With most social distancing restrictions still in place due to the COVID-19 pandemic, many employees continue to work from home and some businesses are planning to keep it that way for the foreseeable future. This has led an increasing number of employees to consider relocating domestically and even globally. Below are several topics to explore as you begin to develop your company’s guidelines for potential employee relocations abroad.
Creating Your Global Relocation Policy
If you have not already, you may want to adopt an internal remote work policy for consistency. If you do have an existing policy regarding remote working arrangements, you may want to modify it to address out-of-home-country requests.
Some questions you will want to consider when developing a policy that addresses an employee’s request to work remotely in another country include:
- Does your company want to sponsor an employee’s request to work from a country other than their home country assignment?
- Who is eligible for international relocation requests?
- Type of request – personal preference to work from another country vs. a business need?
- Length of request – is this a long or short-term request?
- Will your company limit the length of the relocation or have requirements to return to their home country at some future point which may be defined by a host country’s governing law or restrictions set by insurance contracts?
- Does your company have a legal entity in the country that the employee is requesting a transfer to?
- Have you checked requirements for “Right to Work” status in the host country?
- What are the host country’s rules regarding social security, statutory, mandatory or other requirements, including visas, while on assignment?
- What are the tax and legal implications for the employee and the company for a transfer out of the home country?
- How will benefits and payroll be handled?
- To accommodate these requests, would your company consider a Global PEO for countries where it does not wish to establish a legal entity?
- Will home country-style benefits be extended while the employee is out of the country?
- Will your company pay for moving and/or relocation expenses, or provide an allowance for such?
Providing Employee Benefits Abroad
- For relocation requests to countries with a legal entity – You may want to localize the employees by including them on the local country plans/payroll at the soonest possible opportunity.
- For relocations to countries without a legal entity (and no plans to establish a legal entity) – You may want to consider a global PEO. This option ensures plans are in compliance in a country where you have not established a legal entity. Under this situation, the employee would become an employee of the global PEO. In some cases, the global PEO will offer solutions to help equalize benefits to match your company’s programs.
- For relocations to countries for a specified period of time (less than one, maybe two years depending on terms of insurance plan) – Our recommendation may be to cover these employees with an expat medical plan that closely resembles the home country plan they are transferring from (not the typically rich expat benefit plans for corporate executives). If possible, keep the employee on home country (or regional) payroll, other benefits, and HR policies and directives. This can be challenging for a company to manage administratively and may not be compliant with local laws and regulations. Further to this point, some benefit plans may limit the coverage to a specific number of days for out of country assignments.
- Other important considerations:
- Add Leisure (Personal) Travel coverage to your existing Business Travel Medical or Business Travel Accident plans. This change will cover an employee for up to 180 days when outside of their home country.
- Add Dependents to Business Travel Accident and Business Travel Medical plans. This will extend coverage to any covered dependents that are traveling with the employee while on a business (and leisure travel if covered) trip.
The subject matter that we cover above frames the issues related to employee benefits while working outside of the home country. We do not address the tax or legal implications of such a request. We recommend that you consult with your corporate tax and legal experts.
Disclaimer: This content is intended for informational purposes only and should not be construed as legal, medical or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable. This information and any questions as to your specific circumstances should be reviewed with your respective legal counsel and/or tax advisor as we do not provide legal or tax advice. Please note that this information may be subject to change based on legislative changes. © 2020 Sequoia Benefits & Insurance Services, LLC. All Rights Reserved