By Globalization Partners
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Remote work compliance is more important than ever. Since the start of the pandemic, many companies have adopted a permanent remote-first work policy that is likely to become the norm soon. In fact, by 2025, 75 percent of the workforce will work remotely at least five days a month.
While there are few laws that apply to temporary work-from-home arrangements, many countries have started introducing legislation around remote work.
Here are some of the legal issues companies should take into consideration as they work to implement a compliant remote-first work policy.
Issue #1: Data compliance (privacy and security)
Data compliance should be at the top of a company’s priorities. When dealing with sensitive data — including client information — it is crucial to ensure the privacy and security of the information employees have access to and use. Another issue is when data is transferred internationally. Is your company complying with GDPR regulations?
What you can do:
- Define privacy and security policies that cover software, hardware, information, and access control.
- Have employees use a Virtual Private Network (VPN) service that keeps web browsing secure, especially for remote workers who use public Wi-Fi.
- Encrypt confidential information.
- Set up a two-factor authentication for every device.
Issue #2: Payroll compliance
Payroll compliance is a common challenge companies face when they have remote employees. Companies must understand the employment and labor laws in every country they hire in to ensure they are paying employees in accordance with those laws.
What you can do:
Check every state or country’s requirements regarding:
- Minimum wage. Minimum wage is the lowest salary or payment that employers can legally compensate their workers. It varies from country to country — and state by state in the U.S. — and, while most countries have one, some countries have forgone implementing an official minimum wage. Therefore, it is crucial to keep track of wage requirements in the country you are operating in. Companies that fail to comply with these requirements, can be liable for fines and lawsuits.
- Overtime and work hours laws. Even though there is a standard for working hours around the world, there are variations in different countries. Local labor laws establish the maximum and minimum working hours and overtime for employees, and companies must comply.
- Leaves. Local labor laws establish their own paid leaves scheme. Vacation leaves are different in the Americas than they are in Europe or Africa, and so are maternity and paternity leaves. Staying on top of these regulations will prevent companies from facing liabilities.
- Pay frequency. Pay frequency defines how often employees should be paid (i.e., weekly, bi-weekly, semi-monthly, monthly) and differs in every country. It is crucial to keep this in mind to comply with every country’s regulations and avoid compliance issues.
- Benefits. Employees are entitled to certain mandatory benefits mandated by their country’s labor laws. While there are basic benefits such as social security in every country, many others have established that employers should also offer unemployment and retirement benefits.
- Insurance. Many countries mandate healthcare, retirement, and unemployment insurance. This is something companies must keep in mind when hiring employees in those countries.
- Taxation. Some countries have more complex taxation systems than others. Understanding these systems is key to complying with tax laws and regulations.
Find experts to help your company stay informed about local laws and regulations.
Issue #3: Health and safety
Protecting employees’ health and safety has become more difficult for companies since going remote. However, even if employees are not physically working in an office, the company is still responsible for keeping them healthy and safe.
What you can do:
- Identify potential hazards and implement measures to control and mitigate risk.
- Set up a system for reporting injuries or incidents, and ensure workers know how to use it.
- Provide health and safety training and encourage employees to take the necessary precautions.
- Mental health is also important to pay attention to. Employers should ensure employees are taking breaks and rest periods.
Issue #4: Equipment
It is important to set up employees with the necessary tools and equipment to perform their work. In some countries, employers are required to provide employees with reimbursement or a stipend for costs incurred while teleworking.
What you can do:
- Provide the resources employees need to work from home.
- When the company is not able to provide the equipment, it is necessary to establish an agreement with the employee and reimburse any expenses incurred.
- Comply with local remote laws requiring extra compensation for electricity, phone, and internet services.
Issue #5: Intellectual property
In addition to protecting sensitive data, companies should also prioritize the protection of the work their employees produce, including authorship, inventions, and designs. International intellectual property (IP) protection is a key factor to consider when hiring remote workers.
What you can do:
- Register IP in the countries your employees are located.
- Add a non-disclosure clause as a part of the employment contract and ensure the terms are clarified and understood.
To avoid these issues, companies should establish and implement an official remote work policy.
Remote work policy
It is extremely important to define a set of rules and guidelines to regulate and manage remote workers.
A remote work policy should include:
- Company rules
Working from home does not exempt employees from the conditions and policies that apply to them in the workplace. To prevent confusion, it’s best to clearly state this within the company’s remote guidelines.
- Work expectations and employee performance
Define guidelines around schedules, deadlines, reports, and tasks. It’s also important to explain how you are going to measure performance and productivity, as well as the metrics that are important for each role.
- Data privacy and intellectual property clauses
Ensure employees sign a confidentiality agreement and understand the importance of protecting the company’s information.
- Compensation and benefits
Clarify that employees are entitled to the same compensation and benefits as in the workplace. Also, note if there will be additional remuneration for electricity or internet costs.
- Communication guidelines
Ensure employees are familiar with the communication tools your team uses. Define any expectations for online availability during work hours and emphasize the importance of check-ins and meetings to maintain smooth communication with your team.
Building your remote team internationally?
If you need assistance with remote work compliance, Globalization Partners can help. As an Employer of Record, we take on the legal responsibility for your global team members and allow your company to hire in 187 countries – no entity needed.
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