There are also labor laws in foreign jurisdictions that can come into play.
Ms Charmaine Neo, Head of Employment Practice and Investigations at WMH Law Corporation, gave the hypothetical example of a Singaporean employee employed by a Singaporean company posted to work in the UK.
“Your contract is governed by Singapore law … but if you work in the UK they may have different working hours or even different minimum wage laws,” she said.
âWhile your (employment) contract may be perfectly legal under Singapore law, the fact that you were working in the UK itself could also expose you or your company to liability under Singapore law. this country. ”
Mr. Addy of KPMG said that to mitigate these risks, companies must ensure that they “plan accordingly and put in place appropriate policies and guidelines for employees wishing to take advantage of remote working arrangements.”
One way to do this is to ensure that the company has an official legal presence in the overseas country in which the employee is deployed.
Mr Woo said options include employing the worker at a satellite branch of the office when he is there, or transferring the worker to a sister company based in that country.
If these two options are not available, Mr. Teo of Elite Group of Companies said companies can also register the employee with an employment agency or “professional payroll companies” who can serve as an employee. agent for the Singapore employer.
In these cases, the employee will be considered a full tax resident of the foreign jurisdiction and will be subject only to the tax and labor laws of that country.
Mr. Sivakumar Saravan, senior partner and tax manager at professional services firm Crowe Singapore, noted that requirements also vary across different industries.
âThis licensing issue is more critical for industries with heavily regulated activities, such as legal advice, fund management and financial advice, where there are strict licensing requirements; laws in most jurisdictions prohibit remote employees from engaging in such regulated activities unless the hiring companies have the necessary business licenses, âhe said.
WORK BENEFITS AND CPF CONTRIBUTIONS
Human resources experts said that overall, it would be tedious for a company to provide those working remotely overseas with all of the benefits afforded to its Singapore-based workers.
These benefits include restrictions on working hours, health care benefits, and insurance.
Ms Wee, the human resources practitioner, said that for most periods of short-term remote work, companies and employees agree that no benefits will be provided.
However, this will be tricky when the work abroad is carried out on a longer term.
âIf it is a permanent position (abroad), the HR contract must be drawn up in accordance with the legislation (of the foreign country)â¦ it must be linked to social security pensions and social benefits in the country She said.
As this is a cumbersome process and best done by an entity located in the foreign country, Ms. Wee said that a “fundamental” decision must be made as to whether the work “should be done overseas. “.
One solution that can be tempting for employers is to turn their permanent staff working remotely into freelance, where the worker will not receive any benefits and will perform project-based work.
Mr Teo said that while it may seem like an easy way out, it can backfire.
“(Employers) may not be confident that this person will always be able to work for them every working day, because self-employment by definition is project-based,” he said.
He added that as freelancers, some people may worry about unstable income, which can fluctuate depending on the number of projects on their plate.
Economist Walter Theseira, University of Social Sciences, Singapore, said that while it is true that companies do not need to provide benefits to the self-employed, the self-employed, in turn, can also “work. “At will” and can usually leave work with little or no notice, and owe much less homework. ”
âMy feeling is that if the employer has the same expectations for the frontier worker, in terms of control and supervision, as for a full-time worker located in Singapore, then it would be an employment contract ( as opposed to independent), despite attempts to define it otherwise, âAssociate Professor Theseira said.
Regarding CPF contributions, experts interviewed said that employees working remotely do not need to do so.
The CPF Board of Directors website states that CPF contributions “are not payable out of wages paid to your employee who is employed to work overseas.”
However, Professor Assoc Theseira noted that the CPF Act defines an employee who is required to contribute as a person âemployed in Singaporeâ.
âThe relevant question is what does ’employed in Singapore’ mean,â added the former Member of Parliament designate. “Does this mean that the employment must be physically performed in Singapore, or does it mean that the contract of service and employment is governed by Singapore law and for a Singapore-based employer, or of them ? “
Ms. Neo of WMH Law Corporation noted that while CPF is “generally not payable for employees working overseas,” the pandemic has shown employers and employees are moving towards more flexible working arrangements that may include remote work.
“I fully agree that the authorities should further examine whether current legislation supports such a framework to give more clarity to employers and employees,” she said.