We can all increasingly see the likelihood of virtual assignments being a firm fixture for most companies but what does this actually mean in terms of risk and compliance for companies. There are key questions such as will the need for talent decline or will it become easier as companies have more choice, exploring locations they may not have considered previously.
Whilst there are many benefits in virtual assignments, this will depend on the industry. As an example industries such as manufacturing will require the physical presence of employees on site whereas technology companies will be able to work from anywhere.
The challenges of these new types of assignments bring with them a whole host of challenges which even governments have not previously considered such as the implications from a risk and compliance perspective. Employers will need to consider what it means to their business when they are offering remote assignments and which country is the host or home location. What are the tax and immigration implications of these assignments and are the actually reducing expenditure or adding to the cost burden within the organisation.
As an example in the US, particularly in the state of New York, the government currently has the power to subject an employee to income tax even if they are working from home or another state. Does this mean there could be double taxation? In some countries where a company does not have a presence but they have remote employees then are they creating a tax liability for their own entity and what impact could that have in terms of regulations in that country. Another example is where an employee may be working in a country for another employer and you offer them a remote role, will they have the right to continue working in that country if they leave their existing employer and who has overall responsibility and sponsorship of that employee? As time goes on Mobility managers and HR will be required to understand and support these impacts to ensure organisations are fully equipped to manage the new challenges.
At IPM we are supporting companies to review their remote working policies and outline the activities that are permitted remotely together with the locations that are acceptable as well as the “do’s and don’t’s” of the assignment. Planning in advance for such scenarios will provide companies with transparency and manage expectations early on creating meaningful discussions with key stakeholders.
If you would like any assistance with global mobility policy writing or understanding the nature of remote or virtual assignments globally, please contact our expert team to discuss your specific requirements.