In the global mobility landscape, managing risk is crucial for companies that send employees abroad for business trips, or workations. WorkFlex assesses these risks to ensure compliance with international and local regulations. Below is an overview of the main risk assessment dimensions we evaluate to protect both employees and employers.
1. Permanent Establishment (PE)
The risk
An employee working abroad may inadvertently trigger the Permanent Establishment (PE) rule in the destination country. This requires the company to register locally, allocate profit to the local branch, and file corporate tax returns.
The consequences
Corporate tax obligations ranging from 20% to 35% of the attributable profit.
Administrative costs exceeding €50,000.
Penalties for failure to register or file taxes on time.
Interest for late corporate tax payments.
Potential employer brand damage and non-financial consequences.
What WorkFlex does
WorkFlex assesses the likelihood that the employee’s presence abroad constitutes a PE. This evaluation considers international and local PE policies, the employee's activities, and accumulated presence in the destination country.
2. Wage Tax
The risk
An employee working abroad may trigger the obligation to calculate and remit wage tax in the destination country. This may require the company to register as an employer and establish a payroll system.
The consequences
Wage tax rates ranging from 60% to 150% (grossed-up).
Administrative costs exceeding €5,000.
Penalties for failure to register or file taxes on time.
Interest for late tax remittance.
Potential employer brand damage and non-financial consequences.
What WorkFlex does
WorkFlex evaluates the likelihood of wage tax obligations based on local treaties and legislation. The assessment takes into account the outcome of the Permanent Establishment (PE) sub-assessment and the employee’s center of vital interests.
3. Social Security
The risk
An employee working abroad could become subject to social security in the destination country, which may result in losing coverage from their home country.
The consequences
Social security contributions ranging from €5,000 to €15,000 per year.
Administrative costs exceeding €5,000.
Penalties for failure to register or file contributions on time.
Interest for late social security payments.
Potential employer brand damage and non-financial consequences.
What WorkFlex does
WorkFlex checks if a social security treaty is in place between the home and destination countries. If a treaty exists, we request a social security certificate. Otherwise, we analyze the risk of the employee becoming covered by the destination country’s social security system.
4. Labour Law
The risk
Local labour law may apply to an employee's employment while working abroad, potentially resulting in financial obligations or entitlement to benefits such as holiday pay, depending on local regulations.
The consequences
Penalties up to €5,000.
Local entitlements, such as termination arrangements.
Employer brand damage and other non-financial consequences.
What WorkFlex does
WorkFlex assesses whether local labour laws will apply to an employee's work abroad based on home and destination country legislation. We consider factors like the duration of the assignment and the nature of the employee's tasks.
5. Work Entitlement
The risk
An employee working abroad may not have the legal right to work in the destination country, which could lead to an illegal labour situation.
The consequences
Penalties exceeding €5,000.
Potential company and employee ban from entering or conducting business in the country.
Employer brand damage and other non-financial consequences.
What WorkFlex does
WorkFlex assesses whether the employee has the necessary work entitlement in the destination country. This is done through a business traveller assessment. If a valid work title is not in place, the request is flagged as high-risk and typically declined.
6. Posted Workers Directive
The risk
Under the EU Posted Workers Directive, employees sent to perform work internationally must be registered with the authorities in the destination country. Workations are typically not considered as posted work, except in Belgium. For business travellers, a case-by-case assessment is required.
The consequences
Penalties up to €500,000 for failure to register on time.
Employer brand damage and other non-financial consequences.
What WorkFlex does
WorkFlex assesses the need for posted worker notifications. If required, we perform the notification in up to 24 countries, ensuring compliance. Our No-risk coverage applies to this risk dimension.
7. Data Protection
The risk
Unauthorized access, breaches, or theft of data during the employee’s trip abroad may violate data protection laws similar to the GDPR.
The consequences
Data breaches leading to penalties exceeding €5,000.
Employer brand damage and other non-financial consequences.
What WorkFlex does
WorkFlex assesses GDPR applicability and reviews data protection laws in the destination country. If needed, we conduct a Transfer Impact Assessment (TIA) and upload it to the platform for compliance.
8. Health & Safety
The risk
Changing circumstances in the destination country, such as political conflict or natural disasters, could create health or safety risks for employees working abroad.
The consequences
Medical costs exceeding hundreds of thousands of euros.
Negligence of duty of care leading to damage to the employer's reputation.
Other non-financial losses.
What WorkFlex does
WorkFlex monitors the safety and health situation in the destination country, providing regular updates during the employee's trip. We notify both employees and employers if risks increase and offer an SOS button for emergency notifications.