEdge
It’s no secret that employers are now managing teams based in different countries. While it comes with its bountiful benefits—such as widening the talent pool—navigating the legal hurdles of becoming a remote, global workforce can be tricky.
So, we caught up with Nick Pritchett, Legal HR Counsel at LegalEdge to cover some of the do’s and don’ts of managing a remote global workforce.
A head’s up: This post shouldn’t be considered as official legal advice. It’s more like guidance. As always, it’s best if you speak with a professional.
DON’T: Underestimate the complexity of managing a global workforce
It’s not as simple as providing someone with an employment contract—even if it says that English employment laws apply. A person may be entitled to local employment rights in the place where they actually work; it’s not just the location of the company employing them that is relevant.
- Payroll requirements
- Tax rules
- Social security
- Parental rights
- Health and Safety
- Rights and restrictions on termination
- Redundancy, and
- Employee representation
…can be different in different countries—and sometimes even within countries (for example, different states in the USA and Australia have different rules).
And now the UK is no longer in the EU, it’s likely there will be even more divergence over time, so employers will need to keep a watching brief on this.
DO: Get good local legal and financial advice
You should talk to advisers early to get tailored advice related to your circumstances. Because getting it wrong is very likely to result in extra cost and possibly fines, not to mention management time sorting it out, a negative impact on employee relations and possibly bad PR.
DO: Set up payroll provision in the appropriate country
If you’re hiring someone who lives in a different country—whether they’re a local or have moved there for a period of time—you’ll likely need to set up payroll in that country.
This can be outsourced whether or not you have or set up a corporate entity in that country. You could also look at using an EOR (employer of record) service or similar. See our other blog on The Hidden Costs of Employees Working Overseas here.
DON’T: Fall foul of tax laws
Individuals could find themselves having to pay tax in both the UK and locally, and this may also be the case for employers, again depending upon local laws and whether a relevant tax treaty applies.
There are also implications for corporate tax and company accounting depending on where profits are deemed to be generated and the activities of the individual. So it is vital to get good tax advice early—ideally before a decision is made or communicated to the employee!
DO: Make sure staff have the right visas or other approvals they will need
If someone is relocating to another country but wishes to carry on working for you, is it their responsibility to make sure they have the correct documentation and permissions to work? Will you help by providing and/or paying for advice and assistance?
Remind them to make sure they have done what is necessary before they move. Perhaps consider making any employment offer conditional on them continuing to observe local immigration requirements and laws.
DO: Remember about data protection and privacy
Particularly if your employees are going to be based outside of the EU, make sure you consider the data protection implications of their work.
Most staff handle some type of personal data. So, how will you ensure they are doing it in accordance with GDPR and any local laws regarding data protection and/or privacy/confidentiality? Not to mention in accordance with your own policies and the data security that your clients/customers expect of you?
DON’T: Forget to protect your intellectual property (IP)
It’s usual for employment contracts in the UK to provide that an employer owns the IP of anything an employee creates within their role (and to a certain extent, this reflects the legal position anyway).
However, this may not automatically be the case for freelancers/contractors in the UK, and the rules abroad may be different, so check and make sure you have the right protections for staff involved in creating and/or building any valuable IP (brand, designs, tech, etc).
DON’T: Discriminate against employees based outside the UK
It may sound obvious but make sure you take account of time differences and local holidays and customs when arranging meetings or setting deadlines. Many countries (in particular, in the EU) have similar equality rules to the UK, so a good rule of thumb is to follow these across the board— while being aware there may be additional requirements in some regions.
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Keen to become a global workforce, but feel intimidated by the logistical and legal hurdles?
With 2020 came the “new way of working”, and it completely transformed the war for talent.
Once the “workplace” lost its gravitational pull, it was proven that most knowledge workers could truly work from anywhere. This led to many businesses transitioning to a “global workforce” to attract top talent.
But like everything in business, there are a few logistical and legal hurdles to consider.
Earlier this year, we co-hosted a webinar with Globalization Partners to give you insider tips on how to hire globally and compliantly, as well as a Q&A session so attendees could ask our speakers their most pressing questions.
Our expert panel discussed a whole array of key topics, such as:
- How to understand the market you’re going into and best practices for getting set up,
- EORs vs Setting up an Entity—and how to establish which works best for your business,
- Main considerations for hiring compliantly, including Health and Safety Laws,
- Actionable tips on treating your People equally—no matter where they are.
Missed the webinar? Don’t fret. The whole discussion is available on-demand—so you’re never missing out. All you need to do is register at the link below, and the recording will be at your fingertips!