Working Remotely Abroad for a US Company: Employer Requirements

Posted on 16 February 2023 by IRIS FMP

Companies in the US, and indeed around the world, are experiencing more requests for remote working opportunities. Existing employees are looking for greater convenience, such as being closer to family or desiring a fairer work/life balance, especially when migrating overseas. In part thanks to the flexibility remote working offers, employers can expand their horizons when it comes to new talent simply by offering remote opportunities for those living abroad.

It’s no surprise that COVID-19 impacted the world’s need for remote working. As soon as businesses established safe, remote opportunities for their employees this opened doors to receive new talent and offer greater flexibility for existing workers.

By adjusting processes and following local regulations, you can adapt your company to support those looking for more remote opportunities. Likewise, it can also open doors for employers by significantly expanding the talent pool.

What Must Employers Consider When Offering Remote Work Opportunities in a Different Country?

Many companies face the same conundrum; they have no entities or bodies existing within that country, so it’s completely new territory for HR, payroll and IT departments, as well as day to day operations. While preparation is needed to facilitate employees looking for remote work abroad, it can majorly benefit your company.

1. Country or Land Territory-specific Regulations

From taxes to minimum wage, there is most likely pre-existing legislation around workers’ rights. For remote workers taking residency within the UK, minimum wage and maximum weekly working hour regulations will need to be observed. Unlike the US, UK-based workers are not permitted to work more than an average of 48 hours, you’ll also find this is the case across most of Europe too. For countries, such as Hungary, you’ll also need to ensure that workers receive 20 days of paid holiday leave and up to 15 days of paid sick leave.

2. Changes to Pay

Dependent on legal tender within the country, any wages will need to be converted to the correct currency for the employee. This will support with ensuring correct national and region-specific taxes are paid. Additionally, after the salary has been exchanged into the new legal tender, it could also mean further changes to an employee’s wage, such as a salary increase. For example, in Switzerland 26 of the country’s cantons have their own pre-determined minimum wage system, which companies have a legal obligation to follow.

3. Pension Changes

Within the US, it is not a legal requirement for a corporation or employer to contribute to personal pensions. Additionally, there is no legal obligation to offer a pension to employees. Many US-based employers can offer 401(k) plans for retirement, but it’s not mandatory.

For remote workers in the UK, it is the law that an employer must offer and pay into a pension scheme, with employees expected to sacrifice a small percentage of their salary in contribution as well. If an employee chooses to opt-out or earns less than £520pcm, £120pcw or £480 over 4 weeks, an employer does not need to contribute to a pension.

4. Paid Leave Rights

From accrued holiday to parental leave, these are potential changes that could affect an employee’s contract. Employees residing in France who work a full-time 35-hour week are entitled to a total of five weeks of paid leave per annum. Employers will need to consider this within their contract and ensure there is no deviation. Most of Europe also has paid parental leave in place, which ensures the security for employees to take paid maternity and paternity leave.

5. Public Holidays

Agreeing on public holidays taken is a conversation between employer and employee. For example, employees can request to follow the public holiday structure of the country they reside in or have moved to. Alternatively, employers can suggest that public holiday mimics the same as the rest of the company in the US. There are pros and cons for both sides, so it’s one to be resolved between both parties.

6. Legislation Over Dismissal and Redundancy

Company policy will need to take into consideration differences between dismissal and redundancy issues, especially for remote workers overseas. Within certain countries, employers have a duty of care to provide forewarning to employees who could be made redundant, followed by a period of redundancy and termination of employment.

Likewise, a case for dismissal must be presented and confirmed as fair, otherwise, an employee has a right to a tribunal. For high-profile cases, like the redundancies made in Twitter’s London office, it’s possible that business reputation can be impacted, especially when majorly highlighted by the media.

Young businesswoman work at home

Supporting Workers Looking for Remote Opportunities Abroad

Some employees have excellent relationships with their employers and want to keep the working bond they have after moving overseas. Although there are new regulations and country-specific legislations to adhere to, which can sound daunting, it could open opportunities for a company.

As part of the process, you’ll need to support your employee with the following applications and information:

1. Visas for Travel or Work

When hiring workers from overseas to join your company in person, you’ll need to support them with a sponsored visa. However, for employees looking to move away from their country of origin or travel while working remotely, the guidelines are a little vaguer. Certain countries, like Antigua and Barbuda, will allow remote employees from overseas to continue working on a tourist visa.

For employees looking to country-hop, and live a digital nomad lifestyle, you may be required to give supporting evidence of their employment and intention for employment. Under most circumstances, this will be led by the employee with little involvement required from their employer.

2. Taxation

Whether your employee intends to settle or travel, taxation rules will need to be revised and adhered to. For digital nomads, taxation should follow the same procedures as their country of origin, which causes little hassle for payroll. However, settled employees will need to be taxed according to country-specific requirements.

When a business conducts operations or sales within a new geographical market, it will need to pay local taxes. Thankfully, this doesn’t affect a business if an employee chooses to move to that country for remote work. Only if an employee’s remit remains the same, targeting the same market space as before, does this exclude a business from paying local taxes.

3. Equipment and Resources

Essential for business continuity, companies will need to consider what tools an employee will need. From second screens to laptops, digital hardware will need to support employees with completing their work overseas. It is up to the employee to source broadband and internet connection that is secure for the work required. However, a remote working allowance can be set up by an employer to support employees with expenses attributed to working from home.

Maintenance and hardware issues will also need to be considered. Does your company have a protocol or process for those with broken equipment? Although this is a rarity, it could cause disruption to regular business proceedings.

4. Agreeable Working Hours

Even working remotely across different states can affect an employee’s working hours due to time zone differences. Whether there is an hour’s difference or eight, appropriate working hours will need to be established for your overseas employee that doesn’t exceed the maximum weekly allowance.

If it suits your business, allowing the remote employee to start their working day at 8 am or 9 am within their time zone affords its own benefits. It can ensure business continuity outside of your US working hours or allow any unfinished projects to be completed before your US operations start a new day.

Hiring Remote Workers for a US Company Who Live Abroad

Limiting talent pools to a local area can mean more time and money spent in the hiring process, especially for HR personnel. Processing the same people and relying on migration can leave roles unfilled for too long. That’s why hiring remote workers or digital nomads could be the way forward.

Although the process is not as clear-cut as hiring a US resident, it can be worth it to reach a new level of talent that was otherwise untouchable. US companies will need to put forward a case for hiring a foreign worker and prove that work is available for them to do. Dependent on the type of work required, certifications and appropriate visas will need to be applied for as well.

Alternatively, hiring remote workers overseas also serves as an excellent time for organizations to set up an entity within that country. While this will require businesses to pay local taxes, it affords greater opportunities for scalability and exploring new geographical markets.

Freelancer working from home and using phone

What are the Benefits of Hiring or Supporting Remote Workers Living Abroad

Hiring Remote Workers Abroad

  • Opens up a greater talent pool for your company
  • Creates opportunities for scalability through new geographical markets, if desired
  • Increases diversity and offers a rich company culture
  • Could also be a cost-saving exercise, dependent on the country
  • Potential to improve customer service, offering extra availability for customers to contact a company

Supporting Remote Workers Abroad

  • Maintain successful working relationships with employees that produce valuable work
  • Reduces office numbers and seats taken; a perk for offices looking to downscale and integrate more remote working
  • Another great opportunity for scalability, especially if an overseas colleague is aiming to be a permanent resident
  • Indicates a collaborative culture for other colleagues and employees
  • Offers a level of trust for remote workers in managing their workload and reporting issues

Hiring or Supporting Remote Workers Abroad for a US Company

Venturing to new geographical locations can be complicated for both employers and employees, but that shouldn’t remove the opportunity from the table. Whether you need to navigate new legislation or understand how a move could affect an employee’s contract, you can rely on experts to find a solution.

At IRIS FMP, we offer international HR services for businesses looking to expand into new markets or supporting employees with an overseas move. Discover how we can support your business today.

Get in touch.