This article is an extract from GTDT Market Intelligence Remote Working 2022. Click here for the full guide.
1 What are the most consequential issues that an employer should consider when determining its post-covid-19 remote work policies?
In Ireland, the recently enacted Remote Working Bill places an obligation on all employers to ensure that they have a remote working policy in place. Employers should consider the following when drafting and implementing their remote working policies.
Right to request remote work
The draft scheme of the Right to Request Remote Working Bill 2022 has been published and once enacted, it will give employees a legal right to request remote working. Employers will be able to refuse a request for remote working if there are ‘reasonable grounds’ for doing so. These reasonable grounds will be set out in the upcoming legislation. Employees will also have a right to appeal to the Workplace Relations Commission where the employer does not respond to the request, give reasonable grounds for a refusal or penalises the employee for accessing the right to request remote working. As such, remote working policies will need to strike a balance between the organisation’s needs and the employee’s entitlement to work remotely. Policies will look different for different organisations, however it is clear that flexibility will need to be provided to employees in relation to the right to request remote work in order to retain key talent, boost employee morale and ensure productivity amongst employees.
Location
A remote working policy should outline that employees may be permitted to work from a safe, secure workspace in their home. If an employer wishes to permit their employees to work from abroad or from co-working spaces, then details of the proposed remote working arrangement should be included in the employee’s request to allow the employer to adequately assess the risks involved. Permitting employees to work from abroad for extended periods of time may create additional employment law and taxation obligations on employers. For co-working spaces, confidentiality and data protection issues may arise.
Equipment / home office expenses
Employers must also consider what contribution they will make, if any, to the employees’ home working arrangement. If equipment such as laptops, monitors, keyboards or desk chairs are to be provided by employers, this should be outlined in the policy along with any financial contributions that might be made to electricity, heating, internet or telephone costs. If no employer contribution will be made, then the policy should inform employees that it is their obligation to provide their own home office equipment and to apply for any tax reliefs available. To note, employers can provide a tax-free financial contribution to household bills for remote workers of up to €3.20 a day.
Health and safety
From a health and safety perspective, employers who permit remote working requests will still be required to ensure that its employees are working from an appropriate and safe workspace. We recommend that a remote working questionnaire be appended to the policy requesting details of any potential health and safety concerns or ergonomic risks arising with the employee’s proposed workspace. A provision should also be included in the policy permitting employers to carry out ergonomic assessments of workstations either remotely or in person.
Working time
Irish employers are obliged to keep accurate records of their employees’ working hours and rest breaks. Employers will need to consider whether their current method of recording time is suitable for remote working. Additionally, employees should be reminded of the requirement to log or record time remotely and to take rest breaks in accordance with their contractual and legal entitlements.
Data security and confidentiality
A remote working policy should cross-refer to any data protection, IT, social media and confidentiality policies in place. The policy should outline steps for keeping confidential information secure while remote working, such as locking material and equipment away, keeping smart devices turned off and having work-related conversations in a private location. Employees should be reminded that the same level of data security and confidentiality applies as when working in the office.
2 Pragmatically speaking, is there a threshold to determine when working remotely (from home or otherwise) requires local rules to apply?
Foreign nationals working legally in Ireland are entitled to the same range of statutory employment protections as Irish employees, regardless of the duration of their time in Ireland.
The length of time spent working remotely in Ireland may also have an impact from a tax perspective. If you are carrying out your duties in Ireland (remotely) you are taxable on the income arising from those activities unless it is relieved under a Double Tax Agreement.
Your employer must register for PAYE withholding and withhold Irish tax from your salary (except in certain circumstances, for example, where you have a limited number of workdays in Ireland). Some employers will be reluctant to set up PAYE withholding with Irish Revenue, especially if you have made the personal choice to come to Ireland to work and have not been seconded/asked to work from Ireland.
3 If employees voluntarily move away from their main work location, can employers unilaterally impose locally appropriate compensation packages?
If there is no specific clause in the employment contract which permits an employee to work abroad for an extended period of time, it may be necessary to re-engage the employee on a new contract of employment. The employer cannot unilaterally change the employee’s terms and conditions of employment. Further the employee’s contract of employment may stipulate that the employee’s place of work is in a certain country. Some options on how to best deal with this situation are either to (1) incorporate a local entity and hire the employee directly; or (2) pay the employee as a contractor and mutually agree to end their current contract of employment. There will also be tax residency considerations where an employee moves abroad in the situation described above.
4 Do you anticipate a rising trend of employers hiring remote workers as opposed to managing office-based employees who subsequently go remote? What practical issues should employers bear in mind when considering remote hiring?
There is certainly an increase in the number of employers, particularly in large-scale tech companies, hiring workers to carry out their roles remotely. By doing so, employers can extend their workforce beyond the parameters of commutable distance from the office.
Some practical issues employers should bear in mind when considering remote hiring are as follows.
Ensure your business is remote-ready
Before committing to remote hiring, a review of the company’s ability to recruit, support and retain remote workers should be carried out. For example, this could involve updating the recruitment software used by the company and ensuring management receive adequate training in effectively managing and communicating with remote workers.
Remote benefits
Remote workers will not have access to in-office perks such as a canteen, printing room, post room or coffee stations. Therefore, some thought should be given to the type of benefits remote employees may appreciate. Examples may include more annual leave, equipment allowance and location-based compensation.
5 Do local laws provide remote employees with more generous leave entitlements, such as sick leave? Can employees avail themselves of leave entitlements in both the primary work location and the remote work location?
An employee’s statutory leave entitlements does not differ if their role is carried out in-office or remotely. Full-time employees are entitled to four weeks’ annual leave each year in addition to public holidays (of which there are nine in Ireland).
With regard to sick leave, from 1 January 2023 Irish employees will be entitled to receive up to three days paid sick leave per year, increasing to five days in 2024, seven days in 2025 and 10 days in 2026. Statutory sick pay will be paid by employers at a rate of 70 per cent of an employee’s wage, subject to a daily threshold of €110.
6 What are some best practices for protecting confidential and proprietary information in a remote work environment?
As outlined above, some best practices for protecting confidential information while remote working include locking material and equipment away in cabinets or locked rooms, keeping smart devices turned off or outside of home office spaces and having work-related conversations in a private location.
7 How does a remote employee affect the employer’s tax obligations? Do the employee’s activities render the employer to be ‘doing business’ in the remote location? Will these activities create a taxable presence for the foreign employer in the local jurisdiction?
Expert tax advice should be sought in relation to any tax obligations that may arise in relation to a remote employee. Some relevant considerations are as follows.
Permanent establishment
If an Irish entity has employees performing duties of employment outside of Ireland this may give rise to a corporate tax presence in the foreign jurisdiction, consequently classed as a permanent establishment. If a taxable presence is created in another jurisdiction the Irish entity may have to comply with the tax reporting obligations of that jurisdiction.
Foreign payroll reporting obligations
Foreign and local payroll reporting obligations may arise for the Irish employer as the duties of employment are being conducted in the foreign jurisdiction. Employers may need to comply with the payroll tax reporting requirements of the country where the employee is located as well as in Ireland.
Tax resident status of the employee
Where an employee spends time present in another state they may trigger tax residency in that foreign jurisdiction which may result in personal tax filing and reporting considerations. Income which was otherwise outside the scope of that foreign jurisdiction may now be within the remit of taxes (eg, income tax and capital gains tax).
8 What are some best practices for tracking remote work arrangements?
Tracking employees is a sensitive area, albeit it is often necessary, particularly in the case of remote workers. Some best practices include the following.
- Setting clear deadlines and individual goals, putting aside time to review progress with each employee.
- Scheduling regular follow up meetings and discussions; checking in with employees.
- Setting aside specific times for social activities and team catch-ups.
- Implementing time recording tools
The Inside Track
What do you think are the most exciting and promising opportunities of remote working? How do you think it will affect the future of work?
Both employers and employees may avail themselves of numerous social, economic and environmental benefits associated with remote working. These benefits include employee retention, promoting regional development, increased labour market participation, an improvement in work/life balance and family well-being, cost-efficiencies for businesses and reduced commuting, pollution and carbon emissions.
Remote working can assist with ensuring our workplaces are more diverse and inclusive, for example, by enabling greater participation for people with disabilities in the workplace. The flexibility associated with remote working, such as removing a commute, along with the change in mindset brought about by the increase in remote working, may also assist those with caring responsibilities in the home to participate in the workforce.
We have already seen large companies reducing the size of their office spaces, to facilitate a hybrid model in relation to remote working. We may also see more jobs being advertised as being fully remote in the future. Employers may have to become more creative in the types of benefit packages they offer employees to reflect the fact that they work from home.
In your view, what are the most difficult challenges raised by the rise of remote working? How do you think employers should tackle these challenges and adapt accordingly?
One of the most difficult challenges arising from remote working is ensuring that social connections and relationships between colleagues are maintained. Teamwork, collegiality, support networks – these can be easily maintained in an office environment but require greater effort from employees and employers alike where remote working is incorporated into the workplace. Other challenges include keeping lines of communication open, monitoring workloads and ensuring that all employees ‘switch off’ while working remotely
What do you enjoy most about practising and advising in this area?
The dynamic pace of development in employment law reflects the social and economic changes in a post-pandemic world. Employment lawyers need to move rapidly with the times as organisations seek to attract, recruit and retain the key talent that ensures its success. As an employment lawyer you are involved in helping organisations maximise opportunities to attract and engage key people whilst at the same time being mindful of the legal issues that arise, so navigating the digital, remote, flexible and diverse workplace in an open transparent and accessible way. As an employment lawyer you are at the new frontier of change for organisations and getting great interesting insights into so many sectors and industries, how they evolve, progress and succeed.
