Sunbathing at work: the NSSO clarifies their position on ‘workations’
22 Feb 2022
Unbelievable, but true: in March of this year, a significant number of Belgian employees (whose position allows it) will have been working mostly from home for a full two years. This long period of telework has left its mark on the way companies look at flexibility in their organisation. Notwithstanding the typical hurdles, both employees and employers have experienced the benefits of remote working. Consequently, a lot of companies are implementing a structural ‘work from everywhere’ policy, allowing employees to work abroad for a predetermined number of days per year. The Belgian National Social Security Office (NSSO) has now published their position on how a ‘workation’ (within the EEA and Switzerland) is to be treated in light of the European legislation on social security coordination.
General rules on the determination of the applicable social security system
Within the EEA and Switzerland, the social security legislation applicable to individuals who pursue professional activities in more than one Member State is currently determined by Regulation No. 883/2004. The guiding principle of this Regulation is that an individual is subject to the legislation of the State in which they perform their professional activity; the so-called work state principle. Consequently, an employee is subject to the social security legislation of the Member State in which they work, irrespective of their place of residence or their employer’s business location. If an employee is teleworking in France, they are subject to French social security.
Nevertheless, two general exceptions to this work state principle exist, namely secondment and simultaneous employment. In the case of a secondment, an employee who is temporarily posted by their employer to another country (within the EEA and Switzerland) to perform work on that employer’s behalf, will remain subject to the social security scheme of their home state. In the case of simultaneous employment, an employee will be subject to the social security system of their home country, as long as they spend a substantial part of their working time (i.e. at least 25%) working from their home country.
General rules and workations, a mismatch?
Until now, no official position had been published by the NSSO on how and whether a ‘workation’ would fit within these principles (however, they were used nonetheless). One of the main questions in this respect was whether it was correct to apply the exception relating to secondments in the case of a workation, given the fact that a workation is actually ‘outwork’ (the employee is not working abroad at the request of the employer).
The fog is lifting thanks to clear communication from the NSSO
The NSSO recently published a newsflash in which they reiterate their position on international telework. They indicate that a distinction must be made between the two situations explained below; one constituting a simultaneous employment, the other one a posting. They also recall the principle that remote work must be considered as fully-fledged work and that – in such a scenario – the place of work for the determination of the applicable social security legislation is the physical location where the remote work is carried out.
If an employee resides in one Member State - and works on the territory of another Member State for a company located in the latter Member State - often/regularly works remotely from home, this is to be considered as simultaneous employment and the above-mentioned principles will apply. For example, a French employee (living in France) who is employed by a Belgian company, but who teleworks two days per week (i.e. more than 25% of total working time) from home in France, will be subject to French social security.
The set-up of a workation is, however, to be distinguished from the above situation. In the case of a workation, the posting principles apply, even if the employee is working abroad on their own initiative (and not at the request of the employer). Consequently, a Belgian employee – employed by a Belgian employer – who decides to spend a couple of weeks working in the French Alps after their skiing holiday, will remain subject to Belgian social security. In addition, in the case of an inbound remote worker (where holidays are taken in Belgium), an A1 form based on the posting article, issued by the foreign Member State, will be accepted by the Belgian authorities.
Please note that this is only the position of the NSSO - and thus the Belgian authorities. In each case, the other Member State involved in the cross-border situation should be contacted to check if it also accepts this approach, as positions may vary in other Member States.
Additional key considerations
Many countries have specific compliance (and registration) formalities that may apply to remote working and ‘workations’. Therefore, before allowing employees to pack their bags, we would advise you to consider these additional key points::
Do employees need to obtain an upfront A1 document to work in certain Member States?;
Does the work accident insurance policy cover telework abroad?
Has the company established a clear policy or directives on remote working and ‘workations’ and is there a system of upfront approval?
Are you considering allowing employees to work abroad? Do you have questions with regard to telework abroad or want to know the position of foreign authorities? Could you use assistance in drafting clear policies for your company? Feel free to contact PwC Legal. We are always happy to support you.
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