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Remote Work from Abroad – Do You Know What Risks the Employer May Face?

Remote Work from Abroad – Do You Know What Risks the Employer May Face?

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Do your employees ask for the possibility of working regularly from home? What happens if home is abroad? Remote work from abroad brings risks for any company, and each company should evaluate these risks and consider them when setting up a remote work policy for its employees.

Due to the COVID-19 pandemic, many employees had to work from home. In our globalised world, a lot of them had their homes abroad, i.e. in a different country than the country where they had been originally working. Now, it is clear that remote work, including remote work from abroad, is and will be in demand from many employees. Thus, employers must start considering how to satisfy these requests without exposing their companies to any risks.

Remote work is a term, which covers various forms of work from a different place than the office, chosen by the employee. Typical kinds of remote work are: (i) Work from home, local or abroad; (ii) Telework – work from anywhere; (iii) Workation – work from a holiday destination; or (iv) Virtual assignments – where an employee of one group company works in the team of another group company, which is itself a separate entity and located in another country. Each of these situations can trigger specific risks for the employer and could result in significant additional costs.

The risks are related to the following:

  • Labour law, health and safety rules, and financial reimbursement for work from home
  • Personal Income Tax and the related obligations on both the employer and the employee
  • Social security and health insurance
  • Immigration
  • Corporate Income Tax – permanent establishment
  • VAT
  • Transfer Pricing
  • Regulatory issues

When setting up remote work rules and policies, employers should always analyse the risks and factors that affect them. This includes analysing the actual situation in the company. The employers should consider whether they already have a system in place for managing remote work, and whether it covers all of the above factors and potential risks. To be able to evaluate these risks, they can further consider inter alia: What is the most frequent type of remote work used or required? What country is the most frequent in the case of remote work from abroad? How many employees are actually involved?

The employer should also consider practical issues such as the availability and working hours of the employee (different time zones), and the channels of communication.

For further information on remote work and how to set it up in your company, feel free to contact us.

By Iva Bilinska, Senior Managing Associate, Deloitte Legal 

Czech Republic Knowledge Partner

PRK Partners, one of the leading Central European law firms, has been helping clients achieve their business objectives almost 30 years. Our team of lawyers, based in our Prague, Ostrava, and Bratislava offices, has a unique knowledge of Czech and Slovak law and of the business environment. Our lawyers studied at top law schools in the United States, United Kingdom, Switzerland and elsewhere. They also have experience working for leading international and domestic law firms in a number of jurisdictions. We speak your language, too. Our legal team is fluent in more than 15 languages, including all the key languages of the region.

PRK Partners has one of the most experienced legal teams on the market. We are consistently rated as one of the leading law firms in the region. We have received many significant honours and awards for our work. We represent the interests of international clients operating in the Czech Republic in an efficient way, combining local knowledge with an understanding of their global requirements in a business-friendly approach. We are one of the largest law firms in the Czech Republic and Slovakia. Our specialised teams of lawyers and tax advisors advise major global corporations as well as local companies. We provide comprehensive legal advice drawing on our profound knowledge of local law and markets.

Our legal advice delivers tangible results – as proven by our strong track record. We are the only Czech member firm of Lex Mundi, the world's leading network of independent law firms. As one of the leading law firms in the region, we have received many national and international awards, in some cases several years in a row. Honours include the Chambers Europe Award for Excellence, The Lawyer and Czech and Slovak Law Firm of the Year. Thanks to our close cooperation with leading international law firms and strong local players, we can serve clients in multiple jurisdictions around the globe. Our strong network means that we can meet your needs, wherever you do business.

PRK Partners has been repeatedly voted among the most socially responsible firms in the category of small and mid-sized firms and was awarded the bronze certificate at the annual TOP Responsible Firm of the Year Awards.

Our work is not only “business”: we have participated on a longstanding basis in a wide variety of pro bono projects and supported our partners from the non-profit sector (Kaplicky Centre Endowment Fund, Tereza Maxová Foundation, Czech Donors Forum, etc.).

Firm's website: www.prkpartners.com

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