Teleworking in the EU: new framework agreement on the way

Are you an employer based in the Netherlands and do you employ employees who (partly) work in the Netherlands, but live outside the Netherlands and therefore also (partly) work in another member state, e.g. Belgium? In short, do you employ so-called frontier workers who (tele)work from home?

If so, please note the recently concluded Framework Agreement, which affects the applicable social security system for these frontier workers.

The Minister of Social Affairs and Employment wrote a letter to the House of Representatives on this subject on 6 June. Below, we discuss the main issues from this letter.

The main rule regarding the applicable social security legislation
An employee is subject to the social security legislation of the Member State where he works (Regulation 883/2004). If an employee works in two or more Member States, for example partly at the employer’s office in one Member State and partly from home in another, the applicable social security legislation may change. If an employee works substantially (at least 25%) from the Member State of residence, the employee will be subject to the social security legislation of the country of residence.

For employers, this means that in that case they have to pay contributions in the employee’s country of residence. This may lead to higher contribution costs, but also to a higher administrative burden. For employers, this may be a reason to be cautious about (allowing) employees to work from home if they live across the border.

Transition period
During the corona period, different rules were created for frontier workers to prevent employees working from home from falling under a different social security system. Then, for the period between 1 July 2022 and 1 July 2023 (i.e. it is about to end), a so-called transition period was agreed within the EU. This, to allow member states to come up with a solution to the issues related to social security for frontier workers who (tele)work from home.

Framework agreement
1 July 2023 is getting closer and closer and, in that context, the Framework Agreement on Structural Teleworking was drawn up. The Netherlands has signed the Framework Agreement. Other countries that have signed, or have indicated they will sign, the agreement are:

Germany, Switzerland, Czech Republic, Liechtenstein, Belgium, Luxembourg, Austria, Slovakia, Ireland, Lithuania, Estonia, Norway, Malta, Portugal and Poland.

The Framework Agreement means that, upon request:

• Frontier workers can telework in the State of residence up to 50% of the total working time, without any change in the applicable social security legislation.
• The remaining (minimum) 50% of the total working time must be physically worked in the Member State where the employer is established;
• In this case, the social security legislation of the Member State where the employer is established therefore continues to apply.

Employees or employers wishing to make use of the Framework Agreement can submit an application form to the SVB for this purpose. If no application is made, the main rules of European law (as described in the introduction) will apply.

The application form can be completed and submitted digitally to the SVB from 1 July 2023. Applications may take longer to be processed, SVB has announced. From 1 July 2024, the SVB should be capable of full implementation.

Other recent developments

• Temporary teleworking: separate from the Framework Agreement, a proposal on the designation rules from Regulation 883/2004 on posting: temporary cross-border teleworking is being worked on at European level. Under the proposal, if the conditions for posting are met, the social security legislation of the sending Member State will continue to apply.
• Taxation: The government also wants to consider tax measures to facilitate homeworking by cross-border workers.

We will be happy to keep you informed of further developments in this context. Should you have any questions about the above, please do not hesitate to contact us in the meantime.