For global remote working to work, we have to talk about overtime

If you set foot in an upmarket Lisbon restaurant over the next few weeks, be sure to keep an eye on how many of your fellow diners are sending work emails during dinner. They shouldn’t be!

Portugal’s decision to make it illegal for employers to contact workers outside of their agreed working hours has sparked a flurry of debate and led some commentators to argue that the balance of power has now tipped decisively away from employers.

Without a doubt, it’s one of the more significant and concrete legislative changes to employment law that we’ve seen in years – anywhere. And it’s a reminder that, as we enter the era of remote-first working long term, it’s high time we had a proper conversation about overtime. 

For while the pandemic has accelerated the shift towards remote working, not allowing for much time to iron out the details and causing some teething pains along the way, the business world had a big problem with excessive, often unpaid out-of-hours remote working well before Covid.

An always-on corporate culture that leads to overtime

Last year, a prominent think-tank claimed that working from home during Covid had caused an ‘epidemic of hidden overtime’ in the UK. On the other side of the world, the average Australian employee has worked 1.5 hours more unpaid overtime every week since the pandemic while, at the same time, the proportion of Australian businesses with staff working at home more than doubled, from 20% to 44%. One further study of 10,000 remote workers at an Asian technology company saw a 30% in total hours worked compared to pre-pandemic, including an 18% increase in working outside regular hours.

Similar stories about the rise in extra hours and unpaid overtime have surfaced in dozens of other countries. Could it be the case that, everywhere mass remote working has been adopted, it’s led to an increase in working hours and an erosion of work/life balance?

Last year, a prominent think-tank claimed that working from home during Covid had caused an ‘epidemic of hidden overtime’ in the UK.

France’s original ‘right to disconnect’ legislation, which gave employees the legal right to avoid work emails outside working hours, came into effect back in 2017. It was the first example of a Government deciding to oppose the propagation of an always-on corporate mentality and culture. Portugal’s recent laws should be viewed in this context, not as a shift in power dynamic, but as a bold attempt to correct a longstanding structural failing.

The question of overtime can no longer be ignored

Of course, the big risk when individual countries feel obliged to act on issues such as unpaid overtime is that the baby gets thrown out with the bathwater.

There is nothing inherently unethical or undesirable about overtime. On the contrary, employees may crave the opportunity to take on additional work or go the extra mile on projects that are close to their hearts. Likewise, certain calendar moments inevitably cause workload spikes, depending on the nature of the business – an eCommerce provider preparing for Black Friday or a pharma company gearing up for a regulatory submission.

However, regardless of the circumstances, no one should be forced to work excessive overtime, and committed team members should be fairly remunerated for their efforts. And what’s been evident throughout the pandemic is that there is not usually a reliable mechanism for remote workers to time-track how much overtime they’re doing, nor is there any agreed means of compensating them.

Portugal’s decision to make it illegal for employers to contact workers outside of their agreed working hours, tipping the balance of power away from employers

The global picture around overtime and time-tracking is extremely fragmented. In the UK, for example, employers do not have to pay workers for the extra hours worked, as long as it is made clear in their working agreement. In Brazil, where there are some pay provisions around overtime, these do not extend to home workers. In the Netherlands, the law does not regulate overtime. Employees will not receive overtime compensation if they work without an order from their supervisor, and they have responsibility for recording their own hours.

Contrast these examples with Lithuania, where employees working beyond standard hours are legally entitled to anywhere from 150% to 250% of their regular salary. Employees cannot do more than 12 hours of overtime per seven days, and employers can be fined for failing to keep track of employees’ working time.

Global employers will be required to act first

It’s doubtful that most countries will follow in the footsteps of the generous Lithuanian model any time soon. But it’s a useful illustration of the growing issues facing global employers if they fail to establish clear, compliant overtime policies for their workers.

Suppose you’re employing remote workers in both Brazil and Lithuania. Can you justify paying Lithuanian team members for overtime – where there’s a legal obligation to do so – without also extending this benefit to your Brazilian staff?

Similarly, if you have workers in Portugal and the UK, it’s hard to instigate a blanket ban on managers messaging their Portuguese team members outside of the contracted working hours and yet allow this practice to continue elsewhere in the organisation.

What you can do today to tackle the pandemic of overtime:  ✅ Review existing overtime policies ✅ Champion paid overtime only  ✅ Create more straightforward ways for employees to track and report their time.

Once time zones get factored into the equation, things get even more complicated. In the age of Slack, WhatsApp, Teams and Trello, conversations occur 24/7 within globally dispersed teams, sending messages and tagging team members at all hours of the day and night. What happens if a US manager unwittingly copies in a Portuguese or French subordinate on a message?

Unless everyone has a clear understanding of their employer’s policy around out-of-hours working, breaches could become commonplace – a big problem in territories where there is a legal right to disconnect (and the list is growing). Violations will almost certainly lead to fines because local jurisdictions will want to show that their legislation has teeth. Just as important, employees who feel their rights are ignored are far more likely to jump ship and move elsewhere. After all, in an increasingly global, remote-first market, they can apply for a job with pretty much anyone.

Putting employees first

Achieving harmonisation around pay, remuneration and benefits for global employees is not easy. Local compliance is non-negotiable wherever a company operates, but beyond this, it might not be viable, or even appropriate, to introduce these policies for everyone, everywhere.

In Lithuania, employees working beyond standard hours are legally entitled to anywhere from 150% to 250% of their regular salary.

What’s clear though, is that if global remote working is to work equitably, profitably and sustainably in the long-term, employers need to put their employees front of mind in everything they do. You can start by:

  1. Reviewing existing overtime policies
  2. Championing paid overtime only 
  3. Creating more straightforward ways for employees to track and report their time. 

But, most crucially of all, it means breaking with the prevailing corporate philosophy of the past decade, acknowledging how unfit for purpose it has become in our new reality, and respecting employees’ right to sign out of work mode once they’re through their contracted hours.

Employ internationally with confidence

We make it our business to help companies comply with the local employment laws and working practices that exist where they have workers.Through our Employer of Record model, we help global employers go beyond the basics and adopt best-practice employment principles without the need to learn the ins and outs by themselves. So if you're looking to hire overseas, get a consultation today to hear about how you can become a leading, people-first employer with ease.

To trully tackle the problem of overtime, employers will need to break with the prevailing corporate philosophy of the past decade, acknowledging how unfit for purpose it has become in our new reality
Five stories that changed the employment landscape in 2021

The way we work is changing more rapidly than ever. In 2021, we’ve seen a slew of legal- and policy-based action from governments and businesses all over the world designed to reflect the changing nature of work, balance the competing priorities of employees and employers, and clamp down on unlawful or unethical employment practices. It’s been a busy twelve months!

So as 2021 draws to an end, we thought we’d take the opportunity to reflect on the moments that have had the greatest bearing on the global employment landscape and assess what they might mean for employment practices in the year ahead.

1) The UK proposes flexible working from day one

Following a 2019 election pledge to prioritise flexible working, in September, the UK Government announced legislation enabling employees to request the right to work at home from their first day on the job.

While it’s yet to be put before Parliament, the legislation already looks like a trailblazer for future best-practice worldwide. Being able to request home working from the get-go is particularly important to parents and carers, disabled people and individuals with work-limiting health conditions – employees that have historically been disadvantaged by a lack of workplace flexibility. And, right now, every country is looking at every other country for ways to better support the sort of full flexible working that people have come to expect since the pandemic.

When flexibility is aided by progressive legislation, it will greatly impact the wellbeing of the workforce at large, which is why the story remains one to watch as the Government’s bill is debated in the new year.

When flexibility is aided by progressive legislation, it will greatly impact the wellbeing of the workforce at large.

2) Big Tech remote working policy confusion

Midway through 2020, once it became clear that the pandemic was going to be a marathon, not a sprint, the world’s biggest tech firms led the way in turning temporary home working

measures into long-term remote working policies.

In August 2021, however, Big Tech began to change its tune. Google created a handy calculator showing remote workers how much their pay might be cut depending on their choice of location, while chief exec Sundar Pichai eulogised about the joys of seeing workers in the office. Netflix and Apple were quick to echo these sentiments, and within a few short weeks, headlines appeared suggesting that Silicon Valley wanted its in-person workforce back – worrying indeed for the thousands of employees who had already moved out of the Bay Area.

Almost six months on, and it seems as though this story is no closer to a resolution. Some people are back in the office, others are working from home, while long-term office plans do not appear to have been finalised. Big Tech, having guided the way for knowledge workers upto and including the onset of the pandemic, now seems caught between two worlds, and while there’s genuine internal division over what should happen next, many smaller tech companies are unequivocally backing the remote working revolution to try and capitalise on this indecision. 

While Big Tech seems to be caught between the in-office and fully remote worlds, smaller tech companies are unequivocally backing the remote working revolution and capitalise on this indecision.

3) Uber drivers to be treated as workers, not contractors

After a lengthy legal battle, in February 2021, the UK’s Supreme Court ruled that Uber’s drivers should be treated as ‘workers’, not independent third-party contractors, entitling them to basic employment protections such as minimum wage and holiday pay. Since the historic decision, the movement to reclassify gig economy workers has gained global momentum. The current US administration has made clear that it views these drivers as employees under US Labor Law. A Dutch judge ruled recently that its country’s Uber drivers would need to be paid according to the rules of the collective labour agreement of the taxi industry. Over in Brussels, the European Commission wants rights extended to gig workers “irrespective of the contractual designation” of their relationship with the likes of Uber.

These rulings form part of an ongoing global crackdown on the use of independent full-time contractors, a practice that is, in the majority of countries, , at best, unwise, and in many cases, illegal. Yes, it has historically been easier and cheaper to contract individuals rather than set up a local office or entity, but the evidence suggests that governments are increasingly unwilling to tolerate this scenario. Besides, with the Employer of Record model, employers now have a viable alternative that doesn’t create a mountain of administrative complexity.

As these cases continue to grab the headlines, hiring remote workers as full-time independent contractors is increasingly seen as poor employment practice, and it’s only a matter of time before it starts to impact the reputation of companies and their ability to attract talent.

After a lengthy legal battle, in February 2021, the UK’s Supreme Court ruled that Uber’s drivers should be treated as ‘workers’, not independent third-party contractors.

4) The rise (and fall) of false ‘work from anywhere’ promises

Over the course of 2021, organisations as diverse as Spotify, Shopify and Siemens attempted to reinforce their credentials as A-list employers by promoting a range of different ‘work from anywhere’ policies to their staff. Some did so quietly, while others such as Ocado Group, made very public announcements. In August, the company claimed that thousands of employees would be allowed to work overseas (for up to 30 calendar days per year).

‘Work from anywhere’ is a logical policy step for any business looking to embrace truly global employment and talent hunting. However, on closer examination, it quickly became apparent that, far from taking location out of the equation, many of these policies were based in Caveat City.

Siemens’ policy came with the caveat that this would be for an average of 2-3 days per week, “whenever reasonable and feasible”. Spotify’s small print stipulated that “we can only support remote working within the region your role is based”. Ocado’s offer of 30 days’ overseas working was markedly different from its recruitment promise that “we offer flexibility on your location”.

Overseas employment is not easy, particularly in countries where an organisation doesn’t already have an operational presence. Hence all of the above caveats.

But as the year has progressed and the global wave of employee resignations and relocations has continued, companies have started to recognise that ‘work from anywhere’ can’t just be offered as a part-time perk. Employees really do want permanent locational flexibility.

In 2022, we’re expecting to see forward-thinking employers go back to the drawing board on ‘work from anywhere’, with more adopting the Employer of Record model to finally come good on their promises.

In November 2021, the Portuguese Parliament approved new labour laws making it illegal for employers to contact workers outside of their agreed working hours.

5) The ‘right to disconnect’ takes a new twist

Finally, in November 2021, the Portuguese Parliament approved new labour laws making it illegal for employers to contact workers outside of their agreed working hours, adding a new dimension to the ‘right to disconnect’ movement that began five years ago in France. Since its introduction there, Spain, Belgium, Italy, Philippines, Argentina, and India have all followed suit, adding their own versions of “right to disconnect”.

Following the onset of the pandemic, more countries have explored to give employees a legal right to switch off work-related messages and devices outside office hours. However, in most cases to date there hasn’t been great clarity as to the consequences for employers who violated that right.

The new measures in Portugal are designed to give remote workers a healthier work-life balance. What’s most interesting about the Portuguese labour laws is the Government’s unapologetic stance that, when it comes to addressing the issue of work-life balance, mandating better employer behaviour is preferable to employee empowerment. Going forward, companies that break the rules – either by continuing out-of-hours contact or by failing to support remote workers more broadly – are likely to face fines. 

Which approach proves more effective in curbing out-of-hours contact remains to be seen. But there’s no doubt that, as remote working continues to increase, governments will come under more and more pressure to address this issue and ensure that employees feel like they’re working from home, rather than living at work.

In 2022, we’re expecting to see forward-thinking employers go back to the drawing board on ‘work from anywhere’, and figure out how fulfill their promises.

Employ internationally with confidence

At Boundless, helping companies comply with local employment laws, extend full employment rights and benefits, and meet employees’ changing priorities of where they want to live, is what we do for a living.

While 2022 will inevitably bring a raft of further changes to the employment landscape, using an Employer of Record like Boundless for your global employment needs can save you time and stress in the short-term, and give you long-term peace of mind that, wherever you operate, you’ll be a best-practice employer.

If you're ready to hire overseas and avoid running into any of these international employment issues directly, get started here.

5 stories that changed the employment landscape in 2021: The UK proposes flexible working from day one Big Tech remote working policy confusion Uber drivers to be treated as workers, not contractors The rise (and fall) of false ‘work from anywhere’ The ‘right to disconnect’ takes a new twist

As the world slowly tries to find its footing in this latest chapter of the COVID-19 story, things haven’t gone quite as planned. Many people are still reluctant to get vaccinated while breakthrough infections have been rising. Making sense of how all that impacts the world of work feels almost impossible.

Many companies have decided to never return to the office and remain fully remote. Others still entertain the possibility of at least some form of a hybrid set-up. Which decision is correct? We’ll know some time down the road — but only in hindsight. In times like these, employment and civil law can be a guiding light.

In the UK, as in most of Europe, employment regulations tend to favour the employee and their human rights. This UK guide addresses some of the most pertinent questions that both employers and employees have.

What are the latest regulations across the UK?

While restrictions have now eased in Scotland, the Scottish government is still encouraging employers to support employees to work from home where possible to control the virus. In addition, the government is encouraging employers to make the health and safety of employees returning to the office their main priority by means of applying a coordinated approach and flexible working arrangements where possible. You can find all Scottish workplace guidelines here.

The English government (contrary to Scotland) no longer instructs people to work from home. Instead, it recommends a “gradual return to work”, expecting employers to follow a range of health and safety legislation — risk assessments and corresponding set-up as well as implementation and maintenance of safe work systems. You can find more details here.

In Wales, employers’ undertaking a risk assessment and taking reasonable measures to minimise any virus spread is a prerequisite for employees to return to the office. Regulation 16 of the Health Protection (Coronavirus Restrictions) (No. 5) (Wales) imposes obligations on people responsible for premises where work takes place. For further information and specifics, check here.

In Northern Ireland (similarly to Scotland), the current guidance is to work from home where possible. You can find complete guidance here.

Employment rights legislation protects employees who refuse to go back to the office because they reasonably believe that there is a serious and imminent danger to do so.

Can employers mandate or prohibit a return to the office?

The decision on where employees should be working ultimately lies with the employer. However, that doesn’t come without certain caveats. For one, as clearly seen above, there is an utmost expectation of employers to take very serious measures in ensuring the work environment is as safe as possible.

An important consideration is, of course, the will of the employees. Employment rights legislation protects those who refuse to go back to the office because they reasonably believe that there is a serious and imminent danger to do so. The protections also apply if an employee takes appropriate steps to protect themselves or others from danger. There have now been some Employment Tribunal cases in relation to employees’ concerns about the virus and their return to office-based working. In many cases, employees have not had difficulty establishing a reasonable belief of serious or imminent danger.

There are, however, indications that a general fear of the virus may not be enough especially if the employer has followed the government’s working safety guidance. This is an evolving area. However, employees who are clinically vulnerable or share a household with someone who is clinically vulnerable are entitled to continue to work from home regardless of the measures the employer has taken.

What are the rules concerning statutory sick pay

Employees are entitled to statutory sick pay if they are required to self-isolate and cannot work as a result or if they are off ill with COVID-19, subject to standard eligibility criteria. The number of statutory sick pay entitlement days depends on the reason and the length of time employees are off work. An important differentiation from statutory sick pay for other illnesses is that employees can claim statutory sick pay for every day that they are off work self-isolating, not just every day after the three waiting days.

The eligibility for sick pay is also extended to employees suffering from the symptoms of “long COVID”, which are treated as any other illness. Employers should be mindful of the effects of long COVID and consider making reasonable adjustments to avoid any possible discrimination claim based on disability. The case law in this area is still developing.

Can employers prohibit international travel to avoid the need for employees to quarantine?

Ongoing case law deals with this matter far more than existing employment legislation does. There are still not enough cases present to indicate which way courts would go on this. The general advice still in place is to avoid international travel wherever possible.

However, if an employee chooses to ignore this advice or has good reason to travel internationally, their employer doesn’t have a right to intervene. The Human Rights Act 1998 gives everyone in the UK the right to a private and family life, and employment law is interpreted with this in mind. Ultimately, what an employee chooses to do in their personal time remains their choice, and an employer cannot seek to control or prohibit an employee’s time.

If an employee is required to self-isolate but cannot work from home, they are not entitled to statutory sick pay. However, an employer can choose to pay the employee sick pay for that duration. If an employee develops COVID-19 symptoms, they may be entitled to statutory sick pay. 

The Human Rights Act 1998 gives everyone in the UK the right to a private and family life, and employment law is interpreted with this in mind. Therefore employers cannot prohibit international travel to avoid potential need to quarantine.

Can employers insist that employees returning to the workplace are vaccinated?

Much public talk has recently focused on the considerations and process of devising policies on demanding COVID jabs (or not) for workers returning to the office. Similarly to the above point about forbidding international travel, more general civic legislation provides guidance here. For example, the Public Health (Control of Disease) Act 1984 says that individuals cannot be forced to undergo medical treatment, including getting vaccinated. Furthermore, under the General Data Protection Regulation (implemented by the Data Protection Act 2018), employees are under no obligation to reveal any part of their medical history, including their vaccination status.

Employers’ potentially mandating vaccines as a prerequisite to work involves too many risks. An employee could raise a claim of unfair dismissal (if the employer has employed them for two years or more). A fair dismissal must be “within the bounds of reasonable responses open to a reasonable employer”. A court is unlikely to accept dismissal on the grounds of no vaccination as reasonable; to rule otherwise would undermine the employee’s right to a private life under the Human Rights Act 1998.

An employee could also raise a discrimination claim (with no minimum qualifying service required). Being “anti-vax” isn’t a protected characteristic in discrimination legislation; however, disability and religious beliefs are. Therefore, people who have a disability or a religious faith could claim that they cannot be vaccinated on these grounds.

An employer imposing a vaccination policy could potentially be seen as discriminating against them on the grounds of disability/religion. For example, some vaccines contain pork gelatine to stabilise the ingredients and ensure effectiveness during the distribution process, which may deter Muslim employees. While the COVID-19 vaccines from Pfizer, Moderna, and AstraZeneca do not use pork gelatine in their formulas, not all other companies have released a list of their ingredients. ­An employee may also be unable to get vaccinated for health reasons such as a history of allergic reactions to vaccines.

The bottom line is that especially in the case of knowledge workers who have been effectively doing their work from home, there is little justification to force them to come to the office under certain conditions. 

Need help in employing people in the UK?

We hope this article has helped you with some of your questions regarding the reading of UK employment legislation and COVID. As at any point over the past 18+ months, employers should continue to keep an eye on evolving COVID-19 rules and regulations, as part of many other evolving employment matters. If you need help with that for your UK-based employees, Boundless can help. We operate an Employer of Record model and act as the legal employer of local employees, staying on top of all rules and regulations on your behalf, taking care of tax, payroll, and compliance. Learn more.

How Brexit changes UK employment regulations

It’s been a few months since the UK officially exited the EU. While many aspects of the Brexit deal are better understood now, we have a way to go to grasp the details thoroughly. One crucial topic to many companies with UK-based employees or those employing UK nationals abroad is how Brexit impacts employment. 

The good news is that while immigration and work permits for EU citizens are changing more significantly, UK employment law, which up until 31 December 2020 was based mainly on EU employment law, won’t be changing much in the foreseeable future. That stems from the fact that a fundamental condition to signing a free-from-tariffs-and-quotas Trade Deal between the UK and the EU was a promise by each to keep a level playing field regarding employment and tax policies, among others.

That said, here are some of the more pressing questions in terms of Brexit’s impact on employment.

1. Is it still possible for companies outside of the UK to employ staff in the UK?

Employment law doesn’t prevent UK citizens from being employed by companies that aren’t incorporated in the UK. However, these companies would still need to register with Her Majesty’s Revenue and Customs (“HMRC”) for their UK payroll and have employer’s liability insurance to cover their UK staff. They will also need a sponsorship licence from the Home Office and, in the case of intra-company transfer (ICT) visa route, will have to meet job suitability and minimum salary requirements. This is one of the two main “work” visa pathways alongside the “skilled” worker route. Applicants must be paid at least £41,500pa or the “going rate” for their occupation, whichever is higher. This is higher than the salary requirement under the “points based” skilled worker visa, where the tradeable salary threshold has been lowered to £26,500 or the going rate for the occupation, whichever is higher, with the further possibility of trading a lower salary against other criteria.

However, applicants may be reluctant to join a company that doesn’t have a presence in the UK. While establishing a company is one way of solving this problem, working with an Employer of Record such as Boundless is another. Boundless owns a Professional Employer Organisation in the UK, which acts as the legal employer, handling taxes, payroll, benefits, and many other aspects of employment compliance.

UK companies who want to employ EEA citizens in the EEA must comply with local laws, register as an employer locally and pay local employer taxes.

2. What are the requirements for UK companies who employ staff in a European Economic Area (“EEA”) country after Brexit? Do they need an establishment there?

The position here is essentially the same as before: UK companies who want to employ EEA citizens in the EEA must comply with the relevant country’s laws. This often means, at minimum, registering as an employer locally and paying local employer taxes; however, establishing an entity could also be required. As mentioned above, an alternative to going through the motions of establishing a presence in a new country, which is far more complex and cumbersome than you may assume, is working with an Employer of Record. Currently, Boundless is operating a Global Professional Employer Organisation with fully owned infrastructure in eight EU countries (Denmark, Estonia, France, Germany, Ireland, the Netherlands, Poland, Portugal) and five non-EU countries (Australia, Canada, New Zealand, Singapore, the UK), with many more coming soon.

Brexit puts new obligations on UK companies who want to place UK citizens in an EEA location, as both freedom of movement and the Posted Worker Directive no longer apply to UK citizens since 31 December 2020. This means that UK employers need to comply with local immigration and employment law requirements to employ UK citizens in the EEA.

As a result of Brexit, EEA citizens must prove their immigration clearance to work in the UK in the same way as non-UK and non-EEA citizens.

3. What are the requirements for a non-UK and non-EEA company to employ someone in the UK who is a (1) UK citizen, (2) EEA citizen, or (3) non-UK and non-EEA citizen?

These companies can employ a UK citizen so long as they are registered with HMRC for their UK payroll and have employer liability insurance in place. As a result of Brexit, EEA citizens must prove their immigration clearance to work in the UK in the same way as non-UK and non-EEA citizens. Employers must perform right to work checks on all applicants. This can be done remotely using an online platform for some, but not all, applicants.

If these companies want to bring an EEA or non-EEA citizen into the UK for employment there, they will need to consider immigration clearance. They will usually need to obtain a sponsorship licence from the Home Office.

Any employment in the UK will be subject to UK employment law. To understand UK employment law and regulations around taxes, benefits, remote work, leave, end of employment, and others, check out the Boundless UK country guide.

The UK has overhauled its main visa route for “skilled workers”, introducing instead a points-based system with mandatory requirements.

4. Since December 2020, what has changed for non-UK citizens who want to move to the UK for work?

The Brexit implementation period ended on 31 December 2020. As of 1 January 2021, EEA citizens must prove their immigration clearance to move to the UK for work. This brings them in line with the existing position for non-EEA citizens. Generally, this means that they need a visa to live and work in the UK. This will usually mean obtaining a certificate of sponsorship from their prospective employer as part of their visa application unless they already have permission under a family or other visa. 

EEA citizens living in the UK since before 31 December 2020 can apply for settled or pre-settled status. 

The UK has also overhauled its main visa route for “skilled workers”, introducing a points-based system. This includes mandatory requirements on job skill level and speaking English. The primary outcome for EEA citizens is that coming to the UK for “unskilled” work has become more challenging.

Irish citizens can still live and work in the UK without restriction under the Common Travel Area arrangement, which hasn’t been affected by Brexit.

Employers who don’t conduct right to work checks properly can be fined up to £20,000 for each illegal worker.

5. Are employers allowed to ask their employees such questions?

All employers have a statutory obligation to conduct right to work checks before employing an applicant in the UK. This means that employers must (1) establish an applicant’s UK citizenship or visa status during the application process and (2) monitor any changes during employment.

6. Are there penalties for employing someone who doesn’t have the right to work in the UK?

Employers who don’t conduct right to work checks properly can be fined up to £20,000 for each illegal worker. An individual who employs an illegal worker in the knowledge that they don’t have the right to work in the UK has committed a criminal offence, which can lead to imprisonment for up to five years and an unlimited fine.

While no changes have been implemented since Brexit, keeping an eye on the statutory rates for minimum wage, sick pay, maternity & paternity pay, and redundancy is recommended.

7. Will UK employment law change now that the UK has left the EU?

When the UK was in the EU, it implemented EU employment laws by passing domestic legislation in Parliament or the Northern Irish Assembly. This legislation is still on the statute books now that the UK has left the EU. However, unless it agrees otherwise, the UK won’t be bound to introduce any future EU employment laws, meaning that the UK and the EU could diverge. 

While the UK could theoretically depart from EU employment standards, this is unlikely for two main reasons. Firstly, the UK’s employment standards are generally higher than EU minimums and reductions would be unpopular within the UK. Secondly, it could contravene the UK’s agreement to maintain a “level playing field” with the EU for worker’s rights under the Free Trade Agreement. In the longer term, the UK might make changes to certain EU derived laws which have been particularly impractical or unpopular with employers, in particular the Transfer of Undertakings (Protection of Employment) Regulations.

8. What other significant changes to UK employment law should employers be aware of?

Given the COVID-19 pandemic and Brexit upheaval, major changes to employment law are unlikely in 2021. However, all UK employers should keep up to date with changes to the statutory rates for minimum wage, sick pay, maternity and paternity pay, and redundancy. One significant change (which was delayed by the pandemic last year and came into force on 6 April 2021) is the extension of the off-payroll working (“IR35”) rules to medium and large private-sector employers.

Otherwise, employment law continues to evolve through major court decisions, and employers should be mindful of the recent Supreme Court decision in the Uber case and look out for an eventual decision in the Agnew holiday pay case. Finally, Parliament is expected to consider new employment legislation in 2021, which may cover contract terms and leave for carers, and enhance pregnant employees’ redundancy rights.

Under the Free Trade Agreement with the EU, the UK is unlikely to pass any major employment law changes in order to not contravene the workers’ rights “level playing field” agreement.

Need help in employing people in the UK post-Brexit?

We hope this article has helped you with some of the questions you may have regarding UK employment post-Brexit. While the expectation is that nothing will change drastically immediately, you will have to keep an eye on new rules and regulations continuously. Alternatively, working with an Employer of Record in the UK may be worth your consideration. Boundless owns and operates a Global Professional Employer Organisation that supports the UK by having a fully owned infrastructure. (Read to learn why this is important and what else you should be looking for in an Employer of Record). Through the Employer of Record model, Boundless acts as the legal employer of local employees, staying on top of all new rules and regulations on your behalf.

How to be remote compliant in 2021

What a difference 12 months can make! Last year, we set off to write a ten-point guide on being a remote compliant company and couldn’t even imagine just how key distributed work compliance was about to become. Many workers were sent home in March 2020, and the workplace as we know it has changed forever. Employers worldwide have come to realise that their obligations extend beyond the office and that the physical place of work can be people’s homes or local co-working spaces. Many countries have updated their laws and regulations (e.g., introducing the right to disconnect, increasing health and safety obligations, and implementing various tax breaks and allowances).

Laws had started to govern work-from-home workplace safety even before remote work became so ubiquitous. Increasingly, the aim has been to avoid the same chiropractic, muscular, degenerative, visual, and auditory problems that were caused by unregulated office spaces in the 1960s. However, no one could have expected the sort of leap we have been witnessing.

The updated remote complaint in 2021 guide does not list some of the points from last year, as they haven't changed much or have become somewhat less relevant. Instead, we have added new topics such as time-tracking and the right to disconnect. To illustrate some other points mentioned last year, we have added examples from various countries. 

What you have to consider to be remote compliant: ☑ ️Occupational health and safety ☑️ Breaks and right to disconnect ☑️ Time tracking ☑️ Local employment laws ☑️ Employment contracts ☑️ Workers classification ☑️ Anti-discrimination laws in a remote work setting ☑️ Taxation ☑️ Benefits ☑️ Information security
  1. Occupational health and safety

Every country has regulations regarding what constitutes a healthy workplace. Those determine optimal office temperature, desk ergonomics, tripping hazards, dangerous equipment storage, etc. In this past year, employers have had to very quickly re-assess those in the home office context. Many countries have already had some regulations to guide them, while others have scrambled to update them. 

Some countries, such as Australia and the Netherlands, put a big responsibility on the employer to minimise risk of physical accidents and psychological trauma (e.g., three pieces of legislation govern the employment relationship between Dutch employers and their remote workers). Other countries, such as Estonia and Singapore, put a limited responsibility on employers who have remote workers, since asking for full responsibility doesn’t seem feasible. Instead, those countries' authorities focus on encouraging establishing good practices.

And then, there are countries such as Poland, where remote work legislation is in flux, as major changes are yet to happen and in the meantime employers need to decide the measures necessary depending on the specific roles and occupation of employees. 

Three pieces of legislation govern the employment relationship between Dutch employers and their remote workers.
  1. Breaks and the right to disconnect

In every country, employees have certain rights regarding their break times during work hours and between consecutive workdays. Specifics often vary — such as whether lunch breaks are included in calculating weekly hours (New Zealand, Australia, Germany) or not (Denmark, the Netherlands) — but break rights are statutory nevertheless. Employees working from their homes retain their break rights, and employers have to make sure those breaks are taken and respected. While logistically breaks are more challenging to monitor in a work from home context, break rights are increasingly safeguarded by various forms of the right to disconnect regulations.

Championed first by France in 2016, the right to disconnect very explicitly outlines when employees can be contacted and when they shouldn't be. Even before the pandemic, more countries (e.g., Italy, Spain, and Belgium) had been inspired by France and had implemented their own versions of the right to disconnect. Since the onset of the pandemic, Chile and Argentina have passed such laws, while active discussions are currently happening in the European Parliament and in many other countries. 

Employees working from their homes retain their break rights, and employers have to make sure those breaks are taken and respected.
  1. Time tracking

In many countries, employers must keep complete and accurate records of employee work hours, rest time, time off and different leaves, make these records available to employees, and also provide them to authorities if requested. The objective is (1) to monitor employees' overtime (2) to make sure they are paid accordingly and do not work beyond statutory maximum hours. This is done to protect the state of their physical and mental health. 

Authorities responsible for workplace inspections fully expect to see the same record-keeping level for both home-based and office-based employees. Many countries have non-compliance penalties for companies that don’t keep track of employee work, ranging from anywhere between €3,200 in Estonia and AU$6,300 in Australia to upper limits of €45,000 in the Netherlands and NZ$100,000 in New Zealand

Championed first by France in 2016, the right to disconnect very explicitly outlines when employees can be contacted and when they shouldn't be.
  1. Local employment laws

Each jurisdiction has precise employment laws that stipulate exactly what the rules are for employing somebody in that area. They cover both employer obligations and employee rights and extend to every employment element from various protections (through time off, work hours, and minimum wage) to redundancy and employment terminations. A distributed company with internationally remote workers needs to have a grasp on the specifics in each country. 

Ending employment is an area that is incredibly complex and where extreme caution and care are not just recommended but necessary. In most EU countries, a rigorous procedure needs to be followed. Not only is at-will employment termination impossible, but so also are dismissals based on reasons such as inadequate performance (requires a performance improvement plan), business transfer, etc. In the Netherlands, employers need to obtain permission from the Employee Insurance Agency, which, as Uber recently found out, is hard to get.

Employers are often required to keep complete and accurate records of work hours, rest time, time off of both home-based and office-based employees.
  1. Employment contracts

The purpose of an employment contract is to very specifically outline everything an employee does, including the working environment, expectations, and job regulations. Due to the fact that the place of work is included in employment contracts, when that place changes to being one’s home, all that information must be included. Implementation varies, depending on a jurisdiction. In Portugal, it warrants an additional agreement, which is valid for only three years and needs to be renewed afterwards. On the other hand, in Estonia, while there needs to be only an amendment to the contract that the employee will be working remotely, employees may work remotely within the agreed workplace region (e.g., anywhere in Tallinn). 

However, besides the address change, other things — such as performance expectations, reporting expectations, hours and many other structural aspects of the job description — may change as well. Hence, they may need to be reflected in the contracts. If an employment contract is not updated accordingly, it could be deemed void, which would mean the employee could be seen as working illegally. Arrangements need to be compliant with local regulations.

Ending employment is an area that is incredibly complex and where extreme caution and care are not just recommended but necessary.
  1. Worker classification

Anyone who has ever tried to employ a worker from a new country or jurisdiction knows just how difficult and complicated it is to comply with local rules and regulations. Therefore, many distributed companies opt to hire people as independent contractors, which solves many hurdles with international employment. However, in most countries, long-term full-time independent contractors are rarely a viable or legal solution. Governments around the world have different ways of classifying what constitutes a full-time employee. Still, they all boil down to the same idea — if a person works full time, within certain hours of the day, reports on their work throughout projects, receives a computer and other technology, they are an employee and cannot be treated as a contractor. Breaching that could have severe financial and fiduciary implications

In France, employers that misclassify employees face a fine of up to €45,000 for the company's legal representative (president or managing directors) and up to €225,000 for the company as a legal entity. Also, the employer can be imprisoned for up to three years. In Germany, employers face fines of €30,000 for each hidden personnel leasing and up to €500,000 if the company is found to have done it intentionally. (Professional employer organisations such as Boundless can help you employ your distributed workers compliantly without needing to set up anything yourself.)

If an employment contract is not updated accordingly to reflect remote work arrangements, it could be deemed void.
  1. Anti-discrimination laws in a remote work setting

Each country has a diverse set of anti-discrimination laws that employers have to abide by. Fairly common characteristics that fall under anti-discrimination laws could include race, colour, sex, sexual orientation, age, physical or mental disability, marital or relationship status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction, social origin, gender identity, intersex status or trade union membership. 

However, when it comes to remote work, understanding instances of discrimination is more difficult to grasp. There is a possible exposure to discrimination claims when some employees are granted requests to work remotely, while others are not. Cases of discrimination on promotion and career development are also possible. It’s important to proactively address criteria on how you make decisions on these themes in a work from home context as a way to minimise any risks.

In most countries, long-term full-time independent contractors are rarely a viable or legal solution for employing internationally remote employees.
  1. Taxation 

Taxes are one of the more complex areas of international employment and distributed teams. Companies must ensure compliance with the local tax regulations for every state or country where they have employees. That starts with registering for (and paying) employer taxes in every country where an employee resides. Further, each employee must be registered with the relevant tax authorities to have their local taxes deducted. This is crucial during the pandemic, as many employees have returned to their home countries for extended periods. If that period is for less than six months, no tax implications occur; however, any relocation for longer than that triggers a host of tax residency complications. 

While income tax and social security taxes are present almost everywhere, many countries have very specific taxes. In Germany and Denmark, employees may have to pay the church tax; in Portugal, employees earning more than €80,882 pay the progressive solidarity tax; in Italy, employees pay a regional tax and a town tax. If companies do not take care of all that, they could be charged with tax evasion or tax fraud. 

Companies must ensure compliance with the local tax regulations for every state or country where they have employees.
  1. Benefits 

Local benefits are derived directly from local employment law, loosely grouped into government-provided and government-mandated categories. Each local government clearly differentiates between its benefits and the ones an employer is obliged to provide. For example, in the UK and Australia, providing employer contributions to a pension scheme is mandatory. In Ireland, on the other hand, all employers with more than five employees must offer access to a pension scheme, but they don't have to make contributions. Paid time-off benefits — such as vacations, holidays, maternity/paternity leave and medical leave — are treated very differently by the U.S. compared to European countries.

What further complicates this field is the area of benefits in kind, which employers offer at their own discretion. In Australia and New Zealand, employers fully cover the tax that is due on benefits in kind. In Ireland, employees have to pay that tax but do have an initial €500 tax free allowance. Finally, in Estonia the tax is progressive and could be as high as 60%–70%, making benefits in kind to be too expensive. 

How Benefit in Kind tax varies around the world:     In Australia and New Zealand, employers fully cover the tax   In Ireland, employees pay the tax but have a €500 tax free allowance   In Estonia, the tax is progressive and could be as high as 60%–70%
  1. Information security 

Security of information needs to be maintained, even though employees work from home. Using a non-secure broadband connection at home makes remote employees an easy target to hackers looking to harvest sensitive and valuable client information. This is particularly important in EU countries governed by the General Data Protection Regulation (GDPR) and where a leak of employee or customer personal data can be a serious problem. In such instances, the company could get fined. 

At a minimum, all remote employees should be using a VPN connection when connecting to unsecured networks. In addition, to be compliant and avoid any risks, employers should (1) have data policies in place, (2) review access to internal systems, and (3) advise employees on essential updates and protections on all of their devices.

Need help with being a compliant remote employer?

We hope this updated list has helped you to further understand why being as compliant as possible will make remote work feel better for employers and employees. Becoming an effective compliant remote company may not be a unicorn kind of narrative, but it's good for business, especially in a time of a pandemic, as it puts people's well-being and safety first. 

At Boundless, we aim to help you to employ anyone anywhere in a legal and compliant way. Learn more about how we do that and which countries we can support you in.

employer of record for employees

My first job working remotely was a case of fortuitousness - I had brunch with someone visiting town and casually mentioned I was looking into making better use of my journalism degree. The day after, my brunch date ended up offering me a job for their US-based company. I didn't have to move for the job and could do it from my couch at home. However, I would have to register my own company, send an invoice once a month, and take care of my taxes. 

Back then, remote work wasn't a hot topic; no one talked about international remote employment, so I didn't question that setup for a second. Instead, I looked for a lawyer and an accountant, paid for them to do everything necessary, and kept my worries of messing up the monthly admin private. I was already anxious because the job was a big leap in my career, in a field I knew very little of. 

The worry eventually subsided, only to reappear again when I decided to take my remote job with me when I moved to Ireland. Registering a company would be much more expensive and require even more work each month, so I opted for an arguably easier setup as a sole trader. It was only later that I realised it came with a caveat - I needed to have multiple clients and issue multiple invoices instead of just one. "If you don't, the Irish government will eventually see you as an employee of the US company and may fine them for misclassifying you as a contractor and not paying their employer taxes," my Irish accountant told me. 

I never raised this issue with my "employer" and went to solve the problem myself - I started doing some freelance on the side, on top of a full-time job. Eventually, I left that job, but the experience has stayed with me and was one of the biggest drivers for me to join Boundless. 

Building an affordable solution for internationally remote employment would allow someone in my situation to say, "Hey, there is an alternative to independent contracting." Offering such a solution has become paramount during the pandemic as many people have become even more accidentally remote than me, moving back to their home countries to be close to family and weather the storm. 

In this article, I want to take you through the nuts and bolts of that solution for international employment that has what is known as an Employer of Record at its core. Whatever your circumstance, this article will help you understand what it will mean to you as an employee, how it will affect you month to month, and why it's not anything to worry about (unlike doing your own taxes). Keep in mind that different Employer of Record providers may solve this slightly differently, so the tactics you will read below are from Boundless's perspective.

Working remotely for a company in a different country, no longer needs to equal giving up an employee status in exchange for an independent contractor one. An Employer of Record can help!

What is an Employer of Record?  

Employment is a complex business (it's also completely different from managing your work and employee experience, but more on that in a minute). To employees, employment may seem relatively straightforward at the front end - sign a contract, get paid once a month, receive a payslip, take some time off when needed. Managing the back end is where the complexity begins.

I used to think that getting my salary was just a click of a bank transfer button. Since joining Boundless, I have found a new appreciation for the work that HR and payroll professionals do. People need to be paid on time, and correctly, after all! Beyond payroll, there are numerous employer obligations to keep up with, and a host of employee rights to extend and maintain. It's a lot of work, but that is why companies have HR and People departments, led by C-level executives.

When a person is being employed in a different country, this process becomes a different beast altogether. The rules, regulations, taxes, registrations and everything else change, yet the need to comply with them doesn't. Asking a small, medium and, sometimes, even an enterprise business, to go through all the motions for a couple of remote employees is unrealistic. At the outset, it seems to make complete business sense to want to skip all that and ask an employee to be an independent contractor. While it appears to be an "easy" way out, that is often an illusion. Not only is it ethically wrong to transfer all the admin burden onto workers, but it's also risky, as my Irish accountant correctly pointed out. 

Availing of an Employer of Record model is the middle ground - the company you work for does not have to labour through the motions of doing everything themselves, yet you do get the full employment you rightfully deserve. This happens through a shared responsibility for you as an employee, mandated by the agreement between two sides working together. The Employer of Record is simply an extra pair of hands in the process of employment. They own and operate a fully compliant organisation that acts as your legal local employer and takes care of everything related to your employment. It's their job to understand what it takes for you to get the employment you deserve in exchange for your full time and attention. The Employer of Record registers you with the right authorities, runs your payroll, files and pays your taxes, provides you with a payslip, etc. 

Everything related to your work and performance stays with the company you work for - they determine your projects, who you report to and how you grow in the organisation. They are responsible for your employee experience culturally; the Employer of Record is responsible for your employee experience legally. In many countries, this means guaranteed social security coverage, paid vacation, pension contributions, paid maternity/paternity leave, job protection, unemployment benefits if you lose your job, and much more. 

Availing of an Employer of Record model spares the company you work from setting up in a new country and doing everything themselves, while you still get the full employment you rightfully deserve.

What is required of me?

After your employer decides to use Boundless's services, we will invite you to our platform to create a profile and provide a few necessary personal details. You are given access to the app through your personal email. We do this purposefully, so even after you no longer work for the same company, you will still have access to your data and documents. Afterwards, you sign your employment contract, and you are good to go.

But who is my contract with?

You sign an employment contract with both Boundless and the company you work for, which is now our client. The agreement, which is compliant with local regulations and often bilingual, outlines all employment basics - your role, salary, responsibilities, statutory time off, a probation period, severance pay, notice period, etc. 

The agreement will be permanent unless the country's regulations are such that it needs to be fixed term. That doesn't mean that your employment is fixed-term; it often means that a follow-up contract will be signed after the initial fixed term expires. Regardless of the timeline, the employment contract carries all the employment rights you are entitled to and can serve any external purposes (mortgages, bank loans, rental agreements, etc.).

The company you work for is responsible for your employee experience culturally; the Employer of Record is responsible for your employee experience legally.

What happens each month?

You do your work, and Boundless carries on with all of the behind the scenes HR and tax work that would be happening anyway. Every month, our payroll team carefully calculates your gross to net salary, applying all relevant taxes and allowances, as well as anything that may have changed since the previous month. We directly pay you your net salary, and we file and pay your taxes to your country’s tax authority.

We also prepare your payslip, which you can access through the Boundless platform. It's an important document, just like your contract, which you may need for a mortgage application for example. 

Unless you live in a country where employees are expected to file their taxes at the end of the year, Boundless will file all year-end tax documents for you, just like any other employer would. 

Is my data safe?

There is a limited but legally-required amount of personal information that you need to provide to your employer so that you can be compliantly employed. As your legal employer, Boundless is responsible for collecting and storing that data. Amongst other things, this includes your name, address, date of birth, bank details, tax details, marital status (for relevant tax breaks) and your work permit/visa if you live in a country where you need one. 

You fill out the information on the app yourself (not through email, which we highly discourage, as email is not a secure form of communication). Boundless is built on AWS, all data is hosted in Ireland, and is regulated by the EU GDPR data protection.

division of responsibilities between employer of record and company

How do I request time off or get my expenses paid?

While time off is a legal right you have, granted to you through your legal employment status, requesting it is something you do with the company you work for. As our client, we advise them on the local regulations and statutory limits for all forms of leave (holiday, maternity, parental, force majeure or any other form of leave). 

From then on, the company decides whether to extend any of the periods and what the internal process for requesting time off is, which they then communicate to you. If you are unsure what the policies of the organisation you work for are, the best thing is to check the internal handbook or ask someone from the HR/People Ops department. You can also ask us, and we will be happy to advise you on the statutory terms.

Similarly, with expenses or reimbursements, this is something that you clear with the company you work for first. After they have approved that, they let us know that some costs will be added to your salary in the following month's payroll. It’s then our responsibility that the additional reimbursement sum is added to your net salary and not taxed (unless they fall under a benefit-in-kind tax regulation).

So, how do benefits work then?

You get all statutory benefits that are mandated by your government automatically. Depending on the country you reside in, that is usually a mix of social security, time off, flexible working, training, etc. 

Then there are the fringe benefits, also known as perks or benefits in kind which the company you work for extends voluntarily. These will either be provided through selected local suppliers or as a monetary stipend. You may have to choose from a pool of options or find your vendor in the latter case. For example, if the company has a well-being budget, you might use it with your choice of studios and activities. You may not realise that while the cost of benefits-in-kind is covered, you still have to pay income and other relevant taxes on it in most countries. This is the case regardless if Boundless is involved in your employment or not.

When you are employed through Boundless, you get all statutory benefits that are mandated by your government such as social security, time off, flexible working, and more.

What if the government changes any of the rules?

Year on year, many legislative and tax changes happen in every country - there may be new laws around time off, a percentage change for pension contribution or a slight increase in income tax. None of these changes are anything you should worry about - it all falls under Boundless’s responsibility to monitor and account for. 

We work with local legal experts who update us on all legislative and tax changes multiple times a year. The only changes you need to inform us of are significant life events, such as marriage, a newborn child, or something else that may impact your payroll (because of existing tax breaks or allowances).

What happens when the job ends?

That will be determined by the circumstances of the employment loss. Is it a resignation, collective or individual redundancy, or a dismissal? Employment law outlines many end-of-employment aspects, and since you are legally employed, your employment is ruled by them. For example, in Ireland, employees who are made redundant are entitled to two weeks of pay for every year of service, plus a bonus week. So if an Irish employee is made redundant, they will receive redundancy pay according to their tenure. On the other hand, if that Ireland-based employee resigns, they need to give a specific notice, again, depending on their service length. Notice periods, in fact, are something almost every country’s employment legislation has. 

Notice periods had always been part of the jobs I had held before that first remote job, so when I resigned from it, I assumed I would work one there as well. It would allow me to finish up on my projects and say goodbye to collaborators I had worked with. What I learned instead is that when your working relationship comes with a contractor status, all assumptions fly out the window. My boss accepted my resignation, declaring that my "employment" was ending from the next day. He was within his own rights to do so; I was, after all, an independent contractor, besides, US employment law allows at-will employment. The mismatch in expectations left me without a steady income at the flick of a switch. Even if I wanted to, I couldn't apply for unemployment benefits, since I hadn't been properly employed. This should never be a place anyone finds themselves in. 

When employing someone in a different country, the rules, regulations, taxes, registrations and everything else change, yet the need to comply with them doesn't.

Want to ask anything more?

While I hope this has covered some of the basics and most common concerns of what the Employer of Record experience would be like for you as an employee, you may have further questions. If you do, feel free to reach out on Twitter or send us an email to ask@boundlesshq.com. If you feel confident in the setup and would like to explore the possibility of being employed this way, you can send this email to your boss and let them know that independent contracting isn't the only way.

UK benefits package

Update: Since publication, we have put all three articles on UK benefits in a downloadable ebook and have added the full stories of four companies we spoke to about how they approach their benefits program. Grab it here.

Building a UK employee benefits package from scratch can feel quite daunting. As we outlined in the first and second parts of this collaboration series between Boundless and Ben, when there are so many options as well as tax implications to consider, creating the perfect set up can feel like a real mountain to climb. 

After statutory benefits have been sorted, the fun part of deciding which additional benefits and perks to add begins. You will have to determine which benefits in kind and perks will have the highest return on investment whilst enhancing the employee experience and company culture. Given the times we are living in, emphasising your employees' health and wellbeing is a great starting point. But what else, beyond that, should you prioritise?

In this third and final part to our UK benefits guide, we offer you a framework to help you to decide. Weaved into it are real-world examples from four companies whom we interviewed and who are at different stages of the process. Keeping an eye on what other companies who are like you are doing will not only inspire you but give you a realistic outlook on how to remain competitive in the market. Let's dive in.

how to figure out a UK benefit strategy

In the starting blocks of your UK benefits package

The companies we spoke with were chosen intentionally to be at different stages in terms of team size, fundraising, and company maturity. As a result they are all at various points of their benefits strategy journey. Dataswift is an early-stage startup, Beamery is a B2B scaleup, Trouva is an ecommerce scale-up, and Formidable is an established consultancy.

Regardless of where you are on your journey, a great place to start is by revisiting your company values. Thinking about what culture you want to create begins with the ethos of your business. 

One of our interviewees, Sinead Daly, Employee Experience Lead at Beamery, offered a great example of tying together values and benefits. One of the company's values is "start with why," which is all about curiosity, digging deep, and putting customers first. To feed the curiosity, the company recently started giving a Kindle to every employee. 

However, the scale-up does not stop at simply handing people Kindles, they also work to activate their usage. The company has launched its first of many book clubs, which stimulates the use of the Kindles and creates a community of curious readers. "This turns the Kindle from being a perk to being an enriching experience for everyone," Sinead says. Unsurprisingly, the Kindles are already one of the favourite perks on offer.

The next step in figuring out your benefit offering is to take into consideration the roadmap of the business. Part of the planning process is gauging what milestones are likely to occur over the next 12 months from investment to recruitment, locally and remotely, and expansion into other markets.

If you are a scaling business in particular, think about how much time and resources that the implementation and ongoing management of your benefits strategy are likely to consume. As an Employee Experience Lead, a large part of Sinead's time is taken up by sorting benefits.

Offering a new employee benefit, especially one that the business has to pay for, can be risky. A selection that doesn't resonate with employees will result in a loss of time and resources. It also remains that once you offer a benefit, you want to avoid having to take it away later down the line because some employees will feel bereft of it then! Tying your strategy back to your business fundamentals will help. 

start with your values

Deciding which lane to take

Deciding which avenue or multiple avenues of benefits to pursue ultimately depends on several factors, including the size and budget of your company (we offer a sample budget later in this article), as well as the location of your company. 

A helpful guide for determining the pool of options include these categories which Ben use for customers:

Beamery takes this a step further, by thinking of its benefits not simply as what they are but as what they enable people to do. According to Sinead, this represents a more holistic approach as it looks at benefits in terms of what needs and essential parts of the employee's life they contribute to, rather than just a list. Their five distinct pillars are:

Another great way in finding out what choice to make is to ask people what they want. Many companies can assist with in-depth feedback surveys but a simple form, distributed regularly, will help you keep tabs on the evolving needs of your people. Sometimes, however, simply asking people what they need can be a great starting point.

That is precisely what Brooke Paske, Director of Operations at Formidable did at the onset of the pandemic as the lockdown was imposed in the countries where the company has offices. While the consultancy already had a great benefits and perks package, she knew she had to make sure things were relevant for the current environment. "Be honest and tell us about anything that could make your life better. We may not be able to say yes to everything, but if we can make your lives a little better during this tough time, we want to try," she said to everyone. 

To everyone’s all round pleasant surprise, Formidable’s existing offering was already helpful in a lot of ways when the going got tough. For some employees, this came in the form of things like private medical insurance and dental cover, while for others, having flexibility with their time to do things like homeschool their children was a real bonus.  

When asked that very same question further along the line in lockdown, social connection came up as the highest on the list. More regular virtual get-togethers, happy hours, yoga sessions and similar online happenings are some of the benefits that have been put in place to help to continue the strong people-first culture built before lockdown.

As with many things these days, when making any business decisions, it's important to look at the data, in particular at company demographics. Looking at employees’ age, roles, salary, location etc. will give you a great picture of the needs of your people.

That is exactly what Chloe Bartle, People and Culture Partner at Trouva did when the time came to go beyond statutory benefits. Many of Trouva's employees are women in their late twenties and early thirties. That's why it made sense to review the existing parental leave and increase it. With the demographic in mind, they did a complete overhaul of both the maternity and paternity policies allowing for more paid time off. 

Knowing your people and their habits and needs can help educate the choices you make about perks. If for example, the majority of your team are millennials, working in high pressure, commission-based, sales roles in London, mental health support and gym subsidies will make far more sense over income protection or a car allowance.

choosing a new benefit to offer

Going the extra mile

Even when budgets are restricted, a little creative thinking can go a long way, especially in the current climate. 

A post-seed funding startup, Dataswift, was used to operating under constraints even before Covid-19 took flight. As a distributed startup, the "onsites" that allowed remote-working team members to connect every two months had been a favoured benefit. Likewise, so had been the perks of coming together in the London office for those who worked there. As travel became restricted and the office in London was forced to close, both benefits lost their allure for the foreseeable future. Phoebe Yiin, its Head of Operations, wondered what they could be replaced with.

Initially, Phoebe turned to supporting the mental health of employees. She knew Covid-19 was causing anxiety and stress for many, so she introduced Spill, a tool that promotes mental health and added two mental health days a month.

The constraints of an early-stage startup required her to carefully determine what would be of most value and have the best uptake. She started with time off, as this benefit did not come with added financial pressure. Paid time off was increased to 38 days regardless of employee location. On top of that, Dataswift introduced two paid and three unpaid volunteering days and a sabbatical week every two years.

The difficulty of transitioning perks from the office to the home is something that each of the four companies experienced. They have each had to think outside the box and look at new ways to perk up people, which doesn't involve great coffee, healthy office snacks or drinks on a Friday. 

As you will see below when we list all of their packages, the companies and their People Ops experts have turned to a variety of solutions that would fit a variety of budgets: virtual social activities, access to meditation and mental health support tools, financial wellbeing, more paid time off. 

To get additional inspiration, keep an eye on the different technologies available on the market. Wellness technology is one of the fastest-growing spaces, particularly in the area of mental health. Great examples include Babylon Health for online GP consultations, FiiT for online exercise classes and Nudge for financial education. 

That said, it's also important to remember that at times the best return on investment is focusing on making the most of existing perks over adding more. This is something that Chloe has been doing at Trouva. Partly because historically people haven't always availed of the existing benefits, and partly due to a decision to wait out to see how the next months of the pandemic go before committing to any significant benefits overhaul, this has been the most sensible thing to do. 

"We have realised just how important the micro-moments happening in the office are and would like to return to them as soon as it becomes safe to do so," Chloe says. While Trouva has added budgets for virtual team socials for employees, Chloe is focused on looking at what there is already in place through providers such as Perkbox and Ben and reminding people about it. 

The power of endurance

Building a successful benefits strategy is an ongoing process of review, renew and refresh. Once you have rolled out a selection of benefits, make sure to keep a tab on the engagement levels - the results might surprise you! It will give you a great indication of where to allocate more resources in the future. 

As Trouva's example shows, the communication of benefits is a considerable part of an effective benefits strategy. All too often, employees are unaware, forget or just don't understand what it is that's on offer to them. 

According to Sinead from Beamery, you have to take the time to educate people on why perks and benefits exist in the first place and reassure them it is okay to use them. This has to happen continuously, not just at the time of onboarding, which is the sort of employee experience future that Beamery is working towards. Employees are just as prone to choice paralysis when it comes to benefits, as the PeopeOps partners deciding what those benefits should be in the first place.

From email and Slack, through the company drive, all the way to one-to-ones with the line manager, use all channels available to communicate the offering. A little nudge here and there can go a long way. 

People also love hearing about the experiences and recommendations of their peers. Beamery makes the most of that when it comes to their home office stipends. The company has a designated Slack channel, where people can share what home office setups they have, post pictures of the gear they bought, and rate and review it. In a way, the public channel gives permission to people to make the most of the subsidy but also creates a connection between them.

Another effective way to stimulate the use of benefits and connect people through them is to have a Wellbeing Champion in the organisation - someone dedicated to supporting teams using the benefits available. This person doesn't necessarily have to be in HR but could be one (or a few selected people) across the company that takes company wellbeing under their wing. 

As you start developing a more comprehensive benefits package, you could also look at streamlining delivery through brokers and benefits experts who have the expertise to obtain preferential rates and have the expertise to tell you what's hot in the world of employee benefits. 

hw to categorise benefits

Reaching the finish line

The creation of a successful benefits program never really reaches an endpoint; instead, it's an ever-evolving space with new challenges and opportunities that grow alongside the development of the business and the world around us. 

For reference, these are the current benefit packages of the four organisations we spoke to (we have omitted some of the things that are not currently relevant due to the pandemic):

Dataswift

Share options, expanded annual leave, remote working (for office staff), company socials, volunteering days, Spill, mental health days, sabbaticals.

Beamery

Expanded maternity leave, wellbeing days, volunteering days, pension, medical benefits, share options, allowances and subsidies (for L&D, health and wellbeing, home office setup), cycle to work, Kindles, gifts on employee birthdays

Trouva

Expanded maternity/paternity leave, expanded fully paid sick leave, share options, employee discounts, cycle to work, office snacks, expanded annual leave and remote working for office-based staff.

Formidable

Expanded maternity/paternity coverage, pension, financial wellbeing, medical benefits, protection & group risk, allowances and subsidies (L&D, health, food, remote working), childcare, cycle to work, season ticket loan, rewards for work on Open Source Software projectscharitable giving, company socials.

Given the changing world we are living in, all four of the companies are in a state of transition and their packages will surely evolve. As they work to meet the most urgent needs of their employees and harmonise experiences across borders, they all speak of bringing in more flexibility. Instead of offering a list of benefits, they dabble with consolidating budgets, switching offers to a pot of money or a token system, all in the aim of leaving people to decide for themselves what matters most. While the future may be uncertain, putting thought and consideration into creating and evolving the benefits offering is the best approach to determining the right way forward.

UK benefits package budget 

To come up with the final package, you will also have to take into consideration the costs to the company and the tax implication on the take-home pay for employees.

We have created an estimated benefits package budget per employee. We have based this on a combination of what employees currently want most as well as what companies are most keen to offer. 

We then add three separate calculations: 

For the calculation, we are assuming the benefactor is a single employee, 35 years of age, with no dependents and not living in Scotland.

employee salary calculation UK
cost to UK local employer
employment costs through Boundless

Conclusion

We hope this and the previous two articles have helped you to get the full lowdown on benefits in the UK, including how to create your own package. If you need any further help with a bespoke package, reach out to Ben. If you need to understand more of the UK's employment legislation, have a look at our comprehensive UK Country Guide. If you are not HQed in the UK but have workers there and want to offer them a fully compliant and fair employment experience, Boundless can help.

work from home guide Ireland

Whether we call it remote working, work from anywhere, or more simply, work from home, the move away from the office as the primary place for labour is here to stay. For that reason, it’s more important than ever to focus on making it an effective and streamlined model of working. 

We have written about some of the people management aspects of it before: the importance of keeping contact with employees, offering an abundance of support, and promoting proper disconnect. However, there is also the more operational side of things, especially when the workers are internationally remote: understanding and complying with local regulations, complying with Health & Safety rules from a distance, keeping track of all existing WFH tax breaks and allowances, and many others. 

It’s those operational things that we devote our local work from home guides to. For this guide to Ireland, we have gathered all the rules and regulations employers and employees need to comply with, and compiled the latest tax breaks and allowances that are in place. (You can read about all other employment, payroll, tax and legal regulations in our comprehensive Ireland country guide).

The work from home landscape in Ireland

Even before Covid-19, Ireland was on a path to becoming a more remote work-friendly location. It needed to as big cities are overpopulated and unaffordable. According to the latest Census, which took place in 2016, 18% of the working population, worked from home, mostly one or two days per week. Several things have been happening since to make the country better equipped for remote work.

For starters, over the last number of years, there has been an increase in co-working hubs in rural areas, which are currently at nearly 300 in number. Meanwhile, broadband, which has historically been a problem in remote areas, has been improving. Large scale stories of remote work success have surfaced such as Shopify Ireland, which has been fully remote since 2015. (We spoke to John Riordan at the start of the year, who is the engine behind the scale to nearly 400 employees.) Last and not least, there is Grow Remote, a grassroots organisation that started in 2018 as a WhatsApp group between remote people across Ireland, which has since grown to an organisation with over 60 chapters spread around the country, most of which operate monthly in-person events under normal circumstances.

As a result of all these things, the Department of Business, Enterprise and Innovation published a Remote Work in Ireland report in December 2019. It uncovered different remote working practices in Ireland, how often people practised them, and discovered some of the factors which determined whether people worked remotely or not. 

rise of Ireland as remote-friendly place

Much has changed since it was published and follow up surveys have ensued. The most recent one from October 2020 found that 94% of respondents were in favour of continuing to work remotely. The majority of those, 54%, said they would like to work remotely several times a week, 27% said five days a week. The last number is double what it was in the original Remote Work in Ireland study. 

Many initiatives have been put in place in the months since the pandemic, starting with several training programs:

All these initiatives, alongside spectacular nature and an inherent knack for community and readiness to help out even from a distance, make Ireland a great place for remote work. Let’s look into what is required from employees and employers to make it work.

Work from home health and safety

The Health and Safety Authority (HSA) is the body responsible for health and safety in the workplace in Ireland. According to the HSA, employers have the same responsibility for the health & safety of employees who work from home. This includes psychosocial aspects of work, such as bullying and work-related stress. Their duties include:

Employees, on the other hand, are also responsible for taking care of themselves. Their responsibilities include:

remote employer duties in Ireland

People working from home may feel reluctant to tell their employer that they are unwell. It is important to note that the same sick leave rules apply.

Working conditions

Employers have to carry out a risk assessment for the home office of employees, which includes all hazards and identify what steps they need to take to deal with them.

In a work from home context, some of the biggest risks are less to do with the setup and more to do with isolation, working longer hours, and blurring the lines between work and family life. Individually or in combination, these could result in employee burnout. Extending support to employees at all times during working hours is essential.

Employers should consider:

work from home risk assessment

Workspace guidelines

Employers should provide appropriate work from home equipment to employees. This includes laptop, mouse, monitor, keyboard and headset. In addition, employers are advised to take care of the home office furniture such as ergonomic desk and chair, and consider covering expenses for telephone, mobile, broadband, software and any other items necessary for doing the work. When these are predominantly used for professional purposes, they do not trigger benefit in kind taxation.

Sharing a Work from Home questionnaire with the employee is an excellent start before arranging to provide the above. Questions to ask include:

work from home Ireland questionnaire

Security of information

The Irish National Cyber Security Centre has released the Cyber Security Guidance on Working from Home, which provides information on how to avoid some of the most common data breaches to employees working from home. It identifies phishing, vishing, remote access threats and business email compromise as the key challenges when working remotely. The guidance contains advice on how employees working from home can maximise wi-fi security, good practices when using personal or work devices, and remote conferencing.

How work from home is treated in Ireland during Covid-19

Since Covid-19 changed the trajectory of remote working from something that some of the more progressive companies implemented, to a recommendation made out to even the most reluctant employers, the government has put in place new tax breaks and allowances and strengthened existing ones. 

eWorking covered by employer

eWorking is a tax-relief initiative by the Irish government for employers with employees working from home on a part-time or full-time basis. Employers may pay up to €3.20 per employee, per day without deducting taxes (PAYE, PRSI, USC). Any amount over the €3.20 per day that is paid by the employer will be taxed. This tax relief is aimed at covering the additional costs of working from home, such as light and heat, incurred by employees. Employers must retain records of the payments. 

Alternative tax deductions

When the employer does not contribute to the expenses that the employee has, the worker can claim a tax deduction for utility expenses such as heat and light. They are as follows:

eworking allowance

Conclusion

We hope this guide to WFH in Ireland has helped you to understand the lay of the land and the things you will need to comply with if you have an Irish-based employee. Alongside work from home regulations in Ireland, you will also have to comply with all other employment laws, run the local payroll and file taxes. You can read about all those in our comprehensive Ireland country guide. Setting all that up and maintaining it may take upwards of six months and will require a lot of resources. 

Alternatively, you can work with Boundless, to help you with all the work related to legal employment. We own and operate an Irish Professional Employer Organisation as part of our multi-country offering and enable you to offer the best possible employment experience to any worker. Through the Employer of Record model, we act as their legal employer and take care of the many obligations that bring equal, fair and secure employment to them and peace of mind to you. Learn more.

benefits in kind in the UK taxation

Update: Since publication, we have put all three articles on UK benefits in a downloadable ebook and have added the full stories of four companies we spoke to about how they approach their benefits program. Grab it here.

As we pointed out in the first part of this guide to benefits in the UK, the question of What benefits should I be offering to attract and retain employees?" is top of mind to many employers across the world. We teamed up with Ben, a UK-base benefits provider to give you the answer when it comes to the UK. In the first part of our guide, we talked about statutory benefits and the shift towards certain benefits and perks, since the onset of the pandemic. In the second part, we get into the nitty-gritty of how all these much-needed benefits are taxed. We add to that information on pre-existing allowances and tax breaks, as well as newly introduced ones due to Covid-19. (Read the third part of the guide).

How taxation of benefits works in the UK

When we talk about benefits, it's important to make a distinction between those which are simply a top-up of statutory benefits such as additional vacation days or extra parental leave and perks that have a monetary value. The former are not taxed any differently or additionally to regular income because additional leave doesn't increase the gross pay. Perks, also known as benefits in kind, on the other hand, represent extra taxable income and often require additional taxation. 

When they do, employees pay income tax on them, and they are indicated on the payslip. In most cases, the full or partial monetary value of the benefit in kind is "added" to the salary, and the total is taxed according to UK employment tax laws.

tax free benefits according to the HMRC

Employers need to present to HM Revenue & Customs (HMRC) a declaration with details of any benefits in kind given to each employee through the P11Db form, which lists the benefits and expenses eligible to pay the Class 1A National Insurance Contributions for the relevant tax year. The HMRC then calculates the Class 1A NIC contributions that the employer needs to bear on these amounts. 

If the employer doesn't include the benefit in kind in the employee’s payroll, the employee should tell HMRC about any benefits they or their family start or stop getting from work - even if their employer has already taken Income Tax and National Insurance for them.

You can read more about taxation of benefits in kind around the world here.

Existing tax breaks and allowances for benefits in the UK 

All that said, there are provisions for some benefits in kind to be either fully or partially exempt from tax. The HMRC treats the following benefits in kind as tax-free:

what benefit is taxed and what isn't

Beyond these tax breaks, a benefit in kind is considered 'trivial' and is not taxed if it's all the following:

There is no limit to the amount of total trivial benefits an employee could receive, excluding directors of closed companies - which is capped at £300 per year.

Remote work allowances and breaks

Since the onset of the Covid-19 pandemic, the UK government has made additional provisions for benefit allowances and breaks. They are the following:

  1. Since 6th April employees can claim £6 per week for working from home expenses, which the employers can cover tax-free. If the employer covers any costs over that limit, they will need to prove that the payments are no more than the employee's additional household expenses. 
  2. Any equipment, services, and supplies that employees receive from their employer is not subject to reporting or additional tax, as long as they are only using it for business purposes, and any private use is insignificant.
  3. In case the employer is not covering the expenses for the home office equipment, the employee can receive tax relief, as long as it is "wholly, exclusively and necessarily in the performance of the duties of their employment."
  4. If the employee needs a broadband internet connection to work from home but does not have one, the employer can reimburse the broadband fee tax-free. Private use of broadband must be limited.
  5. The restriction on the use of work mobile phones for personal reasons has been lifted. One phone and SIM card per employee are allowed.
expenses due to working from home

A note on Christmas 2020: While Christmas parties will most likely not be taking place this year, as the legislation currently is, there won't be a possibility for employers to repurpose the £150 as another tax-free benefit in kind related to Christmas. That's because the annual function exemption only applies if all employees are invited, and HMRC has not relaxed that requirement. What employers could do is utilise the "trivial" benefit in kind and provide something relating to Christmas that costs up to £50 in value.

Can UK employers cover the benefit in kind tax?

You may be wondering whether, beyond tax exemptions, there is a way to spare employees from having to sacrifice parts of their salary over receiving a benefit. While the tax will always need to be paid, there are ways that an employer can cover it.

It's through a mechanism called "gross-up." It's applied by taking the value of the benefit in kind, calculating the impact it will have on the net pay, and adding it to the salary of the employee to cover the difference.

To gross-up a benefit's amount, the employer would need to:

  1. Calculate how much the net payment in the payslip would have been without the benefit
  2. Recalculate the payslip, including the value of the benefit
  3. Add the amount of tax the employee would be charged for the value of the benefit to their gross salary (i.e. by using a bonus wage-type). 
Christmas benefits

Conclusion

We hope this second instalment of the Boundless and Ben guide to UK benefits has further helped you in figuring out how to start creating or rethinking the package you offer to employees. In the third part of the guide, we provide you with the tools to build your bespoke benefits package with confidence, providing real-world examples from four companies. 

If you need to understand more of the UK's employment legislation, have a look at our comprehensive UK Country Guide. If you need help with employing UK-based workers legally and compliantly Boundless can help. If you want to create a personalised employee experience through benefits, Ben can help.

guide to benefits in the UK

Update: Since publication, we have put all three articles on UK benefits in a downloadable ebook and have added the full stories of four companies we spoke to about how they approach their benefits program. Grab it here.

A constant question on every employer’s mind is “What benefits should I be offering to attract and retain employees?”. This is no less a relevant question right now, with all the uncertainty in the world. With the advice in the UK continuing to be for everyone who can to work from home, professional and personal lives are blurred, causing increased fears of burnout. To manage employee anxiety, employers search for the right mix of benefits that may help employees cope and be motivated.  

There is no easy answer to figuring out what benefits UK employers should be offering. It will depend on what is important to you, what your budget is, what matters to your people and what is proven to help right now. If you have the answers to all of these questions, you will be in a better position to find the right solution for you.

Boundless and Ben, a UK-based Benefits provider, are teaming up to give you everything that we collectively know about UK benefits and to create a comprehensive guide for you. 

The guide is split into three parts. The first one, which you will read in this post, will go in-depth about the statutory benefits which UK employees get by default, explain how some employers augment those, and bring fresh data on the most common benefits-in-kind that employers are extending due to the pandemic. (Read the second and third parts).

Let's get straight into it.

Statutory benefits in the UK

There are a variety of mandatory benefits that UK employees are granted as an employee right. Many of them have to do with various forms of time off: from holiday and parenting to sickness and bereavement. There are two parts to any leave benefit - the entitlement in terms of time itself and the pay (or lack thereof) during this period. Beyond time off, two other notable statutory benefits are pension contributions and the ability to request flexible working. Below is a quick overview of each.

Holiday Entitlement

Employees in the UK are legally entitled to 5.6 weeks' paid holiday per year (28 days for an employee working 5 or 6 days a week). The employer can include bank holidays as part of statutory annual leave. The employer must pay for holidays that are not taken. Workers have the right to accrue leave during maternity, paternity, adoption leave or while sick. Pay in lieu of holiday can only be paid when an employment contract is terminated. 

The holiday entitlement is comprised of two elements:

1. 4 weeks as defined by European legislation (and known as Euro leave), which even though the UK is leaving the EU has become part of the legislation and cannot be changed

2. 1.6 weeks as defined by domestic UK legislation

One thing, which is important to understand is that public holidays (varying from 8 and 10 in the UK) are not necessarily paid and falls within the employer to decide whether to do it or not.

How do great employers enhance this?

At a minimum, great employers throw in a few extra paid days off and also offer pay for bank holidays. They also provide the option to buy and sell additional days off. Many would also offer unlimited time off.

mandatory benefits in the UK

Sick time off and pay

Statutory sick pay is available from the 4th day of sickness up to 28 weeks. Most employees are entitled to £95.85 a week from the government, paid at a daily rate. Employees have to provide a doctor's note after seven days.

Any statutory holiday entitlement that is not used because of illness can be carried over into the next leave year. If the employee is ill just before or during their holiday, they can take it as sick leave instead.

How do great employers enhance this?

Most companies provide a wider coverage of sickness payment through sickness & disability (directly or through the income protection insurance) both in terms of pay as well as time off allowed.  

Maternity Time off and Pay

Employees are entitled to 52 week's statutory maternity leave regardless of their length of service. Those are split into three distinct periods:

1. Compulsory maternity leave - the two weeks following the baby's birth

2. Ordinary maternity leave - the first 26 weeks

3. Additional maternity leave - the last 26 weeks

Women do not have to take the whole 52 weeks but can choose to "share" this with their partner. But they must take the compulsory maternity leave.

Employees are entitled to take the leave regardless of the length of service. However, to be allowed maternity pay, an employee must reach 26 weeks of employment by 15 weeks before the expected week of childbirth. Statutory maternity leave is paid up to 39 weeks. Employees get 90% of their average weekly earnings before tax for the first six weeks and then either £148.68 or 90% of their average weekly earnings (whichever is lower) for the next 33 weeks.

How do great employers enhance this?

As maternity is such a big part of an employee's life, many companies put together Maternity policies that may include up to 35 fully paid weeks, including time for IVF treatments, breastfeeding support by covering devices, flexible (reduced hours) reintegration, and others.

Adoption Time Off and Pay

All employees are entitled to 52 week's Statutory Adoption Leave regardless of their length of service. This is split into two types:

1. Ordinary Adoption Leave - the first 26 weeks

2. Additional Adoption Leave - the last 26 weeks 

The primary adopter does not have to take the whole 52 weeks but can choose to "share" this with their partner.

The qualifying conditions for adoption pay mirror those for Maternity pay. Employees are entitled to take the leave regardless of the length of service. Statutory adoption leave is paid up to 39 weeks. Employees get 90% of their average weekly earnings before tax for the first six weeks and then either £148.68 or 90% of their average weekly earnings (whichever is lower) for the next 33 weeks.

How do great employers enhance this?

Adoption, similarly to maternity, is such a big part of an employee's life, that many companies top up the statutory benefit by offering up to 35 fully paid weeks, flexible (reduced hours) reintegration, and others.

Paternity Time Off and Pay

Employees are entitled to 1 or 2 consecutive weeks' paid paternity leave. This applies when the qualifying partner in maternity and adoption cases may be able to take leave and pay. Paternity leave cannot start before a child's birth or placement for adoption and must finish within 56 days of delivery or adoption. The partner must satisfy three qualifying conditions:

1. 26 week's continuous service

2. Provide the correct notice to the employer

3. Remain an employee until the start of paternity leave

Employees get the same amount of time off regardless of the number of children being born or adopted at that time. 

Statutory paternity leave is £148.68 or 90% of average weekly wage (whichever is lower). Tax and National Insurance will be deducted.

How do great employers enhance this?

Competitive employers in the knowledge work space offer up to 3 months of fully paid leave with the most typical being 2-4 weeks.

Parental leave

Employees are entitled to 18 weeks' unpaid leave for each child, up to their 18th birthday. A parent can take up to 4 weeks of parental leave for each child.

Employees must take the leave as a whole week. Parental leave applies to each child, not to an individual's job. To be eligible for parental leave, employees need to have been in the company for more than a year. Employees must give 21 days' notice before starting the leave.

Employment rights are protected during parental leave when employees need to spend more time with their kids, look at new schools, visit grandparents and settle children into new childcare arrangements.

How do great employers enhance this?

Great employers either pay for the statutory leave of 18 weeks or offer unlimited paid parental leave. 

statutory leave in the UK

Pension

A pension is designed to fund an employee's retirement. Most annuities are 'defined contribution' pensions, which means that an employee and their employer each regularly put a set amount of money into the pension account. The value of the retirement when the employee retires depends on how much they've put into it and how the funds perform. 

Employers are required to establish a "qualifying" pension scheme and enrol employees automatically. There is a total minimum contribution rate, often split between the employer and the worker. The employer has to contribute a minimum of 3%, and the employee has to contribute a minimum of 5%. There is tax relief for both employer and employee on the amounts they give. The current lifetime allowance stands at £1,073,100, while the annual one is £40,000. 

How do great employers enhance this?

The way great employers help their employees is by adding more than the statutory minimum of 3%. A good practice is to have an employer contribution that is double of what the employee contributes. On average great employers contribute around 10% of the employee's salary, which brings the total contribution at about 15%.

Flexible working

A fundamental employee right and a statutory benefit to all is the ability to request flexible working. An employee can request after they have been with the same employer for 26 weeks. Flexible working includes job sharing, working from home, part-time, flex time and compressed hours, staggered hours, and annualised hours. 

After the request has been made, employers have three months to review it and give their decision. In that time, they can assess the advantages and disadvantages of the employee working flexibly, have ongoing discussions, and offer an appeal process. An employer can refuse the request only if they have a good business reason to do so.

How do great employers enhance this?

Some great employers would allow for part-time or full-time work from home and also operate flexible work hours with only a few core hours when employees are expected to be online. 

How are UK companies changing their benefits in response to COVID-19 

Beyond the statutory benefits, there are many non-mandatory benefits, also known as benefits in kind or fringe benefits, that employers extend to employees. Even before the onset of the pandemic, companies offered them in order to attract and retain talent.

personalised budgets

However, businesses are now repurposing benefit budgets to accommodate for the radical new way of working and inevitably for employees’ changing priorities.

The focus now is on remote-friendly options so that all employees can enjoy their benefits from home, just as much as at the office. Some companies have reallocated office supplies and furniture budgets towards work from home allowances, gym subsidies have been put towards online fitness classes, and special moments are celebrated with e-gift cards and virtual socials. Even the much loved catered lunches can reach remote workers through services like Deliveroo for Business.

Friday drinks on Zoom, remote offsites, and wellbeing allowances are just some of the innovative ways that companies have been helping their teams through the pandemic. At this point, it’s become clear that employers need to be thinking of implementing solutions that will fit the new world of work and the needs of their people for the long term. 

What the numbers are saying 

Through their unique Benefits Outlook survey, Ben has been collating data on the evolving employee benefits space, and hundreds of companies have responded so far.  The results are really insightful and give a clear indication of what benefits are taking centre stage.

As part of the analysis, company benefit strategies  were assessed against other businesses (of a similar size) and categorised as follows: 

Results show that overall, 55% of workplace benefit solutions are lagging behind the industry average and 20% offer a competitive package compared to other businesses. Very few offered a great or leading solution. Statistics like this might seem discouraging but for those engaging in a benchmarking report like this one, it’s a step in the right direction, showing that building a successful employee benefits strategy is definitely high on the agenda.

Upon assessing benefit budgets, whilst 37% of respondents said they will likely decrease their budget, a whopping 29% are going to increase spend, despite the current uncertainty.

Of those scaling back on employee benefits, 18% are getting rid of employee discounts - a natural choice considering that the recession has hit the retail sector hard and people are becoming more cautious about their spending. Following that, expanded annual leave and paternity cover are both being reconsidered with albeit a small proportion - 8% and 6% respectively - reconsidering their offerings in these areas.

The 7 key benefits

However, the inevitable cuts to employee benefits should not overshadow the positive progress that companies are making. There are seven key areas that businesses are investing resources into, including:

  1. Mental health support
  2. Remote social activities
  3. Wellbeing budgets
  4. Learning and Development budgets
  5. Flexible working options
  6. Childcare support
  7. Healthcare benefits 

Topp‍ing the list is mental health support. With cases of mental health on the increase and being one of the most significant indirect health impacts due to the pandemic, it's important for employers to take mental wellbeing seriously. Over half of the companies Ben surveyed are adding mental health support to the employee benefits agenda and there are now a host of different ways to offer support. From online counselling, time out for mental health, workshops and apps, there’s plenty that can be done to create a safe space to open the conversation and reduce stress, burnout and anxiety in the workplace. 

Fostering great company culture and keeping the community going also goes a long way to supporting mental health. Running online team events and socials that get everyone together are proving to be popular amongst employers. Arranging company activities doesn’t have to be costly either but can add so much value to employee happiness and wellbeing.

key focus areas for UK benefits

On average 32% of companies are adding personalised budgets for health and wellbeing and learning and development to the stack of benefits available. Since everybody is different, having a designated budget that allows people to spend on areas that matter most to them will undoubtedly have the most impact on the employee experience. Whether that be a yoga subscription, health supplements or upskilling in a specific software - by allocating budgets to include different products and services, businesses are likely to reap the benefits of considerable personal and professional growth. 

One thing that has become apparent during the pandemic , is that giving people the option to work how, where and when they do best makes a lot of sense, that’s why 32% of companies are embracing flexible working. As you already learned earlier, flexible working is a statutory right in the UK, however employees have to formally request it. What we are seeing is that now a huge amount of companies are implementing it proactively. Similarly, around a third of companies are offering support for extra childcare to give parents the time to rest and recharge in order to give their best to both their children and the business.

The pandemic has certainly brought a new perspective on life, specifically, on one’s health. A third of businesses have taken this on as a priority, helping their teams get better access to necessary healthcare. We’ve come a long way from private medical cover alone ticking this box - employers are stepping up and covering costs of flu jabs, online GP consultations and at home blood tests. 

To get a full overview of statutory benefits, as well as the benefits in kind that leading employers are offering in the UK, you can download this infographic by Boundless.

Conclusion

We hope this first instalment of the Boundless and Ben guide to UK benefits has already helped you in figuring out how to start creating or rethinking the package you offer to employees. In the second part of the guide, we will get into detail how all these wonderful benefits are taxed, what are some pre-existing allowances and tax breaks, and what are some newly introduced ones due to Covid-19. In the third and final instalment, we will provide you with the tools to build your bespoke benefits package with confidence.

If you need to understand more of the UK's employment legislation, have a look at our comprehensive UK Country Guide. If you need help with employing UK-based workers legally and compliantly Boundless can help. If you want to create a personalised employee experience through benefits, Ben can help.

© 2021 Boundless Technologies Limited.
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