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What to consider when repatriating during COVID-19 pandemic

Ema Boccagni
man sitting on gang chair with feet on luggage looking at airplane

Many countries have advised temporary residents to return to their home countries, where travel allows, and have warned that their ability to provide consular service to citizens based overseas may be impaired. This has prompted many assignees to ask their employers whether they should return to their home location.

We have heard from many clients who are concerned for their assignees and take their duty of care to their employees extremely seriously. However, although repatriating employees can seem simple in principle, there are a number of practicalities and considerations that will need to be taken into account.

The movement of people can assist the spread of the virus and many countries have advised against non-essential travel. Therefore, if employees are repatriated, there is an associated risk that they may assist the spread of the virus and hamper efforts to contain its spread in their home countries.

Any decision to repatriate should consequently include a risk assessment which takes factors into consideration such as whether or not there is a risk that the employee may unknowingly assist in the transmission of the virus during repatriation. Any assessment should also weigh up the risk of remaining in the host location versus the risk of repatriation into consideration. We recommend liaising with medical experts to understand whether host locations either are or would be able to cope with managing an outbreak of the virus, in order to assess which location is lower risk for assignees.

Due consideration should also be given to your host country operations. If your assignees occupy leadership positions in the host location, would repatriation have an impact on business continuity in the host location? Would it impact the livelihoods of local employees if repatriation led to the closure, albeit temporarily, of host operations?

What are the logistical challenges associated with repatriation?

As countries have advised against non-essential travel, many airlines have either stopped flying internationally or have severely curtailed their routes. Therefore, direct flights home may no longer be possible, and some countries may not allow travellers to depart from areas that are considered to be a transmission hotspot.

Finally, upon arrival in the home location, returnees will likely need to undergo some form of quarantine or isolation for a period of time, which tends to be 14 days. Do returning assignees have somewhere they can isolate? In some cases, returnees may be kept in government quarantine facilities, but in many other cases they may be required to self-isolate.

If requiring temporary accommodation, the question is then who should meet such costs: the employer or the employee? In this case it is important to decide after evaluating two key factors: firstly, at whose request has the repatriation been undertaken: the employee or the employer? If the latter, the employee would expect accommodation costs to be met by the employer.

If you repatriate your employees, should you adjust their assignment salary?

When an employee is on a long-term assignment, the home-based approach is still referenced by many companies when calculating the employee’s assignment salary. This means allowances or adjustments such as a cost of living adjustment, location allowance and assignment allowance may be provided.

Our general advice is that an employee should continue to retain these allowances while in the home location if it is expected that the employee will return to the assignment location again within a short period of time (e.g. within 6 months). The cost of living adjustment (COLA), for example, is designed to ensure that the employee’s purchasing power is maintained throughout the assignment, and while not of these expenditure items are consumer on a daily basis, this has to be taken into consideration.

Ability to work in the home location and working from home arrangements

The employee will likely need to work remotely while in the home location if their role allows it, at least for the period of time during which they are required to quarantine or self-isolate upon their return.

The employee will need to be informed and brought up to speed with any working from home arrangements that the company has introduced. If the employee’s role does not allow them to work from home, the question arises of how the time spent in isolation should be treated. Will the employee be paid during this time or will they be required to take annual leave, medical leave or unpaid leave? Due consideration should be given to who is requesting the repatriation (the employee or the employer) as well as ensuring compliance with relevant legislation regarding enforced absences from work due to the repatriation process.

Ongoing costs

While the employee is back in the home location, the majority of their assignment-related costs in the host location will still need to be met. For example, rent for host accommodation and host location school fees will still need to be paid even if the employee is not in the host location. As these are both significant items of expenditure, repatriation is unlikely to therefore lead to significant cost savings for the company.

Children’s education

In order to minimise the disruption of COVID-19 upon children’s education, many schools have adapted and incorporated online learning into their education programs, with lessons now often live streamed. Repatriating the employee and dependent family back to a home location which may be several time zones removed from the location of assignment may impact children’s ability to participate in these lessons and interact with fellow students in a learning environment.

Tax liability

Whilst the employee is in the home location it is likely they will still try and continue to undertake work for the host country entity where possible. This may lead to complications in terms of tax liability.

Firstly, by returning to the home country for an extended period of time, the employee may once again become classified as resident in the home location for income tax purposes.

Furthermore, if an employee is living in their home country but performing work for the host entity, this may give rise to complications associated with corporate tax liability

The decision to repatriate expatriate employees during the current pandemic is unlikely to be straightforward and many factors need to be considered, with the impact on the health and safety of the employee and their family likely to be paramount.

The above is unlikely to be an exhaustive list of factors which will influence a company’s decision regarding whether or not employees and their families should be repatriated. However, hopefully this assists in identifying some of the key considerations.

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