This Irish start-up is helping firms avoid the pitfalls of work-from-anywhere policies

  • The option for remote work is evolving from being a perk to a must-have option in recruiting talent.
  • A recent report found an increasing number of professionals leaving their jobs if they haven't been offered the option to work remotely.

As more employees settle into remote work for the longer term, companies are faced with a great deal of complexity around tax and compliance with employment laws.

The option for remote work is evolving from being a perk to a must-have option in recruiting talent.

A recent report found an increasing number of professionals leaving their jobs if they haven't been offered the option to work remotely.

It means more possibilities for professionals, especially in the tech industry, to choose where they work and in turn, more pressure on companies to be nimble and responsive to workers' demands and the responsibilities that brings.

For a start-up like Boundless, a platform for managing remote workers' tax and employment compliance regardless of location, it has presented an opportunity.

Founded in 2019 in a time when remote hiring was not the norm it is now, the Irish company quickly met a surge in demand.

"We didn't necessarily see or understand immediately the level of impact of relocations through choice [early in the pandemic], where individuals reassessed their personal situation and wanted to relocate," CEO Dee Coakley told CNBC.

This was a mix of people opting to return to their home countries or seeking out a change of pace in a new country for themselves or to raise their families.

"There's been a huge amount of movement around the world and for us a large proportion of the inbound that we get now is from companies where they're having people coming to them and asking to relocate."

Demand for these tools is reflected in investor interest with Portuguese start-up Remote, which provides similar services, recently raising $150 million.

Tax and employment law

Setting up an employee or a team to work in a country where a company has no existing base can be a minefield, according to Coakley.

It requires understanding everything from local employment laws to tax obligations to worker benefits.

"If I'm a British company and I have someone that wants to move to France, I have to comply as the British company with the employment regulations of where that person is at any point in time. I suddenly have to be au fait with the employment laws of France and I have to provide all of those rights and protections to that worker."

Navigating local regulations can be tricky. For example, in France workers have the right to disconnect – another trend emerging in the post-Covid workplace – that restricts the times that a boss can contact their staff. In a remote working age, with staff spread across borders, this is a consideration that can get lost in the mix.

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At its core, Boundless, which recently raised 2.5 million euros ($2.9 million), is a software platform to manage where workers are, their payroll, what their tax status is and what their benefits are.

Boundless sets up legal entities in various countries with the necessary registrations at tax and employment authorities and Boundless acts as the legal employer. Currently the start-up is operating in 17 countries where it has completed the full company and tax registrations to enable its customers to hire there.

"As a company if I want to get set up to do all of that, particularly on the payroll side, I have to register with the local tax authorities and in some countries that can take up to 18 months."

Risk

Boundless and similar companies expose themselves to risk as well by taking on the role of legal employer.

"The standard legal structure is a tripartite co-employment agreement. Boundless is named as the legal employer with responsibility for compliance, processing payroll, filing taxes and making payments to the worker," Coakley said.

"Anything related to HR compliance or any kind of disputes or issues, the customer can come to us to seek support around the specific laws of that country. Where the liability lies is very dependent on the law of the country so Boundless does take on quite a lot of risk when it comes to these workers and in some countries we do have very significant legal liability."

The company would not disclose how many employees are currently employed through Boundless' services but Coakley said it expects to be supporting 1,000 employees on its platform by next year.

Coakley said Boundless has yet to face any of these legal challenges but as more and more employers opt for allowing remote work, its compliance responsibilities will swell.

"There are a lot of players in our space, it's become really busy particularly in the last year or 18 months. We very much position ourselves as the people with full robust compliant employment."

She added that as demand for remote work compliance tools grows, companies need to be wary of snake oil salesmen.

"You'll find people who have entered this space in the last year and they say they support employment in 130 countries. Clearly they have not gone through the process that we have gone through for all of those countries because it's not physically possible to set up that many countries in that period of time. They're generally working through networks of partners and there's no way they've done deep due diligence on 130 partners in a 12-month period."

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