Due to the travel restrictions caused by the coronavirus pandemic, and in order to alleviate shortages of labor, companies in Estonia have increasingly begun to hire international remote workers, a survey conducted by the Center for Applied Social Sciences (CASS) at the University of Tartu shows.
"Flexible solutions, when it comes to the work environment, are becoming ever more important and many jobs do not necessarily require working at the location of the employer," Anneli Aab, head of the Work in Estonia program at Enterprise Estonia said.
In the course of the survey, human resources specialists at Estonian companies were interviewed about their experiences of hiring international workers, what issues, obstacles and problems business operators have encountered in relation to the hiring of international remote workers and where they have sought support and received it.
It appears from the survey that Estonian businesses mainly use international remote work due to coronavirus related restrictions or when a good specialist is not prepared to relocate to Estonia.
Often remote working is part of a longer process of bringing an employee to Estonia, meaning that the employee will continue working remotely from their home country until relocating to Estonia becomes possible.
It is easier for companies that already have a representation in a specific country to make use of the possibilities offered by international remote working. There are also companies in Estonia that need short-term auxiliary labor and offer short-term remote work to residents of other countries.
For companies that are using international remote work or are mulling its use, taxation and matters related to taxation raise many questions, such as in what country or countries the labor taxes of an international remote worker should be paid in order to not violate valid regulations.
Likewise, business operators do not know where to turn to to get answers to their questions. This, according to the survey, substantially reduces possibilities for the use of international remote work.
Due to uncertainties related to taxation, some employers hire only residents of those countries where they have a legal entity. Hence, the full potential of international remote work remains largely untapped for them.
The authors of the survey recommend establishing a contact point for international remote work to which business operators could address their questions. Also, intergovernmental agreements concerning the taxation of remote work and frequently asked questions, complete with answers to them, should be brought together onto a single website.
"While today we a lacking a champion of international remote work, we need such body very much because international remote work could be a good tool for many companies for alleviating labor shortage," Aab added.
Editor: Helen Wright