More and more companies are allowing their employees to engage in remote work or workations, but those implementing it without professional support face significant risks.
Tax pitfalls, labor law complexities, and operational challenges can quickly become costly.
Companies that want to organize workations for employees or allow home office abroad must be aware of the legal framework.
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Many companies assume that simply approving a remote work request is enough. However, various legal aspects must be examined. Each request comes with unique requirements and must be assessed individually.
When legally implementing a workation, the following five factors must be carefully reviewed within the context of the laws of the employee's home country, the company's registered location, and the destination country:
For these five points, it's essential to remember that workations can only deliver their full potential in employer branding, recruiting, and employee retention if both employees and employers work together to ensure legal compliance.
However, legal requirements are only half the battle. For workations to be truly effective, internal organization and communication must also be well-structured.
Beyond legal considerations, internal organization and communication are critical for the success of a company's workation strategy. Workation policies should be transparent and clearly defined, ensuring equal opportunities for all employees.
This is why it makes sense to establish a remote work policy and make it accessible to all employees.
A remote work policy is an internal corporate guideline that establishes clear rules for working outside the office.
It defines the conditions, expectations, and legal framework under which employees can work remotely — whether from home, a coworking space, or abroad during a workation.
Without clear guidelines, uncertainty arises among employees and managers, reducing workation adoption and missing out on employer branding and recruiting opportunities. Additionally, companies may misjudge the benefits of workations and fail to maximize their potential.
If these five points are overlooked, workations might not function as planned — or even create more harm than good:
Workations offer companies the opportunity to enable flexible work while strengthening employer branding. However, without a solid strategy, they can lead to unexpected consequences — financial, operational, and cultural.
This is particularly critical when companies implement workations without clear compliance and security measures. Potential consequences include:
Even short work stays abroad can make companies or employees liable for taxation. In some cases, businesses might need to register a permanent establishment abroad, leading to high costs and bureaucratic hurdles. Additionally, local labor laws may impose additional employer obligations.
Remote work from abroad can significantly jeopardize IT security. Unsecured networks, unencrypted connections, or inadequate access controls increase the risk of cyberattacks and data breaches. Violations of the GDPR or other data protection laws can result in severe fines.
Lack of guidelines regarding availability and time zone coordination can lead to inefficient collaboration and misunderstandings within the team. Without clear policies, remote work can devolve into an unstructured workflow, impacting productivity and team dynamics.
Unclear policies or inconsistencies in approving workations can lead to employee frustration. If some teams benefit from workations while others do not, workplace tensions may arise. Furthermore, negative publicity can occur if workation programs fail or legal issues arise.
Another risk? Hush Trips.
The term combines the English word "hush" (meaning "quiet" or "secret") with "trip." According to a SAP study, 14% of employees secretly worked abroad without informing their employer. In the worst case, this can have serious legal and financial consequences for both employees and companies.
Workations have become a key innovation in employer branding and recruiting while playing a crucial role in employee retention.
The good news? All these risks can be avoided. With the right strategy, workations don't have to be a compliance headache or a burden for HR teams—they can become a valuable opportunity for companies.
However, businesses that plan workations or allow remote work abroad must develop a legally secure workation strategy. Ignoring compliance requirements puts companies at risk of high costs, security breaches, and employee dissatisfaction.
Want to learn how your company can implement workation concepts or remote work securely and efficiently? Or do you have specific questions about this topic? Book a non-binding consultation now!
Roman Matyushkin
Managing Director
Are you ready to enable workations in your company?
In a non-binding initial consultation, we will explore how LUBYO can support your business in making workations a success.
In this conversation, you will learn:
✔ How to implement workations effectively in your company.
✔ How workations can become a competitive advantage in recruiting and employer branding.
✔ How quickly you can offer workations and what a concrete implementation plan looks like.