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Whether you are employing in one country or abroad, remote employment poses several legal challenges. But with 78% of global employers and 98% of UK employees saying they want to continue remote work post-pandemic, remote employment is definitely the future.
Ticking all legal compliance checkboxes is the key to sustainable remote employment. You will need to consider things like what taxes you and your employees need to pay, how to pay salaries correctly, and even how to provide healthy and compliant remote workplaces.
We’ve gone ahead and listed the top 5 steps to ensure your remote employment strategy is compliant and foolproof. No matter how big your business or goals, staying on the right side of the law is essential for seamless remote employment.
A permanent establishment is triggered when an employee or contractor completes revenue generating activities for a company. The company is then considered to have a permanent establishment in a given jurisdiction, and is liable to pay corporate taxes to the authorities.
When employing remotely, consider what tasks your employees are doing and whether they could trigger a permanent establishment for you. Being aware and informing the authorities on time will signal your company’s legal compliance. You can avoid potential fines, legal battles, and blacklisting.
One of the greatest obstacles of remote employment is payroll. If your remote team is spread around the world, you have to make sure you are paying their salaries, social security contributions, and taxes through the correct systems. In the UK, for example, employers need to use the national payroll system, PAYE.
You also need to make sure you are paying the correct salaries. Your company may have its own salary benchmarking formula, but you still need to provide appropriate remuneration according to local employment law. Start by building a database on a remote work management tool, like Notion. Ensure to keep a record of all the countries where you are employing, and the required salaries for particular positions, qualifications and experience levels.
The list of different kinds of paid leave is pretty extraordinary. Some countries, like China, offer paid leave for weddings. Wherever your remote employees are based, make sure you are providing the right kind of paid leave according to local employment law.
This also includes time off on local public holidays. Keep a record of this in your online database for different countries where you are employing. This will help you maintain legal compliance while employing remotely.
Once again, local labour codes define the benefits to which an employee is legally entitled. The most important are healthcare, pension plans, unemployment and disability insurance. Providing the right kind of benefits is essential to maintaining legal compliance and employee wellbeing.
Check what benefits are mandatory and how these need to be provided in each country. While for many this is included in state healthcare schemes, other countries might rely on private providers to support employee health. Keep this information up to date in your employee database.
Just because your employees aren’t all working in an office doesn’t mean you are not responsible for their workplace. In fact, many countries, like Russia, the UK, or Austria, have provided legal guidelines for remote workplaces.
Remote work allowances are one way of ensuring remote employees have the right equipment, but these can get expensive and don’t necessarily cover all the legal compliance requirements. To keep your employees healthy and engaged, assess their health needs and help them set up a sustainable remote workplace individually.
At the end of the day, compliant remote employment and workplaces are your most valuable tools. They aren’t just legally necessary, but they will actually keep your employees happy and engaged in the long-run. If all this sounds like a lot of work, we’re here to tell you that it doesn’t have to be.
Alongside Hofy, Omnipresent helps to create the best remote employment experience for you and your employees.
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