January 16, 2022
📢 Introducing Lano 2.0!Global Employment just got a whole lot easier
📢 Introducing Lano 2.0!
Global Employment just got a whole lot easier
Although remote work isn’t exactly a new concept, the term has turned into a real buzzword ever since the outbreak of the COVID-19 pandemic. Unfortunately, in all the excitement about the rise in remote work opportunities, people have started to throw around terms like remote work, work from home and work from anywhere without really paying attention to what they actually mean. And although in normal day-to-day conversation, mixing them up is no big deal, it’s crucial to be aware of the subtle differences when using them in a work context since they all come with different legal implications.
To clear up any existing misinterpretations of what remote work really means, we have talked to lawyer and remote work compliance consultant Bhagyashree Pancholy. In this article, we will thus look at how the different terms and concepts linked to remote work are interpreted by law, what compliance issues they involve and what both employees and employers should keep in mind when venturing out into the world of remote work.
The State Of Work
After reading through some of the thousands of articles that have been published around questions such as “What is remote work?” or “What is the difference between remote work and work from home?”, you could sum up their definitions as follows: Remote work means working from wherever I want and working from home means, well, working from the comfort of my own home - if I wish even in my pyjamas. Sounds about right, doesn’t it? Well, for most employees and employers out there who have been forced to quickly adopt remote working models due to COVID-19, it probably does.
For many employees, remote work is the promise of being able to work from anywhere. Be it from home, from a different part of the country or even from abroad while enjoying a nice workation somewhere on a beautiful Caribbean beach. For many employers, on the other hand, the term ‘remote work’ and its different subforms have turned into somewhat magic words to put on their job postings in order to attract new talent.
When searching for a new remote job, candidates come across a wide variety of different wordings designed to attract their attention. While a job description for an SEA Marketing Manager position reads “job location: anywhere”, another job posting for a Senior Data Analyst promises candidates a “work from everywhere lifestyle”. And then, of course, there are claims that employees will be able to work 100% from home or enjoy the benefits of a hybrid work model, spending half their time in the office and half their time working from home.
But when companies make such offers to their future employees, do they actually know what they’re in for? Are they actually aware of the legal implications linked to remote work and all its different variations?
Well, in many cases, they’re not: “Companies often use these terms interchangeably in their workplace policies and employment contracts. But there are some big compliance related differences and terms like work from home, work at home or work from anywhere may refer to different locations or different jurisdictions etc. This common mistake can have severe consequences and may lead to fines, penalties, lawsuits and, in some cases, cancellation of company registration”, explains remote work compliance consultant Bhagyashree Pancholy.
If remote work laws didn’t play a big part in employment jurisdictions around the globe two years ago, this has drastically changed with the exponential rise in remote work linked to the coronavirus pandemic: “Legally speaking, there weren’t any definitions for these terms before, but over the course of the pandemic, these definitions have been adopted by courts as the result of various litigations”, Pancholy comments. So, let’s have a look at what the most-used terms in the remote work discussion actually mean from a legal point of view.
The term ‘remote work’ itself actually needs to be considered as an umbrella term for several different concepts describing ways of working from any place except from a traditional office. In this sense, the word “remote” can be taken quite literally by its linguistic meaning, i.e. “used to refer to an activity that is done away from the place where it usually happens, especially by means of technology” - definition of ‘remote’ by the Cambridge Dictionary.
It thus includes commonly used concepts such as working from home, telework, telecommuting and working at home as well as any kind of hybrid models - i.e. working part-time from the office and part-time not from the office - and the concept of globally distributed teams which could be considered the most ‘extreme’ form of remote work and the one most difficult to handle. As the members of a regionally distributed team are spread across different countries and time zones - i.e. they are based in a different jurisdiction than their employer - the legal (taxes, payroll, etc.) and organisational challenges for companies are not to be underestimated.
And while the legal interpretation of remote work is pretty straightforward, it’s a whole different story when it comes to the concepts of “working from home” or “working at home” which are often (wrongly) used interchangeably.
When reading through some remote work policies that were implemented by many companies around the globe, you will soon figure out that more than just a handful of organizations worldwide use the terms “work from home” and “work at home” interchangeably. And although, from a linguistic point of view, the difference may be only so small as a change of preposition, the differences between these two concepts on a legal level are quite important. Using one or the other in the wrong way “could have massive legal repercussions”, emphasizes Bhagyashree Pancholy. So, what distinguishes working from home and working at home?
According to its legal definition, working from home basically means working from any place that isn’t the office but lies within the same legal and tax jurisdiction. Employees whose employment contract includes a work-from-home clause are thus allowed to work from various different locations (their home, co-working spaces etc.) as long as they don’t leave the area of the legal jurisdiction under which they’re hired. In general, working from home is legally considered to be a more permanent arrangement. Working at home, on the other hand, is usually interpreted as a short-term arrangement where the employee really only works from one single fixed location which is their own home - i.e. working from a co-working space is not allowed under this remote work model.
In a nutshell: In most cases, when people - this includes businesses, organizations and blog posts writers - use the term ‘work from home’, the correct legal expression to use would be ‘work at home’. Although ‘work from home’ linguistically suggests that the work is carried out ‘from the employee’s home’, the legal interpretation of the word ‘home’ doesn’t refer to the employee’s house in this case but any place apart from the office - within the same jurisdiction.
Although the terms ‘telework’ and ‘telecommuting’ are not as present in the current discussion about new work models, they are quite significant. “Telework is actually what the laws refer to. Many of them don’t use the term ‘remote work’”, states employment lawyer Bhagyashree Pancholy, before adding: “Telework is more defined in terms of what equipment is used for work, as opposed to remote work which is primarily based on the location of work.” As for the term ‘telecommuting’, it is also often used in official contexts (e.g. in papers such as the U.S. Census Bureau’s report “The State of Telecommuting in the U.S.”) to describe working from a location where a person performs telework.
Create compliant contracts in minutes
Pay your team members in 50+ currencies
Grow your global team in 170+ countries
We’ve already mentioned that each of the terms used to describe remote work set-ups (work from home, work at home, etc.) comes with different legal rights and obligations. In order to avoid compliance issues, employees and employers should therefore carefully check whether the notion used in the written documentation ruling their employment relationship is actually adequate.
Some of the compliance issues that may arise in the context of remote work include:
Corporate taxation: Companies may be liable for extra taxation depending on the employee’s remote work location.
Lawsuit for discrimination: In case not all employees enjoy the same remote work rights, businesses may be sued for workplace discrimination.
Mobility challenges: Employees changing countries while working remotely may run into problems with the Immigration Department because they don’t have an adequate remote work visa.
Ergonomic compliance and health & safety: Remote work laws around the globe obligate employers to carry out assessments of their remote employee’s workplace.
Compensation and benefits: Getting remote work salaries and benefits right can be a challenge.
Misclassification of workers: Having a globally distributed team means having to deal with different legislations and different sets of rules for the classification of workers.
What’s also interesting to know is that it’s mandatory for employers to determine a fixed work location for their employees even though they work remotely. Any written employment documentation needs to specify the employee’s place of work.
When applying for a remote job role, make sure to double-check what the company’s remote work policy actually means. For more useful questions to ask in a remote job interview, check our related blog post.
Carefully check with your employer from where you are actually allowed to work under the organization’s remote work policy.
If you’re on a company-sponsored visa, you’re obliged to maintain your status quo which means that you can’t simply switch to a remote work model involving a change of address or any other criteria related to your visa eligibility.
Be clear and transparent on your job descriptions when hiring for remote roles, i.e. adopted remote work model (work from home, work at home, hybrid, etc.) and requirements regarding time zone and jurisdiction employees need to be based in.
Be careful which terms you use in your written documentation (contracts, remote work policy etc.) to describe the remote work model you offer employees.
Check with a remote work consultant which legal implications come with the chosen term to avoid compliance issues.
After having looked at the common (mis)conceptions of the various terms that are being thrown around in the remote work discussion, their legal definitions and the compliance issues that arise with their use, it all comes down to one final question: Is the dream of working from wherever you want actually possible? Unfortunately, the answer would be no: “Work from anywhere is a beautiful concept but it is legally impossible as employment laws are very strict. However, companies like Lano which offer Employer of Record solutions do solve the compliance hurdle, and if the dream of working from anywhere was achievable, these companies would make it a reality”, Bhagyashree Pancholy concludes.
Looking for a way to hire remote employees in different jurisdictions without having to worry about compliance? Lano’s Employer of Record solution makes it easy to hire and manage globally distributed teams. Recruit top talent in over 150 countries without having to set up a legal entity. From compliant contracts to global payroll, we’ve got you covered.
What does it truly mean to ‘work from anywhere’? Is it really possible? And how are the terms we use to describe remote work being misused? Learn more in our podcast.
Sign up for our monthly newsletter and get regular updates on new products, integrations, and partners. Stay up to date with our blog, podcast, industry news, and many more resources.
We make it easy for you to hire the best talent and pay your team members, no matter where they are.
© Lano Software GmbH 2023