Traveling abroad does not necessarily mean the termination of employment relations with a Ukrainian employer. The employee can continue to perform work remotely, but a prolonged stay in another country involves additional legal, tax, and organizational issues.
Is it legal to work for a Ukrainian company from abroad? Is it necessary to officially register the remote work format? What taxes are paid from the salary, and who is responsible for occupational health and safety? Let's figure it out together with an expert.
Can an employee who is actually abroad continue working for a Ukrainian employer? Are there any restrictions on the duration of such a stay?
Right. An employee can continue working for a Ukrainian employer while staying abroad. The Labor Code of Ukraine and other legislative acts do not establish a general limitation on the duration of such a stay.
An exception to this rule is civil servants. They can only work abroad within the scope of an official business trip.
Is it necessary to officially change an employee's work format to remote if they have moved abroad and continue working from another country?
The legislation does not contain a direct requirement regarding this. At the same time, in such a situation, it is advisable to arrange for remote work – this will simplify the regulation of labor relations for both the employer and the employee.
The procedure for performing remote work is defined by Article 60-2 of the Labor Code of Ukraine. Therefore, the optimal option would be to transfer the employee to remote work with the definition of the procedure for interaction, work schedule (if necessary), use of equipment, and other conditions.
Does the employer incur tax or other obligations in the employee's country of residence?
The employer continues to withhold personal income tax and the military levy from the employee's salary and to accrue the single social contribution in accordance with Ukrainian legislation. At the same time, the employer may incur additional obligations in the country where the employee is staying.
This depends on the legislation of the specific state (whether he is considered a resident of the state in which he is located), the tax status of the employee, and the format of interaction with him. For example, it may matter whether the employer pays for housing rent or provides the employee with equipment at its own expense, etc.
Therefore, if an employee works from abroad for a long time, it is advisable for the employer to check the legislative requirements of the country where they are staying and assess potential tax and other legal risks.
How to properly organize the payment of salary to an employee working from abroad?
Salary is paid in accordance with Ukrainian labor legislation in hryvnias and within established deadlines. Most often, funds are transferred to the employee's bank account in Ukraine. If another payment method is used, it must comply with the legislation of Ukraine and not contradict the rules of currency legislation.
Do the guarantees of Ukrainian labor law regarding working hours, vacations, sick leaves, and occupational safety apply to such an employee?
Right. If the employment relationship continues under Ukrainian law, the employee retains basic labor guarantees, in particular regarding working hours and rest time, annual leave, remuneration, sick leave (under the conditions provided for by the legislation of Ukraine), and other labor guarantees.
At the same time, these guarantees apply taking into account the specifics of remote work and the provisions of Art. 60-2 of the Labor Code of Ukraine.
Who is responsible for occupational health and safety of an employee if they work remotely from another country? Does the employer have to control their working conditions?
During remote work, the employee independently determines their workplace and is responsible for ensuring safe and harmless working conditions there. This is provided for by Part 4 of Article 60-2 of the Labor Code of Ukraine.
At the same time, certain occupational health and safety duties are also placed on the employer. According to parts 4 and 6 of Article 13 of the Law of Ukraine «On Occupational Health and Safety,» during remote work, the employer must systematically brief (train) the employee on occupational health and safety and fire safety regarding the use of equipment and tools recommended or provided by the employer. The employer is also responsible for the safety and proper technical condition of the equipment and means of production that they transferred to the employee for the performance of work.
Regarding control, Article 60-2 of the Labor Code of Ukraine stipulates that during remote work, the employee distributes working time at their own discretion, and internal labor regulations do not apply to them, unless otherwise provided by the employment contract. At the same time, the employer can control the performance of work within the limits established by labor legislation and the employment contract.
What should an employer do if an employee has not reported a prolonged stay abroad, but continues to work remotely?
The employer's actions primarily depend on whether the remote work is properly documented and what conditions are provided for in the employment contract.
- If the remote format is not documented, the employer should clarify the circumstances in writing, request an explanation from the employee, and propose settling the work format in accordance with the terms of the employment contract. If, according to the terms of the employment relationship, the work must be performed at a location determined by the employer, the employer may demand compliance with these conditions. Further actions will depend on the employee's behavior and the specific circumstances.
- If the employer is satisfied with the performance of work from abroad, it is advisable to properly formalize the remote work format.
- If remote work has already been arranged and the employment contract contains no territorial restrictions regarding the place of its performance, the employer cannot demand that the employee work only from Ukraine. According to Article 60-2 of the Labor Code of Ukraine, remote work is performed outside the employer's work premises or territory, at a location chosen independently by the employee, using information and communication technologies.
At the same time, the employer should find out the employee's country of residence and their legal status in it. This will make it possible to assess potential tax, labor, and other legal risks that may arise in accordance with the legislation of that state.
