With remote work becoming more commonplace across the globe, Portugal has set interesting new terms to appeal to the growing crop of digital nomads.
A law passed on Nov. 5 by the Portuguese parliament makes it illegal for employers to contact employees after work hours. Employers that violate the law could face financial penalties, and will also have to help pay for expenses incurred by remote working, such as higher electricity and internet bills, according to Portugal’s Socialist Party government.
“The pandemic has accelerated the need to regulate what needs to be regulated,” Ana Mendes Godinho, Portugal’s minister of Labor and Social Security, said during a recent tech conference in Lisbon. “Telework can be a ‘game changer’ if we profit from the advantages and reduce the disadvantages. We consider Portugal one of the best places in the world for these digital nomads and remote workers to choose to live in, we want to attract them to Portugal.”
The new labor laws will not apply to organizations with fewer than 10 employees. Measures to tackle well-being concerns from too much isolation are also included in the remote working rules, with companies expected to organize face-to- face meetings at least every two months.
As the first European country to alter its remote working rules as a direct result of the COVID-19 pandemic in January of this year, Portugal has been at the forefront of flexible working legislation. The temporary rules made remote working a mandatory option — with a few exceptions — and obliged employers to provide the necessary tools for getting the job done at home.
“It is important to protect the telework standard, which allows a better conciliation between work and personal life, without any lack of productivity. We believe that other countries will probably implement a more flexible and friendly telework standard.”
David Carvalho Martins, managing partner in Littler Mendelson P.C.’s Portugal office, noted there are several points of contention and uncertainty among Portuguese employers that could lead to litigation down the road.
One example of this is how the law will be applied to workers who were hired in an on-call capacity. If they are on-call outside of normal working hours and refuse to answer under a right to disconnect, would an adverse action against the employee be deemed as discriminatory? An additional point of uncertainty is focused on employers’ responsibility to pay for the costs of telework.
“What happens if the employee did not have [their] own home in the last year or did not have utility invoices [in their] own name?” Martins noted as one potential example. Martins also said employers have concerns about utility increases from one year to another, and if those rising electricity costs were increased based solely on market conditions.
The law’s provision for employer-paid telework costs were a result of issues such as unequal access to IT equipment during pandemic-induced lockdowns, which showed the need for the government to step in.
Martins said that while the law’s additional aim might be to entice digital nomads to settle upon Portugal, it’s unclear if that will pan out. The law could, in fact, have the opposite effect.
“At the moment, we do not foresee how this new regime will attract workers to Portugal,” Martins said. “If they are moving to Portugal due to an employer’s interest [posting of workers], this new [law] may be considered as a disincentive, at least until other European countries decide to implement a similar telework [law].”
Martins said Portugal’s law is likely the first domino to fall in Europe in regard to telework laws, as this way of work is “here to stay.”
“This is a new reality in the way work is provided, which the pandemic has accelerated, and for which we must of course be prepared, thus European Union and its member states won’t be silent,” Martins said. “It is important to protect the telework standard, which allows a better conciliation between work and personal life, without any lack of productivity. We believe that other countries will probably implement a more flexible and friendly telework standard.”