Due to the protracted epidemic, most companies closed their offices and employees switched to work from home. Revolut, Siemens and Spotify have — among many others — allowed their employees to get their work done from anywhere and become so-called digital nomads.
This trend has proven popular with employees, as evidenced by Airbnb’s 2021 survey. In the first quarter of this year, long-term stays of at least 28 nights accounted for 24 percent of the nights booked through the site, compared to 14 percent in the same period in 2019. According to tour operator Club Med, in terms of destinations, Thailand, Sri Lanka and Singapore are the most popular countries where life as a digital nomad is really comfortable.
But does “work from anywhere” really mean an employee can literally work from anywhere?
According to Darren Murph, head of telecommuting at a platform called GitLab, employers tend to disregard the fine print part after the impressive-sounding “you can work from anywhere” clause, which in reality means that “you can work from anywhere your employer can legally employ”.
It may seems a minor issue, but working for long periods from a country where your employer does not have a presence can have significant tax implications for both the employer. In such cases, there is a possibility that the presence of the employee means the employer will become subject to local corporate tax, payroll and other regulatory obligations. But the situation is not much more favorable for employees either, as they have to pay personal income tax both at home and at their temporary residence
According to the expert, in such cases, the employer should be aware of local rules and regulations to avoid any inconvenience.
However, such agreements may involve costs that some employers may find unaffordable, and even if they are willing to pay, there is no guarantee that the company will be able to be legally present in the country chosen by the employee.
To avoid such situations, many companies have made the possibility of teleworking conditional for employees. Revolut, for example, allows employees to work from anywhere “as long as they have the right to work at the destination of their choice”. In addition, the company only allows 60 days to work abroad within a 12-month period. The situation is similar with Spotify, which allows employees to only work at locations where the company has a permanent presence.
Google and Amazon used to be at the forefront of telecommuting, but now they have also dialed back their offer. Amazon announced in March that “an office-centric culture will be the baseline,” and Google will allow some employees to do their work from home while the rest move to another office.
However, according to the expert, companies need to realize that hybrid work is not sustainable in the long run. It will be difficult for organizations at some point in the future to reconcile whether they are in favor of telecommuting or office workers.
The situation is also difficult for employees, as those who have so far preferred the social atmosphere an office can provide will find it difficult to become digital nomads working remotely, and those who have worked from home so far will likely find it challenging to return to the office.