Cross-Border Telework - Policies, Risks, Myths and Realities

Since the COVID-19 pandemic and with the accelerated advent of digital technologies, more and more employers are offering their employees the opportunity to work in a hybrid or even completely remote mode. At the same time, cross-border telecommuting is gaining in popularity.

Canadian employers anticipate that approximately 113,000 employees will telework exclusively from another province or territory. While employees benefit from greater flexibility, this new reality raises many complex legal issues and organizational challenges. This article will explore the policies, risks, myths and realities of cross‑border telework.

What Is Cross-Border Telework?

Cross-border telework is the performance of work for an employer from a location of the employer's premises in another jurisdiction on a permanent or temporary basis. This practice involves the use of information and communication technologies.

Risks and Challenges of Cross-Border Telework

Whatever form it takes, the phenomenon of cross-border telework undermines the anchor of employment law, namely the notion of the workplace and brings the following risks and challenges:

• Jurisdiction and Competence of the Courts 
  Determining the jurisdiction of the courts will be complex; it will generally depend on where the employee actually works, hence the importance of managing the workplace either through an employment contract or a telecommuting policy.
• Minimum Applicable Employment Standards 
  The minimum standards applicable will vary depending on the jurisdiction in which the teleworker is located. For example, a teleworker residing in Ontario and teleworking for a company under Québec provincial jurisdiction will be subject to Ontario labour standards.
• Privacy and Data Protection 
  By its nature, cross-border telework involves the inter-jurisdictional transfer of sensitive data and the application of a body of data protection law that varies from one jurisdiction to another. The risks of data security breaches increase significantly in different countries.
• Taxation and Social Security 
  The social security and tax regimes to which cross-border teleworkers will be subject will vary according to their place of residence and the country where the temporary telework will occur.
• Health and Safety at Work 
  Although it is now accepted that an employment injury can occur at the worker's home, an employee domiciled outside of Québec who performs telecommuting tasks outside of Québec for a Québec company will not be covered by the CNESST. The employee will generally be covered according to the existing plan based on the place of work. This is also an important issue in cases of temporary telework.
• Immigration 
  The right to reside and work in a country other than the country of citizenship is subject to the immigration rules of the foreign country, even if the work is performed for an employer located in another jurisdiction.

Myths and Realities

The practice of cross-border telework gives rise to a multitude of preconceived ideas that need to be clarified:

• Work Permit 
  Some may think that performing work for a Québec employer from abroad does not require a work permit. The reality is quite different. International telecommuting requires consideration of visa and residence/work permit requirements in the foreign host country. Some States have specific telework visas in place, but it is not yet the case for the majority. Many jurisdictions prohibit or do not provide for this possibility. The telecommuter who violates immigration rules and the employer who has agreed to the practice of telecommuting abroad are in violation of the law.
• Non-Competition Clauses 
  It may be tempting to believe that an employee subject to a non-competition clause could not telework if their home is within the radius covered by the non-competition clause. However, according to the Superior Court, an employee who would otherwise have worked at the competing employer's place of business, but for COVID-19, may legitimately telework from a location within the radius of their non-competition undertaking. However, the case law is not well developed in the non-pandemic context.
• The Temporary Nature of Cross-Border Telework 
  Some may believe that telecommuting is a temporary response to the pandemic. However, this trend looks set to grow. Indeed, the benefits of cross-border telecommuting, including access to a larger talent pool and reduced costs, are compelling attractions for any employer. Temporary telecommuting is also very popular with employees as a retention and an employee satisfaction tool.

In short, cross-border telework is a new reality for many workers and employers. While it offers many benefits, it also presents some legal and organizational challenges. To address these challenges, it is essential to have clear and appropriate telework policies that consider the particularities of this mode of work.

If you have any questions, do not hesitate to contact our Labour and Employment Law Team, who will be pleased to assist you.