A preeminent professor of international employment law, Belgium's Roger Blanpain, recently said that, "We live in an information society, driven by knowledge in action.... [Services] can be provided via the information highways from anywhere, even from the other side of the globe.... We are in a New World. It immediately becomes clear why developments in the globalized, non-material market economies are totally transcending the nation-state and its political authorities." (The World of Work in the 21st Century: Challenges and Opportunities - paper presented at Oxford, October 2008).
To pull Professor Blanpain's observations down to the employer level, this development translates into two vital trends in cross-border human resources: international outsourcing and international telecommuting. The first trend, international outsourcing, is the subject of our July 2007 Global HR Hot Topic. The second trend, international telecommuting, includes any situation where an employee works remotely, such as from home, in a country away from the employer's established operations, plugged into the job by the internet and other technologies.
Even where a telecommuter will not displace currently-employed locals, human resources projects implicating international telecommuting tend to arise in three different contexts, each of which poses its own set of legal issues:
- "Floating employees" in a new overseas jurisdiction: Technology allows multinationals to drop a telecommuting employee into any country in the world. Some multinationals send telecommuters into foreign countries to develop the new market; other times a cross-border telecommuter is an employee who used to work at an established employer facility but who now must live overseas for personal reasons (such as a so-called "trailing spouse" on a partner's expatriate assignment). In these situations, telecommuting can mean posting a so-called "floating" employee into a new jurisdiction. These issues are discussed at our September, October, and November 2008 Global HR Hot Topic.
- Mandatory telecommuting to save costs: Occasionally a frugal multinational will close smaller offices in certain cities and countries to save on rent, requiring its surviving local employees to telecommute from home. In these situations telecommuting can implicate so-called "vested" or "acquired" rights issues, because the employer takes away employees' offices. These issues are discussed at our January 2009 Global HR Hot Topic. In addition, these scenarios can implicate collective bargaining obligations.
- Cross-border telecommuting policies: The cross-border telecommuting scenario that most directly raises telecommuting-specific issues is when a family-friendly multinational issues a regional or global human resources policy internationally aligning the organization's approach to employees' work-from-home requests.
Pointer: Use a checklist to address legal and practical issues in cross-border telecommuting.
Technologies that facilitate what Professor Blanpain calls services "provided via the information highways from anywhere, even the other side of the globe" are powerful tools for retaining talented employees who cannot check into a bricks-and-mortar office daily. As such, letting overseas employees work from home allows an employer to leverage technology for the key competitive advantage of employee retention and satisfaction. But "old-school" legal and practical issues can inject a number of problems here. In any cross-border telecommuting scenario - even in assessing an individual employee's one-off request to telecommute abroad - factor in a list of practical and legal telecommuting issues.
International telecommuting checklist:
- "Floating" employee issues: Where there is no in-country employer infrastructure, how to account for: Independent contractor vs. employee doctrines? Employer entity registration rules? "Permanent establishment"? See our September and October 2007 and September, October and November 2008 Global HR Hot Topic.
- Immigration: Does telecommuter have correct visa/work permit in host country?
- Pay/benefits delivery: How, legally, to deliver pay and benefits to overseas telecommuter? How to comply with payroll, withholding, employer contributions? Local currency rules? Dual-jurisdiction tax exposure? Benefits plan eligibility?
- Dislocation: How to address employee loss of office, disconnection from peers, lack of contact with the organization?
- Link to physical office: Any "hot desking," mandatory reporting to a physical office, or other anchor to physical workplace? If so, how does it work?
- Tools/infrastructure: How to provide infrastructure for employee to work from home? (Company computer? High-speed connection? Dedicated in-home office? Dedicated phone lines? Fax?) How do expense reimbursements work?
- Data protection laws: What systems safeguard home-working employees' compliance with applicable data privacy laws? Will employee handle sensitive personal data or transmit personal data across national borders?
- Computer monitoring: Will employer monitor telecommuting employee's computer, keystrokes, log-ons, e-mails, internet access, etc.? Does monitoring comply with local data law? Has employee received notices and signed necessary consents?
- Data security: What systems safeguard employer's business data (both on-line and hard copy) at employee's home work site?
- Confidentiality: What controls protect confidentiality now and after employee separation?
- Supervision/quality control: How to supervise employee? How to ensure employee works required hours? How to ensure quality control? How to monitor attendance? How to ensure the individual employee is personally doing the work himself (not delegating/subcontracting to others)? Do these procedures comply with applicable law?
- Wage/hour laws: How to monitor work hours and compliance with local wage/hour, overtime pay, caps-on-hours, break and vacation laws?
- Local law and policy compliance: How to ensure employer complies with other local mandatory employment laws, applicable industry ("sectoral") collective bargaining agreements, and employer's own global policies/codes of conduct?
- Employment contract alignment: Amend employee's original employment contract or offer letter to reflect new work-at-home situation. (And new agreement should specify how work-at-home status can end.)
- Home workplace compliance: Does employee's in-home worksite comply with laws regarding physical workplace, such as safety laws?
- Real estate rules: Does employee's in-home worksite comply with local zoning/subdivision/apartment building work-at-home restrictions?
- Return of equipment: How will employer collect equipment, data and documents after employee separation?
This article and the accompanying checklist is reprinted with permission from the international law firm of White and Case.