In this age of constant connectivity, employees often take “hush trips” — vacations away from their city, state or country while still working, but without telling their managers where they are.
Hush trips, however, can have drawbacks.
“The fundamental problem with a hush trip isn’t the travel,” said Jo Antoons, an attorney with Fragomen in Brussels. “It’s the lack of transparency. When employees do not disclose where they are physically working, they prevent their employer from assessing its immigration, social security, insurance, employment law, and tax obligations and from making an informed decision about the level of risk it is prepared to accept.”
The biggest risk for a U.S. employer when a worker takes a hush trip, is cybersecurity, said Donald Dowling Jr., an attorney with Littler in New York City.
There also are legal issues, he cautioned: If the overseas working goes on long enough, it could entrap the U.S. employer in criminal payrolling violations in the host country where the employee is working.
“It really matters where work is being done,” Dowling said. “Because where work is being done triggers payrolling and employment law mandates on the employer.”
The concerns about hush trips are numerous, said Nina E. Woodard, SHRM-SCP, president of Nina E. Woodard & Associates in the greater Colorado Springs, Colo., area. There are differences between jurisdictions in workers’ compensation laws, tax laws, labor code laws, health and safety laws, and wage laws, for example.
Even trips in California from one city to another call for different minimum wage considerations, overtime rules, and the like, she said.
“Beyond that I think it is about ethics and honesty,” Woodard added. “If employees do not declare that they are out of office working somewhere, then they may not share other issues or concerns.”
Immigration Compliance Risks
Many employees assume that because they can legally live or travel somewhere, they can also legally work there. That may not be the case.
“Remote work is still work and crossing a border doesn’t make immigration rules disappear,” Antoons said. “Noncompliance can expose the employer to sanctions for illegal employment, and depending on the jurisdiction and circumstances, these may include significant administrative fines, criminal sanctions, and retroactive employment-related liabilities.”
Obtaining appropriate work authorization may also be difficult. Some countries have introduced remote-worker or “digital nomad” visas, but these are subject to eligibility requirements, processing times, administrative burdens, and additional costs.
“Even a short period of working abroad can create immigration compliance risks if an individual does not have the appropriate work authorization,” cautioned Parisa Karaahmet, an attorney with Fragomen in New York City. “In certain jurisdictions, work can expose both the employee and employer to penalties, jeopardize future immigration benefits, and create other compliance concerns. The soundest advice is not to permit an employee to work from another country without the appropriate work authorization in place.”
Social Security Considerations
People may not realize that social security obligations can follow where the work is performed, not where the employer is located, Antoons said. That means an employer may be liable for social security contributions in the jurisdiction from which the employee is working remotely. Failure to pay can result in late-payment interest, penalties, and local registration and contribution obligations, potentially resulting in additional costs.
A hush trip prevents the employer from determining whether registrations, exemptions, or certificates are required. By the time the issue is discovered, the compliance problem may already exist.
Insurance Coverage
Another consideration is whether the employer’s insurance adequately covers employees working remotely from another jurisdiction.
Employers cannot assume that their health, accident, occupational injury, workers’ compensation, or business travel insurance policies will cover an employee on a hush trip. Policies may contain territorial restrictions or distinguish between authorized business travel and employee-initiated remote work. Where coverage is unavailable or insufficient, significant medical, repatriation, or other costs could fall on the employee and/or employer.
“Prior disclosure [of a hush trip] enables the company to establish whether appropriate insurance coverage is in place and, where necessary, arrange additional coverage,” Antoons said. “With a hush trip, companies often discover the insurance gap only after something has gone wrong.”
Employment Law Requirements
Crossing a border can mean crossing into a completely different set of employment law obligations. Employers may need to consider mandatory local employment protections, including health and safety, working time, remuneration, and equal-treatment requirements. The obligations vary between jurisdictions and according to the circumstances and duration of the arrangement.
“However, the bottom line is that an employer cannot comply with rules it doesn’t know have been triggered,” Antoons warned.
Personal and Corporate Taxation
Working from another country can potentially trigger host-country personal income tax, payroll, or withholding obligations. Whether such obligations arise will depend on local legislation, any “double-tax treaty,” and the duration of the employee’s presence.
As for employers, they should not assume they will avoid corporate taxation even if the arrangement is temporary.
“Taxation will depend on the nature, duration, and regularity of the employee’s activities, their role and authority, and the provisions of the applicable tax treaty,” Antoons said.
International Remote-Work Policies
Given these complexities, multinational companies increasingly monitor temporary international remote work through formal policies. These may include requiring all workers to notify the company when working abroad, limiting remote work to certain countries, restricting visits to the local office in the host country, and limiting the number of remote-work days within a calendar year.
It may not be practical for an employer to undertake an exhaustive immigration, social security, insurance, employment law, and tax analysis every time an employee wishes to work abroad for a few days. Instead, companies should have policies that exclude higher-risk situations while permitting flexibility where risks are considered manageable.
“Many employers are willing to accommodate international remote work but only if they have visibility into the employee’s trip,” Antoons said. “Without that, they do not have the ability to fully assess their obligations.”
Dana Wilkie is a freelance journalist based in Ormond Beach, Fla.
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