Where will your employees work in the “next normal”?

What does this mean for the business and the employee?

COVID-19 is challenging companies to think differently about how and where their employees work. In the midst of the crisis, some companies announced (semi) permanent flexible “work from anywhere” policies. Part of an employee-focused approach that may continue after the pandemic passes – which demonstrates flexibility and support for employees who prefer to work from an alternative location. It also enables potential corporate benefits such as reducing real estate footprint and enabling access to a wider talent pool.

In this paper, Deloitte’s GES experts explore the questions leaders should ask if they are considering remote work as part of their future workforce strategy, and what they should think about next to manage this new way of working.

As they step into a new reality, leaders need to take a take a longer-term view to shape the “next normal” and consider four imperatives to address and manage the current and future potential tax compliance risks of working remotely on a longer-term or permanent basis to limit any tax exposures.

The key to a successful remote work strategy: Four practical steps to help mitigate risk

Deloitte’s view is that companies should develop an action plan that addresses current and future potential tax compliance risks. We believe it is essential to adopt a holistic view to enable individual cases to be controlled and assessed (from a corporate tax, employer and employee compliance perspective) and that there is appropriate tracking and identification of the type of entity that employs the individual.

Here are four actionable steps:

Step 1: Assess people exposure and risks

Data collection: Start by gathering data on remote workers to understand size and levels, locations, timeline, etc.

Risk assessment: Identify and assess the immediate compliance risks and downstream impacts (tax, payroll and reward impact). The end goal is to use the key findings to develop policies and processes to manage long-term risks.

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Step 2: Consider digital tracking technologies and monitor potential tax triggers

Travel tracking, analytics and communications tools can be used where permissible to pre-empt tax exposure, locate workers, and enable remote work. For example, travel tracking dashboards and program analytics, including benchmarking and modeling (for data on policy usage, travel patterns, spend, and performance) can support strategic decisions, while communication hubs and agile communication channels (such as mobile apps, text, chat bots, and video) can be used to drive compliant behavior.

Leverage automated technologies to track location data, such as employee-friendly calendar apps with built-in location services. This will help employers to manage employee expectations in terms of tax withholding and income reporting, as well as the employer’s fiduciary responsibilities around tax compliance.

• Implement digital solutions that analyze data and report risk based on a robust rules engine.
• Be proactive in keeping up with the latest regulatory updates and consider their applicability and impact to your remote workforce.
• Reassess risk exposure on a frequent basis.
  

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Step 3: Use multiple data sources to help with understanding workers whereabouts

Data sources can include travel and expense reports, HRIS systems, Virtual Private Network (VPN) data, surveys or calendars where employees are asked to opt in and validate their location. Once the location data are validated by the employee, it can be imported into an analytics solution to identify risk exposures and compliance obligations based on company policies and tax law. Reports and country dashboards identifying risk can then be used to make payroll tax adjustments and other compliance decisions.

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Step 4: Consider the role of global mobility as a strategic partner

As traditional long-term expat assignments reduce in volume, global mobility can play a strategic role in shaping the organizational response to remote working given the function’s experience collaborating across stakeholders (Talent, Payroll, Tax, etc.) to manage compliance and the global talent experience. A global mobility function can also pivot its expertise to increase focus on remote work, such as advising the business on staffing assignments virtually and designing remote work programs and policies, aligned with other global mobility policies such as short-term assignments, business travelers and commuters.

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Preparing for the future workforce

As organizations move beyond responding to the immediate crisis and look to strategies for accelerating business recovery, it is likely they will use this opportunity to rethink the future of work – including what work is and how it is delivered, who performs the work, and where it is performed – and course correct.

Deloitte is urging organizations to reflect upon and consider these four imperatives:

• Balance the interest in work from anywhere policies and or remote working with potential compliance implications.
• Pay more attention to the data to determine the tax exposure (payroll, withholding, etc.) when employees are working from locations different from their home offices.
• Focus on having the right technology in place to identify where employees are working and enable triage and informed decision-making. Technology tools that track and analyze remote worker locations and educate employees on actions to mitigate risk can help organizations sustain a successful remote work strategy.

• Flex global mobility support and start thinking about who is best positioned to establish, lead and manage the strategy and implementation of a remote work program and policies. Global mobility may be uniquely positioned to lead from the front.given its experience with global talent strategies and mobility, planning and deployment, and coordinating across similar stakeholders.
  

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Get in touch

Craig Muir
Deloitte Global Leader Tax & Legal Global Employer Solutions
cmuir@deloitte.co.uk | Read bio

Jim Pickett
Principal
GES Global and US Market Leader
Deloitte Tax LLP
jampickett@deloitte.com

Michelle Fertig
Senior Manager
GES US Digital Transformation
Deloitte Tax LLP
mfertig@deloitte.com