Employees no longer want to work only from home, they increasingly like the flexibility of location and time, i.e., the possibility to work anytime and from anywhere, in a growing number of cases also from abroad. Despite the considerable administrative burden when allowing people to work from abroad, 44% of employers in the IT and business services sector already offer this option.
Employees in the IT and business services sector, with a large number of expatriate workers, are interested in working from abroad.
43% of employees in this industry are foreigners who like to extend their families’ visit in their home country and work from there. A common option is also to combine vacation with work. Employees want to extend their vacation and partially work from where they previously spent their days off,
says Jonathan Appleton, the managing director of ABSL. The benefit of being able to work from abroad has a positive impact on employee satisfaction and loyalty just like other forms of work flexibility. The ABSL survey shows that 33% of centres allow their employees to work from abroad for 1-30 days, 8% for 1-3 months and 3% for even longer than 3 months.
In addition to IT and business services centres, e-commerce companies and young start-ups have recently started offering the opportunity to work from abroad. It is a benefit welcomed by employees and can therefore be an interesting tool to attract new job applicants,
says Martin Malo, director of Grafton Recruitment (Gi Group Holding), adding that according to a current Benefit survey, almost 90% of employees in the IT and business services sector are interested in this benefit, but only about a quarter of them can work from abroad. And this is because employers allowing employees to work from abroad face a number of administrative obligations, even when it comes to EU countries. Many employers believe that the rules will soon be simplified in this area. The ABSL survey shows that in such a case, the benefit of part-time work from abroad would be provided by 80% of centres.
Obligations apply to both employers and employees when working remotely from abroad.
A company should not underestimate the potential risk of establishing a permanent establishment, the potential obligation to register employment tax payments and the related obligation to keep payroll records abroad in accordance with local tax regulations. It is therefore important to monitor the relevant double taxation treaties as well as local tax legislation,
explains Jitka Bašová from Deloitte. In addition to tax regulations, she claims monitoring the requirements arising from employment law and social and health insurance issues is also important. An obligation to pay social and health insurance premiums in the country from which the employee works may arise in connection with working from abroad. Moreover, an employee’s tax residency may be affected by working abroad.
An employee may become a tax resident in a country where his legal employer is not based, which significantly impacts his final tax burden. Tax residency is affected by a number of factors, one of which is the total time spent abroad,
explains Jitka Bašová. For this reason, companies allow work from abroad for periods shorter than 183 days, most often thirty to ninety days per year.
One of the companies that offers this benefit to its employees is SAP:
SAP in the Czech Republic, as part of its global flexible working model, allows employees to work from abroad on a short-term basis. Of course, the company meets immigration and other legal requirements. This benefit is especially used by foreign employees that, for example, have the opportunity to spend more time with loved ones in their home country,
says Iveta Chválová, Director of SAP Services.
A company Acamar has also made it possible for its people to work from abroad:
We allow our employees to work remotely, either from different locations in the Czech Republic or from abroad. We respect the individual needs and interests of our employees and their families, which are increasingly less respectful of national borders. Working from abroad is now limited more by tax legislation than by the technical or organisational environment,
says František Mareth, the company’s CEO.
This benefit is and will become increasingly popular, especially for younger workers from Generation Z. For them, flexibility and mobility are a lifestyle. Therefore, the offer of benefits in this area will be decisive in their decision-making about job offers. Andrea Tkačuková, director of Foreigners.cz, confirms:
The possibility of working at least partly from abroad is a huge benefit for foreigners, especially thanks to the opportunity to be closer to family and friends in their country of origin. In my opinion, the possibility to work from abroad gives companies a great competitive advantage when recruiting foreigners.