Management Consulting
Aon
Full Credential Description
Aon plc has provided guidance to UK employers regarding the implications of remote working outside the UK, a trend accelerated by the COVID-19 pandemic. As many employees seek to work from overseas, employers must navigate the complexities this creates for employee benefits and tax obligations. The shift towards a more agile working environment, while beneficial for employee engagement and retention, poses significant challenges for policies related to pensions, medical benefits, and group risk insurance. One of the primary issues identified is the potential impact on pension schemes. Employers need to determine whether employees will continue to be compensated under a UK contract and if they remain subject to UK taxation. Changes in an employee's work location could affect their eligibility for tax-relievable contributions and their ability to enroll in workplace pension schemes, which often require a UK address. Medical benefits also present challenges, as many providers do not cover treatment received outside the UK. Employers with employees working abroad may need to consider international coverage options, which can be costly. If medical benefits are considered a contractual right, there may be an expectation to maintain these benefits at an appropriate level for employees located overseas. From a group risk insurance perspective, the relocation of employees can alter the perceived risk of the insurance scheme. If employers do not declare the locations of their employees, it could impact the provision of coverage. Aon advises employers to continuously assess and track non-UK locations and their implications for each benefit, ensuring clear communication with employees about how their benefits may be affected by their work location. To address these challenges, Aon emphasizes the importance of understanding the intended locations of all employees working remotely. This knowledge allows employers to consult with professional advisors and benefit providers to assess the impact on each benefit offered. Effective communication with employees about the implications of working overseas on their benefits packages is crucial, as it helps protect individuals and clarifies any restrictions that may be placed on remote working policies.