A laptop, a good Wi-Fi connection and an apartment in Spain. What more does an employee need to work from abroad for a few weeks? From a legal perspective, quite a lot.
Remote working has become a permanent feature of the labour market. At the same time, employees are increasingly seeking to interpret the concept of working from home more broadly. After all, if the work is done on a laptop anyway, why not do it from France, Portugal or Italy?
In our practice, we are therefore receiving an increasing number of enquiries from employers about employees who wish to work temporarily — or sometimes on a permanent basis — from abroad. And although a workation sounds appealing, it is not always a holiday from a legal perspective.
An employee who wants to work for three weeks from their holiday accommodation in Spain probably sees little difference between doing so and working from home in The Hague. Same employer, same laptop, same salary.
Legally, however, that change of workplace can make a difference.
As soon as an employee works from abroad, various issues may arise, including employment law, social security, taxation, immigration law, occupational health and safety, privacy and even tax obligations for the employer.
And no, staying below 183 days is not a legal get-out-of-jail-free card. The well-known 183-day rule is a tax rule governing the allocation of taxing rights over employment income and is subject to various conditions.
Has Dutch law been chosen as the governing law in the employment contract? If so, that choice of law will generally remain valid.
But that is not necessarily the end of the matter.
Under the Rome I Regulation, an employee may still be entitled to the mandatory protection afforded by the law that would have applied in the absence of the choice of law. One of the relevant factors is the country in which the employee habitually works.
Working for two weeks from holiday accommodation will not normally change the employee’s habitual place of work. However, the position may be different if the employee works from abroad for an extended period or on a regular basis.
In short, the more established the pattern of working abroad becomes, the more important it is to assess the legal implications.
The country in which an employee actually works also matters for social security purposes.
Within the EU, the general principle is that an employee is subject to the social security system of a single Member State. Where an employee temporarily works from another EU country, they may remain insured in the Netherlands, subject to certain conditions. An A1 certificate may be required for this purpose.
Different rules apply where an employee regularly works in multiple countries. In addition, a special arrangement for cross-border teleworking exists between a number of European countries. Subject to certain conditions, this arrangement allows an employee to remain covered by the social security system of the employer’s country where less than 50% of their working time is spent working from their country of residence.
From a legal perspective, there is therefore a significant difference between saying:
“I’m working from France next week.”
and:
“From now on, I’ll be working from my home in Belgium every Monday and Friday.”
Unfortunately, there is no simple tax rule specifically for workations either.
The 183-day rule may be relevant, but it is not a general permission to work from abroad for 182 days a year.
Furthermore, tax treaties differ from country to country. For example, a specific arrangement now exists for cross-border working between the Netherlands and Germany, under which up to 34 days of working from home may, subject to certain conditions, be treated for tax purposes as if the work had been performed in the employee’s usual country of work.
There is therefore no single EU-wide standard rule for remote working.
Where an employee works from abroad for an extended period or on a regular basis, the implications for the employer must also be considered.
An employee’s presence in another country may, in certain circumstances, give rise to tax obligations for the employer, for example if a permanent establishment is created there.
This is unlikely to be the case where an employee works from an Italian holiday home for two weeks. However, the issue requires careful consideration if an employee works permanently from abroad, serves customers there or has the authority to conclude contracts on behalf of the employer.
The employer’s duty of care does not end at the Dutch border. The employer remains responsible for providing a safe and healthy working environment.
If an employee works outside the European Economic Area (EEA) and has access to personal data, the General Data Protection Regulation (GDPR) may also come into play.
Insurance cover should also be checked. For example, does the employer’s liability or sickness insurance provide cover if an employee works from abroad for an extended period?
For EU citizens working within the EU, this will generally not pose a major problem, although registration requirements may apply for longer stays.
Additional care is needed when dealing with employees of other nationalities. A Dutch residence or work permit does not automatically mean that an employee is also permitted to work from France, Spain or another country.
So check first, then give permission.
In our view, that is not the answer.
The option of temporarily working from abroad can be an attractive employment benefit. However, having clear ground rules in place beforehand makes a real difference.
For example, consider setting out:
This means HR does not have to reinvent the legal wheel every time a request comes in.
Cross-border remote working can often work perfectly well. But “it’s only for a few weeks” is not a legal assessment.
The longer, more frequent and more established an employee’s pattern of working from abroad becomes, the greater the likelihood that employment law, social security, taxation, immigration law or other local rules will come into play.
A brief assessment in advance can prevent a great deal of trouble later.
Would you like to know whether an employee can work from abroad temporarily or on a permanent basis? Or would you like to avoid HR having to investigate the applicable rules from scratch every time a request comes in?
De Clercq’s international employment law team regularly advises employers on cross-border working. We can assess a specific request, as well as help you draft or update a practical remote-working or workation policy.
If you have any questions, please feel free to contact Caroline Mehlem, Attorney at Law specialising in Employment Law & Employee Participation, or one of our other specialists in the international employment law team.
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