With Spain becoming the latest country to open its doors to digital nomads, 49 nations offer visas allowing remote workers to work from their countries. Out of an estimated 35 million digital nomads worldwide, 35% are employed by a company.
Digital nomad employees, otherwise known as self-directed international telecommuters or international wandering workers, refers to those who had originally worked for their employer in their home country but who later, for personal reasons, moved abroad, using a digital nomad visa. Most digital nomads are well-educated and work in functions that are consistently experiencing talent shortages. Digital nomads can be a key talent attraction and retention strategy, but it also requires a flexible culture which can successfully appeal to and manage these employees. For example, 6% of Spotify’s 11,453 employees moved to a different country after the company introduced its Work From Anywhere policy. As a direct result of the policy, the company announced that its turnover has decreased compared to pre-pandemic levels and the diversity of its workforce has increased.
For global employers who contemplate such a policy, considerations include:
- Identifying your digital nomads and knowing where they are, where they’re traveling to, and for how long.
- Drawing up an agreement that defines the terms of the arrangement. It should specify that the nomad is a telecommuter whose place of employment is and ideally remains in a location the multinational company currently operates in. Therefore, the local HR and legal team can put the employee on their payroll as well as ensure labor and employment law compliance.
- Other terms, such as limiting the amount of time nomads can spend in any one location and listing places that are off-limits because of their laws and regulations, can greatly reduce the risks.
- In analyzing legal compliance in an international telecommuting situation, always focus primarily on the payroll mandates and employment law challenges of the international telecommuter’s overseas host-country, not the employer’s home country.
Outlook: Work-from-anywhere policies and digital nomad visas have created a wealth of opportunities for remote work and shifted immigration and mobility choices from the employer to employee. However, the lack of regulations on these international wandering workers pulls their employers into cross-border employment relationships and their nuanced legal challenges.