Teleworking has spread during the pandemic and, in many cases, has become established as a company policy in many organisations. Teleworking can take place between companies and employees located in the same country or between companies located in one country and workers in another, although there is no legislation specifically regulating this situation.
We have prepared a series of articles in which we address the three main options for companies and employees for offshore teleworking. In this first article we discuss the possibility of working as an employee for the company.
Option A: Working as an employee for the company
This option is the first to be considered when thinking about teleworking from a country other than the one in which the company is located. Although it may seem the most obvious solution, it is administratively very complex for the company.
For the employee to be in another country, the company is required to have a presence in the country where the employee resides. Why? Because the company must pay the teleworker's contributions in the country in question. In this way, the teleworker will be covered for access to the country's health system and social benefits.
If the company has a worker in another state the entity must establish a registered office and have a legal representative. They must also file the necessary forms, so they must have at least one agency and a consultant to assist them.
If the company does not comply with this obligation, the relevant administration could require the company to pay social security taxes and to hire the worker, obliging it to have the headquarters mentioned above.
The company may already have an establishment in the country in question. In this case, two options arise. On the one hand, the head office in the country where the employee resides may recruit the employee and, on the other hand, the possibility of recruitment through this head office may not be possible because the employee has no place in the team. This can occur, for example, when the head office performs a different job than the entity in the other country. Imagine for example that a head office in Germany does the logistical work and the head office in France does the sales work.
If the company has a head office and decides to incorporate the employee in that country, it would have to take into account the internal implications, as well as the cost implications, which would be transferred from one head office to the other.
If you would like more information on the obligations that companies have to hire a worker, you can consult our Wikipedia articles for Spain, Italy and Ireland.
And if you want to see the other two options for teleworking for a company abroad, you can access them through these links: