Taking remote working too far
Achieving a balance between the rights and responsibilities of employers and employees is proving to be a major headache – CRS Technologies represents a solution.
So, just when you thought it was safe to open your office and return to some degree of normality! COVID-19 has changed everything, including how, when, why and – specifically – where employees are managed.
It’s no secret that remote working and the hybrid working model is a reality that’s likely to remain so for the foreseeable future. But an emerging and worrying trend is employees relocating and actually doing their jobs abroad.
Why is this a problem, I hear you ask?
Well, the short answer is there are issues and risks that not everyone may be aware of. It’s not as simple as ‘employee A now working remotely from country B’ and then setting up the necessary connectivity, secure access, KPIs, etc.
There can be serious and far-reaching consequences for all involved.
An article published on Businesstech.co.za explains the situation well. What employees or employees may not realise is that there is a risk in a permanent link being established between the company and a foreign market. This has regulatory and tax implications, specifically tax applied to salaries or personal income tax. Foreign and domestic markets differ in terms of payroll and immigration criteria, all of which has to be factored into the equation.
Cxglobal.com sheds more light on the issue of permanent establishment (PE) and the corporate income tax that follows. An employee who works at a location for a prolonged period of time could create a PE for the company and this status is handled differently from country to country.
Yes, tax authorities and labour legislation are changing. The fact is that labour law must consider the current realities facing both employers and employees, but compliance is still mandatory and there are a lot of implications to a physical relocation and remote work.
The best advice we can offer is to seek out and partner with human capital management experts like CRS Technologies, which has a legal unit to guide clients to the best possible solution.
Companies that are progressive and knowledgeable about remote working implications like visas, taxes, worker classification, outsourcing, contracts and other human resource realities, will alleviate much of the stress of having to regroup, review and reorganise their employees.
As always, CRS Technologies is available to provide insight, advice and guidance to help businesses manoeuvre through the minefield.