Nearshore Americas

Is Remote Working Here to Stay?

Work-from-home (WFH) has become a very controversial employment scheme. Although the benefits have been discussed, governments and companies were resistant to making it the norm. But the case against remote working was more about prejudices. Employers typically thought that a lack of direct contact would permit employees to shirk their duties, among other reservations.

In recent years, we have seen a surge in remote working, with more companies adopting this type of work as a benefit included in their compensation packages. Remote working for one or two days per week became a common fixture in many sectors. But it was not until Covid-19 that we saw an exponential increase in WFH arrangements.

An Unregulated Model

Remote working was implemented without specific regulations. However, in Central America and the Caribbean, several countries have enacted laws to lay the legal groundwork to grant security for companies that want to apply it. Have they been successful?

Costa Rica was the first country in the region to enact a law specifically to regulate remote working. Following suit, Panama and El Salvador issued or are in the process of enacting laws of their own.

These new laws determine certain rights and obligations related to remote working. If we study each one, we can find certain similarities. In order to apply a WFH arrangement, the employer and employee need to voluntarily reach an agreement for its implementation.

Although we can find similar regulations in different countries, each law focuses on different matters. In Costa Rica, it focuses on the way remote working is applied and how it is revoked. In Panama, there are regulations regarding the expenses the employer must reimburse to their employees, particularly regarding internet expenses. In El Salvador, an agreement must be reached regarding which expenses are reimbursed.

That is the main criticism of these new laws. Remote working has never been prohibited. Its implementation and its rules were based on the will of the involved parties. The new laws create new obligations, and more often than not they are ambiguous and unclear. Which expenses need to be reimbursed? The laws do not define it. What happens if there is no agreement on which expenses need to be reimbursed? We do not know.

As you can see, specific regulations provide corporations with the extra safety that they are applying a legally-binding working scheme. Nevertheless, new regulations often create new issues. We are already seeing several interpretations regarding remote working laws that will need to be resolved by the courts.

This is totally different from the countries with no regulations. In the Dominican Republic, Guatemala, Nicaragua and Honduras, employers can apply WFH with their particular regulations, only bound by the general principles of employment law.

Remote Working Beyond Covid-19

Any reservations with remote working were quickly dismissed when the Covid-19 pandemic hit in 2020. Given that the virus spread through physical contact, the application of remote working schemes allowed for the uninterrupted continuation of businesses that could shift quickly to a home setting.

This meant that, although the situation was forced upon them, employers could see the benefits of remote working for both employers and employees. Employers can pitch it as a benefit to attract new talent, or lease smaller, cheaper office space. Employees can save expenses ranging from transportation expenses, food, clothing and so much more.

A report generated by ECIJA, in conjunction with NGO Ipandetec, which studied the state of remote working in the region, recently found that there was no case law regarding the application of WFH schemes. The only case we were able to find was in Costa Rica, where an employer was victorious in demonstrating the continued absence of a remote worker.

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We can suppose two reasons behind the low litigation of WFH arrangements. First, that both parties in the employment relationship are content with the benefits of the scheme and hence do not question their validity or obligations in court. Second, the application of remote working has only recently become common practice and we may see an increase in litigation in the coming years.

Although the pandemic has caused the forced implementation of remote working, we can already see the benefits. It is clear that this experience has made employers less hesitant to apply WFH in the future. There are some issues that we are starting to see: increased workdays, burnout and the impossibility to disconnect from emails or calls outside the working schedule. Despite all this, we can bet that remote working will outlive Covid-19, hopefully for the benefit of both employees and employers.

Daniel Valverde

Daniel Valverde is a partner at Ecija in the area of Labor Law and Human Rights. His main duty is to be the point of contact for clients on labor-related matters. He consults in employment law and human rights, a field in which corporations will have a key role in the future. You can contact Daniel here:

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