WorkMotion: Beyond Employer of Record

  • April 25, 2022
  • Author: Pieter Manden
Reading Time: 6min
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Introducing new permanent and temporary global talent solutions.

WorkMotion supports organisations in engaging talents all around the world. We exist by the virtue of regulatory complexity and administrative burden. In other words, if global employment was easy, our clients wouldn’t need us. 

So this is why we’re working tirelessly to bring you solutions to the problems of global hiring. WorkGlobal is our Employer of Record (EoR) solution. It allows companies to hire in more than 160 countries, providing them hassle-free access to the global talent pool. We also do a lot more. WorkMotion is not your average Employer of Record. Our ambitions go bigger and broader than streamlined international hiring and here’s how. 

Broader — go beyond your standard EoR

WorkMotions WorkDirect solution offers a direct employment option that allows clients to hire international talents on their own. Still, all of the compliance topics –  from contracts to payroll – are handled by us. 

Recently, we also added a third solution — WorkFlex. WorkFlex supports employers in their bid to allow existing employees temporary work from abroad benefits in a compliant and managed way. Temporary work from abroad, otherwise often called Workation, is an umbrella term for any employee stay abroad that is privately driven, but during which the individual continues to work. 

WorkMotion is proud to be the first provider to offer a tech-enabled solution for this “benefit beyond boundaries”. More importantly, however, we love how it characterises our ambition to broaden horizons. While WorkGlobal and WorkDirect are about permanent employment abroad, WorkFlex is about temporary work from abroad. The difference might sound marginal, but it’s not. From a compliance perspective, especially, the difference between permanent and temporary is like night and day. 

Under permanent international employment, the only entity that remains under the jurisdiction of the country of the employer is the company itself. Everything else is in the country where the employee lives and works. The labour law of that country applies, so a local employment agreement is required. Given that the employee is also taxed and socially insured in that country, a local payroll is required too. Payments also need to be made in the local currency. This is what makes hiring internationally a challenge and they’re exactly the problems WorkMotion is solving with our permanent global employment solutions — WorkGlobal and WorkDirect. 

When it comes to temporary work from abroad, the employment setup is exactly the other way around. The only entity that goes abroad is the employee. Everything else remains in the origin country. The existing employment agreement stays in force and the home country’s labour laws apply accordingly. The same goes for the payroll in the home country — both employer and the employees do not want any tax, social security or legal liability to arise in the country where the employee temporarily works from. Therefore, WorkMotion´s temporary work from abroad solutions ensure that these local liabilities indeed do not arise, or are at least mitigated as much as possible.  

This addition of WorkFlex to our portfolio is just the beginning. There are many other means of engaging other types of internationally active employees that might be at the core of WorkMotion’s next solution. Stay tuned!

The bigger picture 

As you can see, broadening WorkMotion´s horizon is a technical topic. How we think bigger, however, is more straightforward. It’s about the higher mission we are trying to achieve. Yes, we are a commercial business. However, even in the process of building a highly successful company, we also want to do what we can to change the world for the better. This has two aspects. 

Breaking down barriers

Fundamentally, WorkMotion believes that working and hiring without geographical barriers positively impacts global societies. Think of how much good it does to fill a vacancy in Germany with a remote hire from India. Filling the vacancy in the midst of a European labour shortage is great and providing employment to someone from a country with generally fewer employment opportunities is even better. 

Hiring globally also increases diversity in the workplace. Increased diversity within organisations is linked to increased creativity and improved problem solving as well as better marketing performance and increased customer satisfaction (1). Moreover, the establishment of a global talent pool is likely to greatly increase the salaries and welfare in the aforementioned less wealthy regions. This is a logical outcome of opening up the Western job market to people from different regions.

Securing the way

The second aspect is a more activist one. Global employment is still something new and new things are often hard to adopt. People, organisations and governments require time to adjust. While the pandemic fast-tracked global employment, it didn’t give us this time. As a result, we now see some bounce-back with employers requesting their employees to return to the office. However, the fact that many employees hesitate to follow this instruction, either by resigning as part of the Great Resignation (2) or communicating this, as Google employees did recently (3), shows that we have passed a point of no return. 

Besides the mental challenge, bigger challenges lay within the existing regulatory framework. The rules around labour, taxation and social security were not designed with the new reality of work in mind. This new reality of work is characterised by blurred boundaries, both between countries and between working and not working. On the contrary, regulators generally only have autonomy for one specific country. Even within the EU, tax policy is one of the few areas that has hardly been aligned, and even if it was, this would not guarantee success. 

An interesting example is the OECD´s commentary (4) on the question of whether or not a home office can constitute a so-called Permanent Establishment — a corporate tax topic. Many countries have adopted the OECD´s policies on this topic which is, as mentioned, a rather seldom phenomenon. At the same time, the policy states that home offices will “rarely be a practical issue”, and that “activities carried on at a home office will often be merely auxiliary”. We won’t bore you with the technical details but suffice by saying that these assumptions are clearly no longer accurate. 

At WorkMotion, we put all our efforts into paving the way for the future of work. As a remote company ourselves, we lead by example. Our solutions enable clients to follow this lead relatively easily but when we say our ambitions are broader and bigger, we mean it. As we speak, WorkMotion is finalising a letter to send to the OECD. In this letter, we raise awareness for these issues, as well as other related issues, and provide suggestions for solving them as soon as possible. Previously, we contacted the governments of 20 countries about the qualification of temporary remote workers for immigration purposes. So rest assured that we are on a mission to make global employment work — literally and figuratively speaking! 

 

 

Sources:

  1.  Cox, T.H. & Blake, S. (1991). Managing cultural diversity: Implications for organizational competitiveness. Academy of Management Executive, 5(3): 45-56.
  2. Dan Hughes. November 2021. Back to the Office – the great return or great resignation? Digital Marketing Institute.
  3. Daniela Molina. March 17 2022. Google Employees Unhappy with the Latest Return-to-Office Policies. Think Remote.
  4. OECD, Commentaries on the articles of the model tax convention, www.oecd.org.
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