Understanding the Complexities of Working Remotely Abroad

Work-from-home arrangements in response to the COVID-19 pandemic has triggered a shift to an even more flexible arrangement as being a potentially viable alternative: remote work from other provinces or even abroad. As life slowly transition back to "normal", many employers and employees alike are exploring this as a potentially permanent arrangement.

Certainly, remote work arrangements have appeal. There are nonetheless critical legal issues to keep top of mind of when the workplace is in an entirely different jurisdiction from where the employer is based. No longer will issues be limited to mere lockdown imposed work-from-home considerations. Now, employers and employees will need be mindful of the application of local employment standards legislation and occupational health and safety laws, workplace safety and insurance coverage, taxation, the employee's immigration status, just to name a few. This blog article covers just some of these considerations as a starting point.

Employment Standards Legislation:

As discussed in Remote Work in Canada - Employment Law Implications, each province and territory in Canada has its own employment standards legislation. However, employment standards legislation alone does not provide a clear-cut answer to whether an employee must be physically present in the province in which the employer is based out of for the applicable legislation to apply. Where an employee leaves the employer's "home province" and works out of a different Canadian province, a case-by-case assessment is necessary to determine which employment standards legislation will govern the employee's employment. This can make it difficult for employers and employees alike to know their rights and entitlements with respect to the employment relationship.

Once an employee leaves Canada entirely to "work from home", a whole host of new employment considerations will come into play. Canadian laws may cease to apply, or it may become a contested issue as to which laws would apply in governing that continuing employment relationship.

Occupational Health and Safety Considerations:

In Ontario, the Occupational Health and Safety Act ("OHSA") imposes general obligations on employers to maintain a safe working environment. The OHSA broadly defines the "workplace" as any premise where an employee works in the course of their employment. However, section 3(1) in the OHSA sets out a statutory exemption that states that the OHSA does not apply to work performed in one's private resident. Other Canadian jurisdictions have local occupational health and safety rules that similarly govern.

If an employee leaves Canada to work for a Canadian entity, the employer and employee will need to be mindful of whether and what local occupational health and safety rules apply.

Workplace Safety and Insurance Considerations:

The Workplace Safety and Insurance Board's ("WSIB") primary responsibility is to evaluate work-related injury and illness claims on a case-by-case basis. Some relevant factors include:

• If the employer is covered by the WSIB; and
• If the injury or illness is work-related.

The WSIB has reaffirmed that employees and employers have the same rights and responsibilities when working from home or offsite during the COVID-19 period. However, it remains uncertain whether the WSIB will continue to insure employees that work remotely outside of the province after the pandemic.

The WSIB's general policy on working abroad is that any employee who is an Ontario resident, and whose usual place of employment is in Ontario, is automatically covered under the WSIB for up to six months. If an employee works outside the province for over six months, coverage may be extended on application from the employer.

Tax Implications:

An employee working abroad may be subject to additional tax obligations in the jurisdiction that they work in. In turn, employers may be subject to additional liability when reporting that employee's income as they may be required to account for taxation in both jurisdictions. Domestic tax obligations primarily turn on whether the employee is a non-resident or a factual resident of Canada.

A non-resident is an individual who lives outside of Canada for an extended period of time with limited residential ties to Canada. A factual resident is an individual who temporarily lives outside the country while maintaining residential ties to Canada.

If an employee intends to reside and work outside of Canada for a long period of time, they may be a non-resident employee. In which case, consultation with a tax planner about their obligations prior to departing the country is highly recommended.

If an employee is planning to only temporarily work outside of Canada, they may be a factual resident. In this case, the employee is still considered a resident of Canada for income tax purposes, meaning they must continue filing regular tax returns while working abroad.

In addition, employers may face additional tax obligations even if they did not intend to set up an establishment in the foreign jurisdiction in which the employee is working remotely. Some foreign jurisdictions deem employers to have set up an establishing in the foreign jurisdiction as long as an employee is physically situated there. These are considerations employers will need to discuss with tax experts.

Employers and employees are encouraged to carefully explore eligibility for tax credits and residency status with remote work abroad.

Immigration Implications:

Important immigration questions also arise when employees work abroad, remotely or otherwise. These include whether employees need special visas for this arrangement and if it will affect one's immigration status in the home country.

The short answer is it depends. A variety of factors play into immigration considerations including:

• How long the employee will be working abroad;
• Which country the employee will be working in; and
• The employee's legal status in their home country (ex. citizen, permanent resident, etc.)

Employees who intend to work remotely from abroad should determine whether any work permits or visas are required to legally work. Although some countries have promoted special work visas during the pandemic to encourage remote working from abroad, it is uncertain how the international community will treat working abroad in the upcoming years. Employees who are considering working remotely abroad are encouraged to seek the advice of an immigration lawyer prior to making the big move.

Takeaways:

There are numerous legal implications for an employee working remotely abroad, whether it is outside the province or outside of Canada entirely. This blog articles covers only some of the issues that will arise in those circumstances. Unsurprisingly, the determination of each issue depends heavily on the unique facts of one's case including the length of work abroad, which country the employee will be residing in, and the legal status of the employee.

Given the range and complexity of the measures in place, both employees and employers should speak with an experienced employment lawyer about their best options, and understand what other professional guidance they may require. Lee Workplace Law would be happy to help.