Special thanks to guest contributor Narendra Acharya.
As we pass the 2.5 year mark since many of us were sent to work from home for “two or three weeks” in early 2020, a number of employers are getting closer to having formal policies to address remote work and hybrid work arrangements. One of the more enduring consequences of the pandemic for employers is the focus on providing flexibility in employee work locations. This was confirmed in a recent client survey indicating that the majority of employers offer flexible or fully remote work arrangements to their employees and new candidates (though often limited to certain positions and locations), as job seekers are demanding flexible work arrangements.
Only a small minority of companies are requiring all employees to return to the office on a full-time basis (though almost one fifth of responding employers are still developing their remote work policies, so this number could increase). For most employers, it is critical to not be out of step with their peers in the most difficult employee recruiting and retention environment in a generation. At the same time, employers are aware of the risks that can be created by having an employee working in another jurisdiction. These risks are not limited to corporate tax and payroll withholding considerations, but also implicate immigration compliance, IP confidentiality, various employment issues, data privacy and security, trade compliance, and compensation and benefit consequences.
As a result, we are seeing a general acceptance of remote work for some period, but with limits — either on the jurisdictions where employees can work remotely, which positions are eligible under the policy, or the time period the employee is permitted to work remotely. At this stage, respondents are relying less on location tracking software and more on employee self-reporting.
Looking ahead, for US employers, who have been primarily focused on employees moving locations within the US, we may see cross-border remote work increase as countries continue to eliminate the pandemic travel restrictions which were a barrier during the last few years, and as countries use “digital nomad” type visa programs to attract the remote workforce to their jurisdiction.