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The Virtual Expatriate

One of the most common issues faced by expatriate couples is the impact on the career of the spouse. In many expatriate locations, specialized jobs similar to what the spouse had previously held simply do not exist. This can be a critical issue in moving to another country. The potential loss of earnings, the prospect of having outdated skills on returning home, as well as the adjustment to becoming a stay at home spouse can become issues that bring an expatriate assignment to an early end.

This is particularly difficult when the couple both have high level or very specialized jobs. With the benefit of technology however, a growing number of expatriate spouses are turning to virtual employment. A virtual, expatriate employee lives and works in a different country to that of their employer. They typically work remotely via their computer making use of the internet, email, and VoIP (voice over internet protocol). This allows the employee to continue with their employment and allows the employer to retain specialized niche skills.

Employers should carefully consider all aspects of a request from an employee to work as a virtual expatriate:

  • What is the company policy, process, or precedent regarding previous requests?
  • What impact will there be regarding other company policies such as document controls, data protection agreement, security, business travel, insurance etc?
  • If the employee requires equipment, who will install and attend to maintenance?
  • Is there an appropriate working space at the employee’s home in the host country?
  • What is the policy of the company employing the virtual expatriate’s spouse regarding spousal employment?
  • Is the time zone of the host country conducive to maintaining contact with the virtual expatriate and with clients?
  • Who will pay for office running costs such as computer, internet connection, and utility costs?
  • How will the virtual expatriate’s work be monitored, and how will their performance be measured?
     
From an international assignment point of view, virtual expatriates are typically paid in the same way as any other non-virtual expatriate employee. The employer has the advantage however of not having to pay significant premiums or benefits that are likely already granted to the spouse employed in the assignment country. Benefits such as medical, housing, education of children, flights home and transport are likely already provided to the “non-virtual” expatriate by their employer.

There are however differences between virtual expatriates and non-virtual expatriates. The employer of a virtual expatriate often does not have a presence in the country that the employee resides in. This presents challenges in registering the employee to pay local tax, social security contributions and to ensure compliance with local employment laws. It is believed that some employers ignore these issues, and continue to pay the employee in their home country; however this can be risky if the local authorities in the host country become aware of it.

In reality most employers are flexible in approaching requests to become a virtual expatriate employee. In many cases the employee formally resigns from full time employment and signs on as a contractor either directly or through a labor broker, whereby they are paid a fully inclusive fee and are left to declare local income and deal with local employment laws themselves.
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