When analyzing the legal implications of international teleworking, it is essential to understand that it is a completely different situation from the international posting of workers. If posting is covered by an international social security agreement, it will allow a link to the labor legislation in the origin to be maintained; but in the case of teleworking from another country, this is a new employment relationship, completely subject to the labor and social security legislation of the country from where the worker is teleworking.
And that employment relationship carries with it employer's obligations, including contributions, essential conditions for the employment contract, withholdings, and immigration.
Your organization needs to know both the scope of these obligations and the legal tools offered by the legislation of that other country to be able to deal with this changing legal scenario, either through registration of the company as a non-resident entity, or by use of an Employer of Record, which allows them to comply with all the obligations they have as an employer without the need to establish themselves in another country or take on corporate tax risks.
In this regard, some countries recognize the legal function of an Employer of Record, whereas others, such as Spain, do not, and the registration of the entity as a non-resident will be required..
How we can help you with International work from home compliances?
GD Global Mobility are international mobility experts and we understand the importance of adequate legal planning for international teleworkers, which guarantees correct compliance with legal and tax obligations, and at the same time takes advantage of the different fiscal optimization tools offered by legislation in each country in order to reduce costs.
In addition, we can analyze and plan the impact of assigning workers to Social Security, both with respect to immediate benefits and to health coverage, economic benefits coming from illness or work-related accidents, and future retirement benefits.
Contact us for more information about our service with regards to obligations concerning workers undertaking international teleworking.
