Remote work has become a permanent facet of the employment landscape1—and for good reason. From reduced overhead costs to enhanced employee retention, remote work has a lot to offer employers.
Plus, there are downsides to return-to-office (RTO) policies. In a report by BBC, Apple—the global technology giant—decided to roll back work-from-home flexibility and received massive pushback. About 76% of employees were dissatisfied with the changing policy, while 56% considered quitting.2
This made it clear to employers: hiring and working remotely is here to stay.
While hiring remotely can connect you with skilled candidates from across the globe, it can add considerable complexity to your legal compliance. After all, every country and region has different employment laws and regulations.
In this article, we’ll explain the importance of remote work compliance and highlight some crucial regulatory requirements to keep in mind. We’ll also discuss effective strategies for human resource teams to streamline their compliance burdens.
The Importance of Compliance Working Remotely
There are many benefits of hybrid work for employers. However, as a global, remote employer, adhering to all relevant labor laws and regulations is critical. Failing to do so could lead to the following consequences:
- Litigation – Companies that don’t comply with global regulatory compliance may face litigation from disgruntled employees, which can require a lot of time and money to resolve.
- Fines – In some cases, companies may experience fines or penalties for noncompliance.
- Reputational damage – Failing to comply with workplace regulations can damage a company’s reputation in the eyes of employees and customers.
- Criminal charges – In extreme cases, employers may be forced to shut down their businesses or face criminal charges for their lack of regulatory compliance.
With these consequences in mind, having a solid regulatory compliance plan can save you a lot of legal headaches and reduce costly operational disruptions.
Remote Work Regulations to Consider
Now that you know the importance of remote work compliance, let's review some of its core components:
Labor contracts outline your company’s commitment to its employees regarding their benefits, statutory leave, overtime pay, working hours, salaries, and more. The laws regarding labor contracts vary from one jurisdiction to the next, so you must ensure each employee’s labor contract is suited to their primary work location.
When onboarding international employees, you must take extra care to:
- Clarify exactly where your new employee is based.
- Find out whether or not they have the right to work.
- Determine if they’re entitled to any home office equipment.
- Provide the right location-mandated training.
Not only does meeting location-based regulatory requirements mitigate potential risk, but they also ensure a smooth remote onboarding experience for international hires.
Some country’s governing bodies require employers to provide workplace posters outlining their rights. These posters contain the following types of information3:
- Minimum wage requirements
- Immigration agency inspection notices
- Payday notices
- Worker’s compensation benefits
- Paid sick leave policies
- Whistleblower protections
Since remote workers can’t view these posters from your office, you may need to mail them physical copies during onboarding.
Wages and Hours
When it comes to paying remote workers, you must make sure that you comply with each employee’s location’s:
- Minimum wage laws
- Full-time vs. part-time employee classifications
- Overtime regulations
- Payroll frequency rules
- Pay stub information requirements
Since these laws can vary significantly from one locality to the next, the compliance process can get complicated when managing hybrid teams.
Companies are often required to file business tax returns in every location they have remote workers. Thus, they must adhere to each location’s filing deadlines, tax rates, and tax charges.
Countries and regions are responsible for regulating employee benefits. These laws can dictate what social security benefits, unemployment benefits, family leave, healthcare, and pension entitlements companies must provide based on their workers’ locations and duration of employment.
In many places, employers are required to purchase worker’s compensation insurance for their employees. This insurance covers qualified injuries or illnesses that employees suffer on the job.
So, what happens when employees’ workplace is their home? Some government agencies classify remote employees’ homes as “work environments,” enabling them to seek workers’ compensation under certain conditions.
As such, your human resources (HR) department should clearly outline your policies for employees’ work environments to ensure they’re safe and healthy.
Breaks and Meals
In many places, remote workers are entitled to the same rest and meal breaks as their in-office counterparts.
Harassment and Discrimination
While your remote employees may not interact with each other in person, you still need to take steps to prevent harassment and discrimination in the virtual workplace, such as:
- Discriminatory language within workplace chats
- Inappropriate clothing worn during meetings
- Offensive objects in the background of video conference calls
You can prevent these issues in your hybrid workplace strategy by providing clear, documented expectations for online communication and offering harassment training during onboarding.
If an employee isn’t the right fit for your company, you may decide to terminate them. Before you do, you must make sure you follow the proper protocols, including:
- Verifying that you have legal grounds for firing the employee.
- Providing them notice of their termination in a legally compliant manner.
- Calculating their last paycheck correctly and paying it on time.
- Notifying their EOR provider before taking action and consulting them on the termination.