Over the past couple of years, the term ‘workcation’ has emerged in the business world, referring to an individual wishing to combine their work and personal life, in a new way.
It comes from an increase in employees across the country requesting a vacation that allows them to work remotely and travel for leisure or to visit people abroad at the same time.
Although this seems like an exciting and much welcomed approach for employees, as it enables them to travel elsewhere without using annual leave, employers will have to properly consider the potential risks of adopting this new way of working.
One consideration is that employers allowing employees to take a workcation may have extra administrative and payroll obligations. For example, it’s possible that an employee carrying out work in an overseas jurisdiction could be deemed a ‘permanent establishment’ for payroll purposes.
Further points that employers may want to think about when considering whether to offer, or agree to requests for, a workcation include:
- The tax laws in the relevant country
- The length of time the employee will remain there and how this may affect the employer’s tax obligations
- Employment terms for employees in the country (holiday entitlement, notice pay, redundancy entitlements etc)
- Data security, employees working abroad will still be obliged to abide by data protection and GDPR laws
- Whether the employee has access to a protected internet connection, to minimise the risk of security breaches
- The local laws of the relevant country.
Can Workcations Work In Reality?
Similar to all remote working arrangements, there must be a level of trust between employer and employee and procedures in place that allow an employer to monitor an employee’s progress and workload.
We’d also recommend having an agreement in place that sets out the intended terms relevant to the workcation (e.g. where the employee will be based, for how long, how it can be ended by either party etc).
If you have employees who are requesting to take a workcation, these should be considered on an individual basis. It’s also a good idea to take specific advice on requests, both in the UK and in the jurisdiction of the country where the work is to be carried out.
Posted on November 7, 2022