The past year has witnessed a huge remote working experiment for many of the world’s businesses and their employees as a result of Covid-19. And, for many, these new working practices have become hugely complex depending on where in the world business owners and employees have suddenly found themselves. Almost overnight, people are in uncertain territory regarding issues involving employment law, tax, social security and pensions, to name just a few.
FOREWORD BY EDITOR, ANDREW CHILVERS
What are the consequences for a business when an employee works from home on a semi-permanent basis, transferring their residence to another country?
I note that many of my colleagues have said that the position in their respective jurisdiction is “very complicated” and that there are “lots of complexities”, citing such things as social security, employment taxes, income withholding tax and exchange controls. The position in the Turks and Caicos Islands (‘TCI’) is far simpler. To all intents and purposes there are no direct taxes – I never get tired of saying or hearing that! Specifically in the employment field, there is no income tax or payroll tax. The only statutory deductions made from an employee’s pay-packet are National Insurance and National Health Insurance contributions. In very general terms, insurable employment means employment in the TCI of a person under a contract of service or apprenticeship or under such circumstances from which the existence of a relation of employer and employee may be inferred, including employment by or under the Government of the TCI; though there are exceptions including employment of a person who is not ordinarily resident in the TCI, if the employer of that person is not ordinarily resident in the Islands and has no place of business there. A “temporarily resident employed person” means an employed person— (a) who is not an Islander as defined in the Turks and Caicos Islander Status Ordinance or a permanent resident as defined in the Immigration Ordinance; (b) who is employed in the TCI for a period not exceeding 180 days in any period of 12 months; and (c) who, when not so employed, resides outside the Islands. Other than that – and here’s a sentence I never thought I’d hear myself say – the TCI is similar to Venezuela, in this sense: our employment protection legislation (the Employment Ordinance) specifically does not apply to employment during any period when the employee is engaged in work wholly or mainly outside the TCI unless the employee ordinarily works in the TCI and the work outside the TCI is for the same employer. Looking at the question from both sides (and I agree with Menna that it is misleading to equate (i) working from home on a semi-permanent basis in a country with (ii) transferring residence to that country): firstly in the case of an employee employed to work in another country but who it working from home in TCI, the consequences for the relevant business are going to be determined by the laws of its jurisdiction, save that the relevant employee will be required to have Immigration status in TCI allowing them to remain here. Secondly, in the case of an employee employed by a TCI company, but who is remote working in a foreign jurisdiction (I am aware of a few employees in that position), there is unlikely to be any consequence to the business under TCI law (save that it may no longer be bound by the Employment Ordinance), but there will likely be tax consequences for the employee in the relevant jurisdiction in which they are carrying out their remote work and there is the possibility of consequences (including tax consequences) for the employer under that foreign law, particularly if there is a requirement (such as there is in India) for the company to maintain a presence in that foreign country in order to have an employee there.
Are there specific rules applicable to remote working in your country? How do they apply to domestic and foreign companies?
Save that when the COVID-19 pandemic first hit the TCI in late March 2020 and His Excellency, The Governor issued a proclamation of emergency allowing him to make emergency regulations, and those regulations included a ‘shelter in place’ provision as well as a curfew, meaning that businesses other than hotels and essential businesses could not open and employees who could work from home were required to work remotely from home (which provisions gradually fell away from early May 2020), there are no specific rules applicable to remote working in the TCI. The position is therefore similar to that identified in the UK, India, the USA and Venezuela, save that we don’t have any real health and safety legislation, merely the common law duties of an employer to provide a safe system of work.
Will companies have to provide new policies for remote working? Will this include providing employees with the necessary equipment and reimbursing costs related to remote work?
I very much embrace what Rebecca has said regarding the lack of expectation of any new systems of laws in TCI to deal with remote working. TCI’s economy is highly reliant on tourism and, as such, it is not a country with a culture of remote working. Indeed, for the vast majority of the workforce, their jobs can’t be performed from home. Further, for a country with a population of around 40,000 people, the vast majority of whom are situated on an island that is 17 miles long from tip to tip and only 35 square miles in area, commuting to work is not really an issue and so, unlike the situation in France, people are not looking to move out of the ‘city’ to work from home. Although as a law firm (in common with many other professional businesses) we ensured that those of our workers whose jobs could be carried out from home were provided with laptops, printers and other essential office equipment if required, we are finding that most people are desperate to return to the office and in TCI (as opposed to our offices in the Bahamas), we’ve been fully back to the office since 8 May 2020. This is true for the vast majority of private business, though some government departments are still requiring persons to work from home or are on split-shift systems. Overall, the only new policies I anticipate coming into play in the private sector are likely to be linked to businesses’ reluctance to send employees to overseas meetings or conferences and require them instead to attend by video platforms. That all said, forward thinking employers should already be embracing policies for working from home and particularly flexible working arrangements for those who may wish to work part of their time from home, as a way of aiding recruitment and retaining employees.
I would also urge legislators when considering revisions to employment law and health and safety at work legislation to take into account working from home and to recognise the value of the same as part and parcel of a ‘new normal’ working environment, where applicable.