Closed borders and workplaces Closed borders and workplaces

Before the Novel Coronavirus (COVID-19) pandemic, many of us took freedom of movement for granted. But measures to contain COVID-19’s spread slammed the brakes on cross-border travel, stranding business and other travelers in foreign locations and leading many businesses to send their employees to work from home. 

For the leaders of businesses with globally mobile workforces, the most immediate priority was finding where their people are and doing what it takes to protect them and their families. Even prior to this time, tracking and monitoring employee movement was a huge challenge, and companies that have invested in global mobility management systems are realizing the benefits. Other companies have found it harder to determine the location of all their employees or help them navigate the quickly changing conditions.

Over the longer term, critical measures to slow the virus’s spread, such as physical distancing and quarantines, will be with us for an unknown length of time — as will closed borders, stranded employees and work-from-home arrangements. These measures are hugely important, but for as long as they endure, they can also create new complexities, discussed below, for immigration, tax and employment law.

Immigration issues in a world of closed borders

The speed with which companies and their employees needed to react to protect their people put them in the crosshairs of compliance rules governing immigration, work permits and business registration.

As countries and territories everywhere enact and update response policies and emergency measures, it’s critical to confirm that employees have and retain the legal right to work at their current global locations during the outbreak.

Immigration complications may also arise when employees come home. For example, even with all the appropriate immigration paperwork in place, returning employees can face strict quarantine requirements on when they enter their home countries or territories, and it’s important to warn them about what to expect and support them through their quarantine period.

Personal and employment taxes

Personal and employment taxes always need to be considered where a person is working in a different country or territory from where they are employed. These same tax issues arise at this time, especially with large numbers of employees moving quickly without time to prepare. These exposures need to be reviewed together with the local emergency measures that countries and territories are adopting to address the financial fall-out.

Permanent establishment risk is one of the most important issues. Businesses need to closely monitor any tax exposures created when people work for an entity in one jurisdiction while located in another.

Employment law considerations

Managing the employee experience at this time is top of mind for many employers, but they must also ensure the business continues under severe financial strain. For many companies, this means thinking about adjusting employment arrangements to stem the loss of jobs, and this can have legal implications.

Local employment laws do not usually provide for pandemics, so any changes to employment arrangements at this time likely require an agreement between the employer and employee, preferably in writing.

Keeping workers safe and engaged

Employee relations and respect for employee rights is as important as ever to maintain trust and sustain your business. Ongoing communication is absolutely critical. Business leaders and those who support employees, including Global mobility, tax and legal teams, need to be visible and accessible to the employees they support.

Remember that it’s okay to not have all the answers. The best approach is to stick to the facts that we know today and avoid speculation amid rumors and predictions.

Finally, it’s important to look ahead to the other side of this. Many of us have quickly adapted to innovative ways of working – more flexible, more digital, more sustainable – and we need to hold on to these to benefit our businesses in the years ahead. The way you manage this challenging period with your employees — as well as your customers, suppliers, regulators and other stakeholders — can help strengthen your brand as the recovery sets in and lay a foundation for your future success.