Employers Must Navigate Risks as Digital Nomadism Gains Momentum

The trend of digital nomadism has become increasingly popular among employees, with 1,040 Bank of England staff working overseas in 2025 under its 'working from abroad' policy.

The policy allows employees to work remotely for up to 40 days a year, and those who did so averaged more than 12 days overseas last year. Research from the Chartered Management Institute found that allowing employees greater flexibility in where they work from can bring clear benefits, with 35% of managers surveyed saying it increased employee wellbeing and mental health.

However, there are risks associated with allowing staff to work abroad. Lawyers warn that employers should ensure employees have the legal right to work in their destination country before approving any overseas working request. Employers also need to understand local employment laws, as employees working abroad may acquire rights that can become significant if the employment relationship later breaks down.

Rena Magdani, partner and head of employment, pensions and immigration at Freeths, advises employers to use trial periods with regular reviews to assess how the arrangement is working in practice. Smruti Jeyanandhan, immigration partner at Bates Wells, warns that cross-border working can give rise to employee tax, payroll withholding, and social security liabilities.