EEA framework agreement on cross-border telework – signatory Member States
19 Jun 2023
As communicated in our newsletter of 13 April, a framework agreement on determining the applicable social security legislation for certain cross-border teleworkers in the EEA and Switzerland was recently agreed on within the Administrative Commission for the Coordination of Social Security Systems. This framework agreement, which enters into force on 1 July 2023, aims to introduce a more permanent arrangement to determine the social security position of cross-border teleworking employees, following the period of neutralisation of teleworking days in this respect, which will end after 30 June 2023.
General principles
More specifically, the framework agreement provides for a system whereby – instead of the legislation of the Member State of residence that would normally be applicable once an employee teleworks 25% of their working time there – the social security legislation of the Member State where the employer is located will apply, if the following conditions are cumulatively met:
the employee only has one employer (or more employers with their registered seats in the same Member State);
the employee only works in the Member State where the employer is located and only teleworks in their Member State of residence and;
these teleworking days account for less than 50% of the employee’s total working time.
Signatory Member States
This system is based on article 16 of Regulation (EC) No. 883/2004 on the coordination of social security systems – which provides for the possibility of an exception to the Regulation’s regular conflict rules. It will only apply if both Member States that are involved in a given cross-border employment situation that falls within the scope of the framework agreement signed the agreement.
Belgium acts as a depository state for the framework agreement and is consequently keeping track of which Member States have already signed the agreement. As of writing, the below Member States signed the agreement, with entry into force as from 1 July 2023:
Austria;
Belgium;
Czech Republic;
Finland;
Germany;
Liechtenstein;
Luxembourg;
Norway;
the Netherlands;
the Slovak Republic;
Switzerland.
More Member States are likely to follow, with reportedly some 10 additional – yet to be confirmed – signatures in the works.
Application of A1 form
The A1 form that will evidence the fact that the cross-border teleworking employee is subject to the legislation of the Member State where their employer is located (if the above-mentioned conditions are met) must be applied for in the latter Member State. The form cannot be requested for a period preceding the entry into force of the framework agreement.
Moreover, even if the framework agreement entered into force in both Member States involved, the A1 form can in principle not be filed retroactively. There are two exceptions to this general prohibition of retroactive application, however, on the condition that social security contributions were already being paid in the signatory Member State where the employer is located:
A general exception that allows for a maximum retroactivity of three months;
A one-shot transitional period of one year following 1 July 2023, thus ending on 30 June 2024. During this period, an A1 form can be requested for a past period of up to 12 months, however, may still not include a period prior to the entry into force of the framework agreement.
Key takeaway
As of 1 July 2023, teleworking in the Member State of residence will be treated differently than has been the case since the beginning of the COVID-19 pandemic. This could result in a change of social security legislation for cross-border workers that have benefited from the neutralisation of teleworking days up until now. As an employer, it’s therefore paramount to map out which of your employees find themselves in such a cross-border working situation, analyse their social security position as of 1 July 2023 and implement the changes accordingly.
If you have questions regarding the above, do not hesitate to contact us; we’d love to hear from you.
