Working from home has become the norm for many workers in recent months. But what about if “home” is “away”?
Barbados has been badly affected by the impact of the pandemic. As the economy relies heavily on tourism and travelling for short periods has become more difficult, the government has come up with an interesting initiative to attract people for longer, a 12-month “Welcome Stamp”. This will allow overseas individuals with an annual income of at least USD $50,000 to work remotely from the island without the need for any visas or immigration permissions.
The Welcome Stamp could well be an attractive proposition. If an employee wishes to take advantage of the scheme, what do you need to consider before approving the request?
There is tax – even in paradise. Employees will continue to pay UK income tax in accordance with their PAYE code. They will not be required to pay income tax in Barbados if they have a valid Welcome Stamp.
You will also continue to deduct employee National Insurance contributions (NICs) and pay employer NICs. The employee can stay within the UK social security system for any secondment of up to three years and no Barbadian social security will be payable.
It would be prudent for both you and you employee to take local advice to determine whether there will be any additional tax or reporting obligations in Barbados. Any written agreement with the employee governing the employee’s time in Barbados should confirm that they will be liable for any additional tax or social security that becomes payable as a result of their decision to work abroad. The agreement should entitle you to deduct this from the employee’s pay or seek reimbursements if necessary.
If employees live and work abroad, even for short periods, they can become subject to the jurisdiction of the relevant country and start to benefit from local mandatory employment protections. This could potentially cause issues if you are thinking about terminating employment and the employee argues that they have acquired rights under local employment law. In Barbados, employees can bring a claim for unfair dismissal after one year’s service, whereas in the UK it’s two years.
Take advice on the possible impact of local employment law, particularly if the employment relationship may terminate while the employee is abroad. Make it clear in any agreement with the employee regulating their time in Barbados that their employment contract will remain subject to UK law and jurisdiction.
If the employee’s role involves processing personal data, their temporary relocation could give rise to data protection issues. Barbados is outside the European Economic Area and so not subject to the General Data Protection Regulation (GDPR). Although Barbados has implemented similar data protection laws to those under the GDPR, you should still approach this issue with caution. Ensure you are comfortable that any data transfer will not constitute a breach of the GDPR.
You have obligations to ensure the health and safety of your staff, including providing a safe working environment with adequate facilities and ensuring employees are provided with training, information, instructions and supervision to allow them to work safely. While these duties are unlikely to involve safeguarding employees against jellyfish stings or shark attacks, you will have to carry out a risk assessment to identify any potential risks to the employee and take measures to reduce those risks as far as possible.
You must also ensure that you are complying with the applicable local health and safety laws in Barbados, which contain similar obligations to those that apply in the UK.
Before approving an employee’s request to work remotely from Barbados ask them to enter into an agreement covering the issues that might arise during their time abroad. Include the employee’s return date and confirm that you can require them to return to the UK (on reasonable notice) at any stage if the arrangement is not satisfactory.
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Although every effort has been made to ensure the accuracy of the information contained in this blog, nothing herein should be construed as giving advice and no responsibility will be taken for inaccuracies or errors.
Copyright © 2020 all rights reserved. You may copy or distribute this blog as long as this copyright notice and full information about contacting the author are attached. The author is Kate Russell of Russell HR Consulting Ltd.
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