Teleworking has become an integral part of today’s working life. Employers are facing the task of determining in advance the consequences of teleworking at a foreign place of residence regarding social security law.
As of 1 July 2023, EU Regulation No. 883/2004 and the recently ratified Multilateral Framework Agreement apply to cross-border teleworking.
Normal rule
According to the normal rule, employees teleworking 25% or more of their working time in their state of residence, which is not the state where the employer is established, will imperatively be subject to the social security scheme of the state of residence.
Special rule
Bilateral Framework Agreements until 30 June 2023
For the countries Germany, Slovakia and Czechia, there were additional Bilateral Framework Agreements in place until 30 June 2023, which permitted teleworking in the foreign state of residence for up to 40% of the working time. Upon request, up to this limit, it was possible for employees to remain subject to the social security scheme of the state in which the employer has their registered office (= employee’s place of work).
Multilateral Framework Agreements as of 1 July 2023
Henceforth, under the new Multilateral Framework Agreement, switching to the foreign social security scheme is only mandatory when teleworking in the foreign state of residence for 50% or more of the total working time. Upon request, employees teleworking between 25% and 49% of their total working time in the foreign state of residence may remain subject to the social security scheme of the state in which the employer has their registered office.
For applications filed until 30 June 2024, the application takes retroactive effect as of 1 July 2023. Applications for A1 certificates filed until 30 June 2023 based on Bilateral Framework Agreements remain valid until the end of the corresponding period.
Important note: The Multilateral Framework Agreement applies only to those EU Member States which sign the Agreement. The information available as at 5 July 2023 is listed below:
- Signatory states: Austria, Germany, Switzerland, Liechtenstein, Croatia, Czechia, The Netherlands, Slovakia, Belgium, Luxembourg, Finland, Malta, Norway, Poland, Portugal, Spain and Sweden
- States intending to sign: Estonia, France, Ireland, Lithuania and Hungary
- States who have not made a binding statement or given their agreement: Bulgaria, Cyprus, Denmark, Greece, Italy, Iceland, Latvia, Romania and Slovenia
As long as certain EU Member States do not ratify the Multilateral Framework Agreement, the normal rule of EU Regulation No. 883/2004 (cf. Point 1) remains applicable. We will inform you about future changes and ratifications.
Overview Telework as of 1 July 2023
| Switching to the foreign social security scheme | |
| 1. Normal rule Article 13 EU Regulation No. 883/2004 |
≥ 25%* |
| 2.1. Special rule Bilateral Framework Agreements |
> 40%* |
| 2.2. Special rule Multilateral Framework Agreement as of 1 July 2023 |
≥ 50%* |
*Percentage of total working time of telework in the other state
Practical tip: If switching to the foreign social security scheme is inevitable, we recommend to draw up a written agreement with the employee to settle these changes. It should be clarified in advance, for example, whether employees themselves can make the payments of the contributions abroad. If no written agreement is signed, the payment obligation regarding social security contributions generally remains with the employer.
