Whilst ‘Work From Home’ has presented to workers and employers alike both benefits and challenges, many of which have been featured in articles on the subject here in the 3L&3S, this piece extends the concept to ‘work from anywhere’. If containerisation of global shipping drove globalisation in manufacturing and the advent of the internet drove globalisation in IT and BPO services, the acceptance of remote working as a permanent solution may open up opportunities for employees and companies to tap into jobs and talent respectively without being bound by locational constraints. However, cross border work has its own challenges, largely around the different taxation and regulations that the employer and employee are subjected to. The article highlights the emergence of firms which specialise in solving this problem for companies and shows why being able to tap into talent across the globe can itself drive competitive advantage for businesses.
“…with immigration restrictions tightening across the developed world, including in the US during the Trump administration and the UK following its exit from the EU, companies’ talent shortages are only getting worse.
Data analysis from the Cato Institute, a libertarian think-tank, shows that the rate of immigration to the US has fallen sharply since 2017, with pandemic-stricken 2020 the fifth lowest year on record for new arrivals since 1820.
In 2019, an annual report from recruitment agency Manpower Group found that 54 per cent of global employers struggled to fill job openings. Given the trend towards remote work, “filling these roles from abroad seems a viable alternative,” says Prof Guillen, who calls this the first global market for talent.
…“Telecommuting from abroad seems so easy, but you might be inadvertently positioning your company to commit a serious crime,” says Don Dowling, an attorney at Littler Mendelson, an employment law firm. Overseas employees could create new tax obligations — after all, those individuals benefit from water use, waste disposal and myriad other public services.
According to EY, the professional services company, corporate tax and payroll risk— such as increased taxes on salary — were the two most frequently cited concerns among companies looking to hire abroad, at 39 per cent and 24 per cent, respectively.
The 183-day rule is a commonly used threshold for determining whether someone ought to be considered a resident for tax purposes. Provided the employer is based overseas and the costs are not borne by a permanent establishment in the host country, workers can typically avoid creating taxable status for themselves within those six months.
….Remote, an HR solutions start-up for distributed teams is looking to make life easier in this expanding market. The company was founded in 2019 by Job van der Voort and Marcelo Lebre as an employer of record (EOR) for companies wanting to hire overseas workers. EORs, or professional employer organisations (PEOs), build out networks across the world that absorb responsibility for international employees’ payroll, benefits and other compliance matters. In effect, Remote becomes the de facto employer in that second country.”
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