Work from anywhere & business travel compliance guide

All risks around remote work simply explained

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Deep-dive articles

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Nov 2, 2023

The 183-Rule & Work-from-Anywhere

Does one refer to presence days or working days for the day threshold in the company policy?
Nov 2, 2023

The 183-Rule & Work-from-Anywhere

There's been an ongoing discussion on working vs. presence days – and how to formulate it rightly in the company policy in your work-from-anywhere scheme.
Most company policies around remote work abroad include a maximum (30/60/etc.) of sometimes presence days. Other policies only include working days.

Let’s clarify:
Working days are days an employee works abroad for the company – regardless of how many hours the employee did so
Presence days are all days an employee is abroad working and/or for leisure (incl. the weekends & holidays)

This is quite a complex topic.
After all, as an employer, you have little to say on days that the employee is not working. On the other hand, because of the compliance aspects around presence, it is also understandable that companies decide to include a threshold for presence days.

"For compliance, working days and presence days are both relevant as both have legal impacts!"

Why do you need to check “the days spent” in general?

As days have a strong impact on compliance risk factors, such as wage tax, permanent establishment, work entitlement, social security, etc., the employer must be aware of the accumulated presence days per country (see above).

This way, the employer can limit the compliance risk – both for them, but also protect the employee. Another reason to limit the number of days abroad is to ensure office presence. For this, only working days need to be taken into consideration.

Why do also presence days matter for compliance?

While for some dimensions, such as labour law or permanent establishment, (only) working days need to be taken into account, for most risk factors also presence days have a tremendous legal impact. Such as for:

·     E.g. wage tax

·     E.g. social security

·     E.g. work entitlement & registration

To correctly assess the compliance risks, WorkFlex needs to know how long someone is gone, e.g. for Center of Vital Interest Discussions and the 25% rule remainder in home country social security. So not only working more than 183 days in one country triggers compliance risks, but also vacations, business trips, & weekends count into the 183-day rule as well.

Deep-Dive: What is the rationale behind the 183 days?

Whether you manage business travelers, short-term international employees, or remote workers, you have no doubt heard about the "183-day rule".

This rule states – simplified – that an employee will not become taxable in the destination country, as long as his/her overall presence in that country remains below 183 days per year – which can be a calendar year, tax year, or any running 12-month period).

Both globally and domestically, many tax jurisdictions expect an employer (as well as the employee) to track and report non-resident business travel. However, simply applying a "183-day" threshold does not always work to ensure tax compliance.


The OECD commentary says:
Although various formulas have been used by member countries to calculate the 183-day period, there is only one way that is consistent with the wording of this paragraph: the “days of physical presence” method. The application of this method is straightforward as the individual is either present in a country or is not. (Source: Bundesfinanzministerium)

Therefore, the183-day rule refers to presence days (incl. weekends), so business travel, vacation, and workation count in this timeframe. It follows from these principles that any entire day spent outside the State of activity, whether for holidays, business trips, or any other reason, should not be taken into account. A day during any part of which, however brief, the taxpayer is present in a State counts as a day of presence in that State for purposes of computing the 183-day period. (Source: OECD, p.210)

If a double taxation agreement (DTA; German: DBA) bases the 183-day period on the tax year or calendar year instead of a twelve-month period, the days of stay must be determined separately for each tax year or calendar year. In Germany, the tax year corresponds to the calendar year. If the tax year of the other contracting state also corresponds to the calendar year, there are no special requirements if the corresponding DTA is based on the tax year for the calculation of the 183-day period (e.g. DTA-France, DTA-Greece, DTA-Italy). If the tax year of the other contracting state differs from the tax year of Germany (= calendar year), the tax year of the contracting state in which the activity is carried out is decisive.

WorkFlex Solution

To make sure to correctly count the presence days & working days, WorkFlex has integrated the question "Will you be working throughout the entire stay" on its platform.

So, for example, if an employee is 5 days abroad in Italy, but only works 3 days there, he will need to answer with "no" and add the number of days they will be working. This enables WorkFlex to accurately count both working days and days of presence in the destination country.

Nov 2, 2023 will be shut down - How to apply for A1 certificates now?

The clock is ticking ⏰ From March 1st, the entire A1 certificate application system will change. Take action now to ensure your company stays compliant with the switch to SV-Meldeportal.
Nov 2, 2023 will be shut down - How to apply for A1 certificates now?

After 23 years,, which allowed companies to apply for the A1 certificate electronically, is now being replaced in Germany.
What does this mean for companies? When will this change overtake effect? How exactly will the process change for companies? What are the costs for using the new software?
You can find the answers and more in this blog post, so thatHR and companies are optimally prepared for the upcoming shutdown of and the switch to the SV reporting portal on March 1st, 2024. This article also provides a comprehensive insight into the key aspects of the A1 certificate. It also sheds light on why the A1 certificate alone is insufficient to make work and business trips compliant and what compliance risks companies must be aware of.

First of all: What is an A1 certificate?

The A1 certificate, also known as the A1 certificate, is a document that regulates a person's social security rights within the European Union (EU) and the European Economic Area (EEA). It is important for people who work or are temporarily employed in an EU or EEA country. The A1 certificate shows which social security system applies to these persons and prevents them from having to pay into different social security systems twice. Employees, civil servants and the self-employed regularly require an A1 certificate if they are working temporarily across borders within the EU, Iceland, Liechtenstein, Norway, Switzerland or the United Kingdom of Great Britain and Northern Ireland. This applies to both business trips and workations.

How to apply for the A1 certificate in Germany until February 29, 2024:

To apply for the A1 certificate, employers and the self-employed have had to submit the application electronically since 2019. There are two main ways to do this: either they use payroll software such as DATEV or LOGA, which forwards the application in a straightforward manner, or they use the application to submit the application directly electronically. In both cases, the application is automatically forwarded to the responsible social insurance institution.


Shutdown of - what does this mean for companies from March 1, 2024?

After 23 years, ““will be replaced by “SV-Meldeportal”, which enables electronic data exchange with social insurance institutions. Over 500,000 employers carryout around 25 million transactions via every year. Previously, was offered by health insurance companies for the exchange of social insurance notifications.

The SV-Meldeportal allows the electronic exchange of notifications, contribution statements, certificates, and applications for employers and the self-employed. Registration in the SV-Meldeportal is required, preferably with an Elster organization certificate or via the BundID.

From March 1, 2024, the A1 certificate for Germany can only be applied for in the SV-Meldeportal. Use of the portal is free of charge until March 31, 2024, after which a user fee will apply, except for the self-employed.

How exactly will the process change for companies?

The IT Planning Council of the federal and state governments has decided to implement the "Uniform Company Account" based on ELSTER. Companies can set up accounts via the, using the company's tax number. Each company account consists of one or more user accounts that are assigned to individual persons. Upon registration, each user account receives an ELSTER organization certificate by post, which is used not only for the initial registration, but also for each login to the SV-Meldeportal.

From 2024, self-employed persons and employees who wish to use the SV-Meldeportal exclusively for applying for and retrieving A1 certificates can alternatively register and log in via the BundID account. This extended registration in the SV-Meldeportal offers employers secure and user-specific access to the applications and data.

It is important to note that a separate registration is required for each branch, each with its own ELSTER company certificate. However, branches can be merged via mandate management.

In general, data cannot be transferred directly from to the SV-Meldeportal. Every company must register with the SV-Meldeportal. This also applies to companies that previously applied for their A1 certificates via an integration with payroll accounting software - now they have to do this via the SV-Meldeportal. Automatic forwarding of the data is currently not possible. This means a lot of manual work for companies.

A little tip: With the all-in-one software from WorkFlex, you can create A1 certificates within a minute, saving valuable time and money.

Overview of the registration process

The registration process follows these steps:

1. call up the SV registration portal

2. complete registration for use via "My company account"

3. authenticate in the SV-Meldeportal with the ELSTER certificate

4. enter company number and company data

5. receive letter of authorization with activation code by post

6. enter the activation code

7. release the SV-Meldeportal for use

After successful registration, the SV-Meldeportal can be used without restriction. The ELSTER certificate with which the company has registered is required for each login.

What are the costs for using the SV-Meldeportal?

The use of the social insurance notification portal is subject to variable fees that vary depending on the number of company numbers required by the company for the transmission of social insurance notifications. There are two user groups: the single-client variant and the multi-client variant. Reduced fees apply until March 2024. Companies that register before March 31, 2024 are free of charge for the years 2023 and 2024. Fees will apply from January 1, 2025. If you register before this date, the multi-client variant automatically applies, which enables data exchange for several company numbers. In the fall of 2024, users must choose one of the two variants for which a fee will be charged from January 2025. The costs are 36 euros plus VAT for a single company number and 99 euros plus VAT for multiple company numbers, each for a period of 36 months. There is no limit to the exchange of social security notifications.


More data security with the SV reporting portal

The significant difference to is that data security is considerably higher for companies and employees due to registration via the ELSTER organization certificate on the SV-Meldeportal. Other countries such as the Netherlands, Belgium, Sweden and the United Kingdom have already been introducing much more advanced and thorough processes for years to ensure that data is better protected. Germany is now following suit with the SV-Meldeportal.


Apply for A1 certificates with WorkFlex

If you are looking for an uncomplicated and automated solution for applying for your A1 certificates, WorkFlex software is the perfect solution. With our software, you can apply for A1 certificates in less than a minute - without any extra effort for business trips.

Through our integrations with travel booking tools such as TravelPerk, Navan etc., all relevant compliance documents for business trips are automatically generated by WorkFlex - without any extra effort for HR or the business traveler.

If an A1 certificate is required for a workation, the employee only has to enter the relevant data on the platform. This takes about 2 minutes. After the manager's approval, we take care of creating all the necessary documents. With WorkFlex, you can make the A1 certificate process 95% more efficient and save valuable time. It also minimizes the risk of processing errors - in the event of an error, WorkFlex assumes liability.

German Webinar on the topic:

IMPORTANT: An A1 certificate does not protect against compliance penalties

An A1 certificate alone makes a business trip or workation legally compliant.

Although the A1 certificate is a crucial document for compliance in the case of workations and business trips, it alone is not enough to make a workation or business trip "legally compliant". There are several other compliance risks that companies must check and observe in relation to workations and business trips to avoid high penalties and fines.

Companies are aware of the legal situation concerning business trips. However, the legal situation abroad is often unclear, particularly in the context of the increasingly popular "workations". One challenge is that the relevant laws and regulations were not written specifically for"workations". On the contrary, they were written long before the concept of temporary work abroad even emerged.

In general, companies need to consider all 8 risks individually for each workation or business trip: Establishment Risk, Payroll Tax, Social Security, Insurance, Labor Law, Visa & Work Authorization, Posting of Workers Directive (PWD), and Data Protection.


If you would like to know more details about the individual risks, their complexity, and their legal and tax consequences, please take a look at our Compliance Handbook

- or talk directly to one of our WorkFlex consultants to get a more in-depth consultation tailored to your needs!

Business travel
Feb 27, 2024

Do not mistake business travel for workations

Unravel the crucial differences between workations and business travel and the potential risks they pose. Dive into our article to learn how to safeguard compliance and mitigate the consequences for your business!
Business travel
Feb 27, 2024

Do not mistake business travel for workations

WorkFlex’s current two solutions cover two types of temporarily work from abroad, namely Workation and Business Travel.

The new work horizon made these two distinct yet intertwined concepts prominent. As business travel has long been a cornerstone of professional life. It involves individuals journeying to different locations for work-related purposes such as meetings, conferences, and client visits.  

On the other hand, Workations have been the rising star in employees’ demanded benefits, occupying the second place after salary in recent polls. While there are huge similarities between these two mobile work from abroad, still, it is pretty straightforward to distinguish between them from both employers’ and employees’ perspectives. Complications mainly erupt when employers try to measure and mitigate key compliance exposures for both concepts.  

In this blog post, we'll explore the differences between business travel and workation from an HR and employer perspective, shedding light on what employers need to be mindful of and how to effectively regulate these practices.

How to distinguish between Business Travel and Workation

Distinguishing between business travel and workation is not hard at all as there are multiple differentiating factors such as considering the primary intent of the trip, the duration of stay, the location and setting, work schedule flexibility, expense allocation, the nature of formal business meetings, and adherence to company policies. However, one can say that main determining factors are the sponsorship and trip objective.

Expenses incurred during business travel are generally reimbursed by the employer and are directly related to work activities. However, expenses during workation are typically borne by the employee, as the primary purpose is leisure while it really entails a blend of work and personal enjoyment.  

Intersecting yet different compliance exposures for employers in business travels and workations

Defining and assessing compliance risk dimensions for business travels and workations by employers and HR personnel could be overwhelming and very expensive. Especially, if they want to implement a solution by applying risk mitigating measures for each risk dimension.  

The common regulatory compliance exposures for both business travels and workations could be piled in the following categories:

1- Tax Implications
2- Social Security
3- Labor Law and PWD
4- Work Entitlement
5- Data Protection

Despite the fact that these risk dimensions are common for both solutions, they significantly differ when it comes to its assessment. Tax implications for instance could be stricter for workations and more lenient for business travels, given the fact that BTs usually involve shorter trips than workations. Short-term business travel, such as attending meetings or conferences, usually does not create a Permanent Establishment. Most tax treaties have provisions that exempt short-term activities from triggering PE. Such as Paragraph 6 of Article 5 of the OECD Model Tax Convention which serves as a basis for many bilateral tax treaties. This paragraph specifically addresses exemptions for certain short-term activities.  

On the contrary, work entitlement, labor law and PWD could be stricter for BT and more lenient for workations, given the fact that the main purpose of the workation trip is leisure and the business activities comes as an auxiliary.  

Yet, there are other aspects that must be taken into consideration by employers for each solution separately such duty of care and expense management for business travels and performance management for workations.  

Business Travel: A Strategic Corporate Endeavor

1. Duty of Care: The safety and well-being of employees during business travel is paramount. Employers must establish comprehensive duty of care measures, including emergency assistance and medical support. Also, a travel health insurance is necessary to the extent of being mandatory in this case, especially in case of the absence of a social security treaty between the home and destination country. That’s why Workflex provides a THI to each BT request as soon as it concludes its compliance summary.  

2. Expense Management: Employers shall consider implementing robust systems for managing and reimbursing travel expenses. This includes clear guidelines on what expenses are eligible for reimbursement and a streamlined process for submitting and approving expense reports.


Workation: Balancing Flexibility and Work

Performance Management: One of the employers’ main concerns is clearly define expectations for work deliverables during workation, including deadlines and communication protocols. Also, the time difference plays a vital part in defining communication protocols deliverables in this regard. While HR could assess this on a case-by-case basis in small companies, it is impossible to regulate it in big enterprises. WorkFlex presents the solution in granting the line managers the ability to assess different situations and work expectations for their team members by enabling them to approve or reject employees’ request by a click of a mouse in a robust, automated and time-saving software product.  

In conclusion, finding the right balance between business travel and workation is essential. Most importantly, keeping a robust, efficient system for enabling employees to do both with ensuring compliance and avoiding legal and administrative exposures could be overwhelming.  

At WorkFlex, we don't just assess compliance risks; we proactively implement solutions to ensure a seamless experience for both business travels and workations.

Our comprehensive approach encompasses everything from thorough compliance risk assessments to the issuance of travel health insurance. We go the extra mile by incorporating essential risk-mitigating measures, including Transfer Impact Assessments (TIAs) for robust data protection, detailed visa instructions for hassle-free travel, and social security certificates to address critical regulatory considerations. Moreover, we bear legal-financial responsibility in case a workation or a business travel went wrong.

Check out our brand new “NO TOUCH” business travel solution here.

Nov 2, 2023

Social security treaties: What’s it all about?

Bilateral treaties among countries are quite usual. But what does it mean when they are social security related? And which link do they have with remote work after all?
Nov 2, 2023

Social security treaties: What’s it all about?

What is a social security treaty?

A social security treaty is an agreement between two countries which establishes a common framework to coordinate social security schemes. Thanks to these treaties, it is possible to eliminate dual social security coverage as well as to address issues such as the payment of social security taxes and the transfer of benefits between countries.  

The effects of the treaty materialize once a document is issued by the home country’s authorities. This document (A1 or CoC depending on the country) is the proof of the employee paying social security in their home country and being already covered by that country’s social security scheme.


What is the risk of no social security treaty between countries? How does this impact remote workers?

If there is no social security treaty in place between two countries, employees may end up paying social security premiums in two (or more) countries for the same work and also they might miss the benefits they have earned during the time they have been working from different countries. In other words, the existence of these treaties are a relief from a compliance point of view, the lack of them may be a headache.

In practice, when an employee works remotely from another (destination) country and there is no agreement in place, significant challenges arise. For instance, in addition to the mentioned above, the talent and the employer could culminate in contributing to the destination country's social security system by paying social security premiums.

All in all, in the ongoing new reality of remote work, understanding the nuances of social security agreements is crucial for both employers and employees. This requires certain awareness of the potential consequences and the importance of always being provided with documents like the A1 or CoC.  

Your employees undoubtedly love the freedom to go on workations! To avoid compliance risks, we highly recommend implementing a workation management process. Book a demo with WorkFlex today to see how we can help you streamline this process and mitigate potential risks.


Business travel
Nov 2, 2023

How WorkFlex handles Posted Workers (PWD) notifications

The objective of the PWD is to prevent social dumping, by protecting the rights and working conditions of cheaper foreign workers within the EU.
Business travel
Nov 2, 2023

How WorkFlex handles Posted Workers (PWD) notifications

Posted workers notifications – or PWD notifications, in German EU Meldepflichten – are notifications based on the EU Posted Workers Directive (PWD). These notifications concern registrations of employees who will temporarily be sent to work from a different country, e.g. as a business traveller or expat.

The objective of the PWD is to prevent social dumping, by protecting the rights and working conditions of cheaper foreign workers within the EU. Workationers have privately initiated the trip abroad, thus are not posted and PWD notifications are not required. Belgium is an exception to this, as it has converted the directive in national legislation that includes a broader definition of posted workers. More information in this WorkFlex whitepaper.

PWD notifications are obligatory. Non-Compliance can result in fines up to €500k, as well as non-financial penalties such as multi-year restrictions on doing business in a particular country. How strictly this is enforced varies per country. What also varies per country is the exact content of the registration and the method of filing it with the local authorities. Most countries provide online portals or at least an online process for doing PWD notifications. However, in some countries there is no (online) process for doing them. Also, some countries have made the process so complex that it is practically impossible to do PWD notifications. In Poland, for example, a local registration of the posting (entity) is required and all correspondence has to take place on paper in the local language. An obvious reason fora non-existent or complex process, is that social dumping – the original objective of the PWD – is not very relevant in these countries. Not surprisingly, these countries also hardly enforce the obligation of doing the notifications. As a result, these countries can be qualified as low risk.

Looking at the figure below, the low risk-countries are included on the bottom. In practice, employers do not do notifications in low risk-countries. This also applies to WorkFlex. However, as the figure shows our so-called no-risk coverage does apply for trips shorter from 1 to 5 days, and up to 8 days in Spain. This means that WorkFlex protects clients by reimbursing any fines for not doing PWD notifications in these low-risk countries for most business trips. Above the low risk-countries, the figure shows the other countries where PWD notifications are required. In all of these 24 high risk-countries, WorkFlex always does PWD notifications as part of the trip handling subscription. No additional costs are due. The notification confirmation will be uploaded to the WorkFlex platform. The combination of doing PWD notifications in so many countries and offering no-risk coverage for all other countries, should compliantly cover 98% of all business trips.


Nov 2, 2023

Temporary remote workers qualify as business travellers for VISA/immigration purposes

How should someone who works temporarily from abroad for private reasons be qualified for VISA purposes? Since this is a relatively new topic, regulators never explicitly addressed the temporary remote workers in their VISA rules and regulations. As a result, there is no specific visa or applicable framework for this type of persona.
Nov 2, 2023

Temporary remote workers qualify as business travellers for VISA/immigration purposes

The work of the future is here to stay, working remotely is now part of many people's lives. Many employers are not only adopting national hybrid working models, but also policies that allow their employees to temporarily work from abroad. This last topic is especially interesting, because it raises an important question even before the employee enters the destination country.

"How should someone who works temporarily from abroad for private reasons be qualified for VISA purposes?"

Since this is a relatively new topic, regulators never explicitly addressed the temporary remote workers in their VISA rules and regulations. As a result, there is no specific visa or applicable framework for this type of persona. Generally, VISA rules and regulations provide only three possible “titles” for non-nationals to be in a country: tourism, local employment or business travel. The question is whether these titles provide a suitable qualification for the temporary remote worker, and if so, which one. This question is relevant, because the administrative requirements for entering and being allowed to work in the country can strongly differ per title.

Hereinafter, we will separately discuss the three different titles and specifically address whether they are suited to cover temporary remote workers.

1. Tourism

Most countries specifically exclude any type of paid activity in order to qualify as a tourist. Therefore, it is unlikely that temporary remote workers can enter and work from those countries without further ado. Interestingly enough, this would imply that it is incompliant when employees, during their vacation, check their business email on their smartphone. At the same time, for as far as we know no-one ever made a problem out of this before; neither employers and employees, nor governments and authorities. As a result, one could argue that even tourists are practically entitled to perform some work activities.

Some countries specifically allow tourists to work remotely for their employer in the home country for a limited number of days. Schengen Area countries are examples; foreigners who wish to do some remote work whilst on holiday in Europe can do so with a tourist visa, or visa-free if from an exempt country1. Also, pursuant to the American Customs and Border Protection information centre, it is possible to work remotely for a foreign company with the Visa Waiver Program for a certain amount of time within the US.

However, it seems rather opportunistic to claim that this pragmatic exception applies to temporary remote workers everywhere and always, as their working activities generally are not clearly very limited and highly incidental.

2. Local employment

On the other side of the spectrum, there is local employment. If non-nationals want to (permanently) work somewhere, they generally require a proper work permit. An example is the EU Blue Card. Only with this card, non-EU nationals are allowed to accept a job in the specific EU country that issued the card. Local employment in this regard means a local employment, for a local employer. The employee in this set up becomes a resident of the specific country. In the words of the European Commission, the regulations around EU Blue Cards relate to the conditions of entry and residence of highly qualified non-EU nationals in EU countries.

The key drivers for regulating this area is that countries want to protect both their own citizens and the immigrants.Their own citizens to ensure that their jobs cannot be stolen very easily by immigrants. And these immigrants ensure that they are not brought to a country to work against conditions that are much worse than those of the local population (social dumping). Looking at these two key drivers, it is clear that the rules were not meant to “protect” destination countries from temporary remote workers at all.

It goes without saying that temporary remote workers are not a part of a social dumping scheme. That does not mean that it is theoretically possible that the temporary worker ́s remuneration package would lie below the minimum standards of the destination country. Given that this is really unlikely, the number of cases where this will be the case will be extremely low. These exceptions do not change the fact that temporary work from abroad has nothing to do with social dumping.

Equally clear is the fact that temporary remote workers do not compete for jobs with the local workforce of the destination country. Temporary remote workers already have a job! They continue to work for the employer in their home country, and all of their remuneration continues to be paid and borne by that home country employer. They neither intend to become residents in the destination country, nor do they perform any activities for local businesses.

Whereas qualifying temporary remote workers as tourists is “too easy”, it seems at the same time unreasonable to qualify them as local employees. This would quite often require a local sponsor. In the case of a temporary remote worker, this sponsor is not available unless the home country employer would be willing to register in the destination country too. This is clearly not something that employers, who merely allowed their employees to work abroad for a while, will accept. Additionally, it should be noted that the process for obtaining a VISA for local employment is a lengthy, sometimes also costly, process. This is another reason why, if the conclusion would be that temporary remote workers would officially have to obtain a VISA for local employment, this in practice is likely to only lead to more remote workers going somewhere secretly as "tourists".

3. Business Travel

The third and last title for non-nationals to be in a country is business travel. According to the American bureau of consular affairs2, business travel is defined as trips during which the employee temporarily engage in business activities such as:

·     negotiation of contracts;

·     consultation with business associates;

·     litigation;

·     participation in scientific, educational, professional or business conventions, conferences or seminars;

·     other legitimate activities of a commercial or professional nature.

Similar activities have been considered to lead for the application of a business visa by the Schengen Area countries3:

·     meeting or training at a business unit established in the destination country;

·     purchase and sale of products, business transactions and tenders;

·     attending an exhibition, conference or seminar.

Indeed, as a business traveller, you can do meetings, negotiate contracts and visit clients in the destination country. However, the question is whether "remote work" can be qualified as business travel or not. Of course, the rules are old and were not defined when remote work was at all relevant. Some important hubs for temporary remote workers, such as Spain or Portugal, have overtly stated that they do not have a specific framework for this type of travellers. As such, “performing regular work for your home country employer” is not specifically covered as a work activity under the header business travel.

Nowadays, temporary remote work obviously is relevant, and it is our opinion that business travel comes closer to temporary remote work than tourism (point 1) or local employment (point 2) do. After all, what do business travellers do in between having meetings and client visits? Exactly, regular work activities such as sending emails - which is basically exactly what temporary remote workers do. Employers and authorities never made a problem out of this, so we consider it unlikely that this would change now.

Some governments already unofficially confirmed that remote workers indeed qualify as business travellers for VISA/Immigration purposes. Moreover, we are unaware of any government taking a position against this approach. However, this does not mean that this may not eventually happen. Until this is cleared, the "business traveller" option is the best option available. It is neither “too easy”, nor is it unreasonably strict. It is a workable theory if employees would like to temporarily work from outside of the EU, in these cases where they do not have the nationality of the destination country.

2 U.S. Embassy & Consulates in the UK

3 IND  

Business travel
Nov 2, 2023

Unlocking the Secret Costs of Unmanaged Business Trips

Business travel is rebounding, playing a crucial role in international business expansion. But here's the challenge: HR, Global Mobility, and Compliance teams face challenges ensuring compliance for employees on business trips! Check out our webinar to learn how other employers ensure (or don't) compliant business trips.
Business travel
Nov 2, 2023

Unlocking the Secret Costs of Unmanaged Business Trips

Business travel is rebounding, playing a crucial role in international business expansion, can you relate? 📈 But here's the challenge: HR, Global Mobility, and Compliance teams face challenges ensuring compliance for employees on business trips!

Managing PWD notifications, invitation letters, PE and social security risks, and tracking employee travel details can be overwhelming. But neglecting compliance can result in costs of up to EUR 50 million and damage to your brand.

Check out our exclusive webinar on Business Travel Compliance!


Together with industry experts we discussed:

👉 What's the most frightening situation a company can face in relation to business travel compliance breaches?

👉What are the strictest countries in terms of business travel compliance?

👉 What are some effective strategies to mitigate business travel compliance risks in your company?

👉 And more.

Our esteemed experts:

*All statements and opinions represent their own, not their employers.

Nov 2, 2023

Leaving continental Europe... risk alert?

Explore the nuances of European territories for workations and business trips, including outermost regions and overseas territories. Understand the distinct legal frameworks and potential challenges involved in tax, social security, labor law, and visas.
Nov 2, 2023

Leaving continental Europe... risk alert?

There are many employers who allow workations within the European Union (EU) as they often entail less risks than flying to a third state. However, there are territories for which it’s unclear whether the same rules than in continental Europe apply. We’ll dive deeper into the distinction of workations and business travel-related compliance risks in outermost and overseas territories such as Azores (PT), Aruba (NL) or French Polynesia (FR).

There are over twenty territories located around the globe in the Atlantic, Antarctic, Arctic, Caribbean, Indian, and Pacific regions whose status is often a matter of concern for the employer allowing their employees to work from “anywhere in Europe”. Due to historical and geographic reasons, assessing if a territory is part of the EU or not and which rules apply in such territory may be more complex than expected.

Luckily, the European Commission sheds some light by making the following categorization within the territories located outside of its continental borders:

Outermost regions

Territories that are integral parts of the EU and its single market. These nine outermost regions, even though located far from continental Europe, are considered an extension of their respective member states and benefit from the rights and obligations that come with EU membership. Hence, EU law applies fully and uniformly, just like in any other region within the EU. The archipelagos of the Azores (PT) and Canary Islands(ES) are examples of this. More info can be found here.

Overseas countries and territories (OCTs)

Territories that have a special relationship with an EU member state (namely Denmark, France, and the Netherlands) but are not part of the EU as such. Unlike the outermost regions, OCTs do not have full EU membership, and EU law does not automatically apply to them. However, OCTs maintain a relationship with the EU through various agreements and arrangements established between the EU and the respective member states. They are all islands such as Greenland (DK), Aruba (NL), or French Polynesia (FR). You can find more information on the EU overseas territories here.

This categorization means that territories can be covered (or not) by double tax agreements and social security treaties. For instance, Aruba (NL) as an overseas territory would not be covered by most of the treaties signed by the Netherlands, while Azores (PT) would actually be considered as Portugal for any legal matter and all the potential risks that a workation or business trip could trigger would be the same in continental Portugal than in the islands.

In a nutshell, not all the territories outside of continental Europe are the same concerning tax, social security, labour law, social security, and VISA matters. As a general rule, outermost regions do not generally entail the same challenges as overseas territories. However, a case-by-case assessment is always required, and it’s important that the potential risks are managed. This is why WorkFlex performs an individual risk assessment of each workation request and generates relevant documentation such as employer statements, PWD registrations, and employee instructions among others. This way, both the employee and the employer can comfortably enjoy a workation slightly further from continental Europe.


Nov 2, 2023

Temporary remote workers do not qualify as Posted Workers in the meaning of the EU PWD

Discover the challenges and compliance issues faced by employers when dealing with remote work and workations. Learn about the impact of regulations and directives like the Posted Workers Directive.
Nov 2, 2023

Temporary remote workers do not qualify as Posted Workers in the meaning of the EU PWD

Pieter Manden is the Co-Founder of WorkFlex and former Head of Trust & Employer Compliance at WorkMotion. He is a Dutch certified tax lawyer specialising in compliance around modern mobility. Pieter has 13 years of professional experience with PwC in the Netherlands and Germany. He was Director responsible for the PwC Germany's Remote Work proposition prior to joining WorkMotion in January 2022.
Gonzalo Corrales Cortes is a Senior Associate Tax & Legal at WorkFlex. He is a Spanish law graduate, specialising in international tax. He enjoyed his international education in Spain, France and the Netherlands. He has working experience in both France and Belgium, where he started his career with Deloitte. Gonzalo is currently enrolled in a Legal Practice Master's program to obtain a certification as a lawyer in Spain.

1. Introduction

In recent years, especially after the COVID-19 pandemic started in 2020, remote work has become a reality for many people. The number of employees working remotely is increasing and is likely to continue to do so in the future. This also means that employees will not necessarily work from their resident country all the time, but possibly from other countries too as part of a so-called Workation (a combination of work and vacation). Especially in this international setup, several employer compliance topics must be addressed, including immigration, social security or tax.

With remote work being such a relatively new concept, it was not in the back of the minds of the regulators who were working on work-related issues. An example of this is the Directive 96/71/EC of the European Parliament and the Council of 16 December, also known as the Posted Workers Directive (PWD). The PWD prescribes that employers, amongst other things, need to notify local authorities if they have posted an employee from the employment country in the specific destination country. This is a significant administrative burden that employers prefer to prevent. In this regard a question that we are often being asked is:

Do temporary remote workers qualify as posted workers in the sense of the PWD?

2. Definitions

Temporary remote worker

An employee who works outside the country of employment on a temporary (<183 days) basis, without this trip having any business reason or purpose. The employer has allowed the employee to temporarily work outside the country of employment, but this trip is entirely privately driven.

Posted worker

An employee who, for a limited period, is sent by his/her employer to carry out a service in an EEA member state other than the state in which he/she normally works, in the context of a contract of services, an intra-group posting or a hiring through a temporary agency.

3. Conclusion

We are of the opinion that this question should be answered negatively. Temporary remote workers do not qualify as posted workers in the sense of the PWD.

The fact that some of the PWD´s translation into national law is somewhat ambiguous, does not change our conclusion. In our view, neither the EU nor the specific countries had the ambition to cover temporary remote workers under these regulations. The aforementioned leads to the implication that we find that no PWD notification duties arise related to temporary remote workers.

Hereinafter, we elaborate on the arguments in favour of our conclusion, some grey areas and we discuss a future outlook.

4. The aim of the PWD

The objective of the PWD is to protect the rights and working conditions of the posted employees and to address a number of concerns such as social dumping. Following the PWD, the member states are obliged to guarantee to these employees certain rights and conditions of employment that are granted to local workers in the host country.

Remote workers were not initially meant to be covered. Indeed, regarding the objective of the law, they should not even be a subject of concern, because they do not compete with the local workforce, and rights such as assuring the minimum wage of the host country are irrelevant, since remote workers often come from countries where they are paid higher salaries than local ones. At least, it is clear that this is not a situation of social dumping.

The PWD has been enacted into national legislation by all the EEA member states and Switzerland, thus the definition of posting workers can vary and have a broader or more restricted meaning depending on the country. The majority of the time, remote workers are clearly excluded from the scope of these national rules, especially as they do not meet the posting workers main characteristics. By way of illustration, some examples can be mentioned:


According to the Law 45/1999, following which displaced worker is deemed to be the worker, whatever his nationality, of the companies included in the scope of this Law moved to Spain for a limited period of time in the framework of a the provision of transnational services, provided that there is a working relationship between such undertakings and the worker during the period of posting.


The French legislator has enacted the PWD via its Labour Code, defining a posted worker as any employee regularly established and exercising his/her activity outside France and who usually working on behalf of the latter outside the national territory, carries out his/her work at the request of the employer for a limited period on national territory under the conditions defined in Articles L.1262-1 and L. 1262-2.


The PWD is translated into national Dutch law via the “WagwEU”. This law defines posted workers as foreign employees who have been sent to work in the Netherlands for a limited time as part of a transnationalservices agreement. Under such a transnational services agreement, the employees are at the Dutch recipient´s disposal to perform work activities in the Netherlands.

Based on the above, it becomes even clearer then, that remote workers do not fit in the general definitions of posted workers given in most of the member states national law. The reasoning behind is that a posted worker generally provides a transnational service to a specific recipient in the country of arrival (i.e a parent company or a subsidiary belonging to the group), while the employee working remotely will keep providing the service to the same employer regardless of the place of residence. Besides, while a remote worker is in the destination for private reasons, posted workers are being sent to another country at the request of his/her employer to perform some specific tasks in a contracting enterprise.

5. Arguments against: grey areas

On the other hand, it should be noted that due to the different perspectives to implementing the PWD among EEA member states, a few countries have adopted a much more compliance-heavy approach. They seem to have enlarged the concept of posted workers in their local law. Examples are Portugal or Belgium. In these countries, any “work-related presence” may trigger the application of the directive and could cause more administrative obligations for the employer in order to avoid being fined. This approach would also make the country less attractive for the potential workforce looking for a few weeks or months working therein.


According to Belgian national law, a posted worker is an employee that works and was initially hired outside the country but is temporarily working in Belgium.


Following the Portuguese Labour Code, a posted worker is an employee hired outside the country but temporarily working in Portugal in the context of acontract of services, an intra-group posting or a hiring out through a temporaryagency.

As such, in the case of Belgium the local implementation of the PWD seems to have a broader sense than other countries. This is also true for the UK, where employees have certain minimum statutory rights from day one. This can be a complicating factor, particularly if a dispute or termination scenario arises and the employee asserts that they have employment rights in another jurisdiction… While in Portugal it could be easily argued that the context is not the performance of a service due to a specific contract but the validity of the same contract with the same employer.

Although in practice these countries have differentiated between posted workers and temporary remote workers situations, by not imposing the PWD rules to privately driven individuals. This was confirmed by local tax authorities upon our request, it has however not been published as an official statement (yet).

Additionally, it is undeniable how the treatment of both posted workers and remote temporary workers remains the same in some specific areas such as Social Security or VISA/immigration law.

Concerning Social Security, it should be kept in mind that when a company posts employees into other EU countries on a temporary basis, most of the time they remain insured for social security purposes in the country where the company business is located. In these cases, an A1 certificate or a CoC (Certificate of Coverage) should be issued. An A1 certificate of coverage is an European form that states the country in which a worker is covered by social insurance. Regardless of the travel reason (privately driven employees or employees sent by their employers), employees must always be covered by social security since in order to protect both employer and employee, there should be a way to certificate their coverage during the stay abroad.

Related to immigration law, when non-EU member state employees are posted into an EU country, they need both a visa and work or resident permits. So do remote workers when they visit third countries, as a result of the performance of services abroad they need a business visa to travel instead of a tourist one as well as being in possession of a valid work permit if requested in the country.

6. Future Outlook

Even if the disparities are bigger than the similarities, these two concepts may be misleading and can drive the legislator to vaguely apply similar regulations on both cases despite the differences. Elements like who is the actual beneficiary of the services, or the request of the employer to carry out the job in another country have been considered key elements to differentiate these two realities by several authors.

Most of the countries have already openly stated that temporary remote workers are out of the scope of their PWD transposition in national law which provides with an unquestionable flexibility for both employers and employees.

Although, due to the high volume of employees aiming to benefit from some periods working from abroad (that will keep increasing in the upcoming years) and the opportunity that entails attracting migrant talent into our borders, governments and EU institutions proactivity is crucial in order to create an assured and suitable atmosphere for both employers and employees and avoiding regulatory gaps for remote workers aiming to work from overseas. Designing remote work policies that comprehend the harmonisation of member state legal approaches or clarifying complex and unclear points regarding social security would be a nice way to start this journey.

Nov 2, 2023

What does the "perfect policy" for temporary work from abroad look like?

Discover the benefits of temporary work from abroad for employers and employees. Learn how to make it a permanent feature of your employee benefits scheme and stand out as a progressive employer. Click to read more.
Nov 2, 2023

What does the "perfect policy" for temporary work from abroad look like?

Balancing between the employee interest of workations as a benefit on the one hand, and the employer compliance risks on the other hand. How to lay this down in the company policy for temporary work from abroad? What must be in the policy and what not? How would our guests change their policy if they had the opportunity to create it from scratch?


Guest speakers:

  • Sophie Kostka - Head of HR & Culture @ Enpal  
  • Małgorzata Miaśkiewicz - Global Mobility Principal @ Delivery Hero  
  • Sabine Ziesecke - Tax Partner @ PwC  
  • Moritz Gamon - Teamlead People Operations & Services @ IU Internationale Hochschule  

Nov 2, 2023

How to keep you and your employees safe during workations?

Discover the health and occupational risks associated with workations and how to protect yourself and your employees. Learn about liability, insurance, and medical services abroad. Click now for detailed insights.
Nov 2, 2023

How to keep you and your employees safe during workations?

Risks associated with workations

Workation is generally associated with pleasant experiences – employees get the chance to improve their work-life balance, as well as spend time on boosting their mental health and wellbeing. However, we have to acknowledge the fact that health & occupational risks are not eliminated when working from abroad, and both – employees and employers – should protect themselves from those.

Getting some minor injuries when working in the office is not uncommon. The same can happen when workflexing – to name a few of generic examples, poorly designed workstation in your hotel room leading to back injury; the universal slips, trips and falls somewhere on your way to take a work call from the beach! Injuries can also happen in the spare time when taking a walk on the beach, hiking, surfing, or doing other activities.

Employer Concerns

After hearing about these risks, WorkFlex‘s clients often ask:

  • Who is liable in case an accident happens when the employee is abroad?
  • Is travel insurance always needed?
  • Can the travel insurance for workations be the same as for business trips?
  • How should we handle any insurance claims or any other medical issues?
  • Is health insurance included in the A1/CoC?
  • And others.

The concern of who is exposed to paying medical bills in case of an accident while working from abroad is legitimate! Although it might appear that the work to purchase extensive travel health insurance must be conducted by the employee, the legal frameworks stating what is an occupational accident during workations is ambiguous. Therefore, employers might be enjoined to cover the medical expenses if it is deemed as an occupational accident.

To illustrate with an example, one mother required an early emergency delivery of her baby and post-natal treatments while travelling in a foreign country. After being discharged, she is facing a $950,000 bill for medical rehabilitation because she was not sufficiently educated on what is included in her existing insurance of the home country and because she did not procure a suitable travel health insurance (Nelson, 2014).

Another concern is the quality of medical services employees get in case of an accident. The medical insurance coverage we would receive in destinations might not be as broad as expected, even if you carry public or private insurance and your home country has a social security treaty with the destination country.

Coverage without additional health insurance

Can I rely on my public insurance?

It is important to bear in mind that public insurance is only valid in the EU countries, Switzerland, Liechtenstein, Norway, and Iceland. Generally, it is advised to carry the European Health Insurance Card (EHIC) to prove the insurance coverage of your home country’s insurance while travelling abroad. Though public insurance is helpful, will it be able to cover all the different situations you may encounter during your temporary work abroad?


You are a German citizen carrying public insurance and you decide to workflex in France. There will be situations that you encounter where the standard of medical treatment while using your EHIC card will not be the same standard as you experience in Germany.

Scenario 1

If for emergency reasons you  need to seek medical treatment,  you must ensure that the medical facility is under the public health scheme, otherwise the German public insurance will not cover the treatment costs. Even if the German public insurance partially covers the costs, the employee must pay 30% for ambulant care, 80% of the pharmaceutical costs, and 20% of the hospital stay in addition to extra daily charges for the hospital and other co-payments based on the complexity of the treatment. Moreover, it is often required to prepay the treatments in the medical facility before receiving a medical report that can be submitted to the insurance provider.

Scenario 2

If transportation back to Germany is needed for medical reasons, this type of insurance will not cover you – getting this service would imply tens of thousands of euros to be paid either by you or your employer, depending on the root cause of the emergency! Irrespective of the country where the accident takes place, you should assume paying a significant share of the medical costs yourself.  

But what about private insurance?

Although private health insurance providers are required to provide coverage to the insured for at least one month globally, the actual length of the coverage depends on your provider and the insurance conditions might differ to the home country’s standards (see here for an overview of German private insurance providers and their restricted travel policies). However, employees have the option to purchase additional policies to amplify the existing insurance scope. The employee should also assess whether a separate foreign travel health insurance is recommended based on deductibles. These would need to be paid in case of a compensation claim and whether medical repatriation is included. Furthermore, many private health insurance providers reimburse a portion of the premiums if no claims have been submitted in a year. If that is the case, it is advisable to purchase a separate travel health insurance to safeguard the bonification.

To sum up, coverage of workations with existing insurance, either public or private, is indeed extremely complicated. There are a myriad of different rules across all the insurance providers that also depend on the destination of your choice. Moreover, it is important to remember that acquiring an A1 certificate or a Certificate of Coverage (CoC) from the insurer that’s needed for workflexing trips does not address your health insurance needs.

Ultimately, to contain your  financial risk and save effort on researching the local insurance conditions for a destination country, one should procure private travel health insurance to workflex abroad.

Reduce employer & employee risk with a dedicated workation insurance

Injuries abroad can get expensive – not only emotionally, but also financially. Knowing that this pain could be the responsibility of both employee and employer, it’s definitely worth it to hedge the risk by purchasing specific workation insurance packages for each employee.

To minimise the employer and employee risk of potentially paying the medical expenses for the employee, WorkFlex has partnered with Hallesche Krankenversicherung a.G. This provides comprehensive travel insurance for employees temporarily working from abroad using WorkFlex.

With this new feature, WorkFlex has added another layer of safety – travel health insurance for your employees’ workflexing trips.

What’s covered by WorkFlex’s insurance feature?

  • Unlimited medical coverage to suit your and your employee’s needs while in a foreign country, including any emergency situation in any clinic, dental treatments, cases of Covid-19 and medical repatriation
  • No restrictions on home & destination countries: Many insurance providers have great restrictions on countries their packages cover. With the WorkFlex solution there are no restrictions on home & destination countries eligible for the insurance package
  • Easy-to-use & integrated with WorkFlex platform for a seamless and easy application
  • No administrative burden: The WorkFlex team takes care of applying, communicating, and managing the insurance package throughout the whole trip period.
  • Comprehensive & easy-to-grasp guide of the insurance policy provided for the employee and employer. Hallesche Krankenversicherung also provides 24/7 phone and email support for any questions about the insurance coverage or assistance while abroad under 0049 711 66 03 39 30 in 25 languages.

If you want to learn more about WorkFlex’s new insurance feature, feel free to book a demo or reach out to your WorkFlex consultant!


Nov 2, 2023

Can local labour law become applicable to remote workers enjoying a workation?

Learn about the compliance risks surrounding workations and how labor law regulations apply to them. Discover the good news and bad news, and what it means for you as an employer.
Nov 2, 2023

Can local labour law become applicable to remote workers enjoying a workation?

Dr. Martina Menghi is the Manager for Trust & Employer Compliance at WorkMotion. She is an Italian attorney at law, holding a double degree in law (Italian and French). Prior to joining WorkMotion in August 2022, she worked at KPMG Law in Germany for four and a half years, focusing on international labour law and posted workers obligations, which was also the topic of her PhD thesis.

Pieter Manden LLM MBA is the Co-Founder of WorkFlex and former Head of Trust & Employer Compliance at WorkMotion. He is a Dutch certified tax lawyer specialising in compliance around modern mobility. Pieter has 13 years of professional experience with PwC in the Netherlands and Germany. He was Director responsible for the PwC Germany’s Remote Work proposition prior to joining WorkMotion in January 2022.

I - Executive Summary

It deserves upfront mentioning that the existing labour law regulations have been adopted several years ago and have not been shaped around workations. Rather, they were designed having business travellers and posted workers in mind. Workationers’ are not only a new phenomenon, their situation is also fundamentally different given the lack of a business purpose in the destination country.

After having analysed the applicable rules, we have come to the conclusion that there is good and bad news. Starting with the bad: in principle, there are indeed some labour law provisions of the destination country that might theoretically become applicable. The good news, however: it is extremely unlikely that these provisions will in practice really be applied by a local judge.

The reason for this is twofold. First, only a judge in the destination country can determine that so-called “overriding mandatory provisions” in the destination country are applicable. This implies a litigation where the local judge actually considers itself competent. This last point is unlikely, given that a home country employment contract is in place, the home country remains the habitual place of employment and the stay in the destination country is limited in duration.

Second, according to EU law the “hard-core provisions of the country of habitual employment” remain applicable also to international situations. Hard-core provisions essentially concern the following aspects such as minimum wage, working hours, and paid leave. This means that the aforementioned judge would only be able to apply “overriding mandatory provisions” in the destination country on topics which do not make part of these fundamental, hard-core provisions in the home country. It is safe to say that this is so unlikely, that in practice local labour law provisions will have no impact on workations.


II - Abstract

This article deals with the complex question of determining which employment law is applicable to remote workers enjoying Workations within the EU. Pursuant to Regulation 593/2008, the principle is the parties’ choice. However, even if employment contracts regularly specify which law is governing the employment relation, in cross-border situations the employee benefits of special protection. In fact, working abroad might trigger the application of the employment law of the destination country, notably concerning two categories of rules: the provisions that cannot be derogated from by agreement (1) and the overriding mandatory provisions (2). Unfortunately, both categories are not defined in the EU legislation and national courts are left to define them according to national law.

Provisions belonging to the first category, mainly considered as those on minimum wage, health and safety and working hours, are those of the state in which or, failing that, from which the employee habitually carries out his/her work in performance of the contract. In case it is not possible to identify the habitual place of work, residual criteria apply.

Further, provisions belonging to the second category must always be applied by national courts, regardless of the law applicable to the employment contract. Legal scholars often disagree on categorisations and interpretations of which rules belong to this category. However, the European Court of Justice confirmed that these provisions must be interpreted strictly. The provisions of the destination country concerning some specific matters are “overriding” for posted employees during postings, applicable regardless of the law governing the employment contract and regardless of the posting duration. However, a number of arguments speak in favour of not equating remote workers on Workations to posted employees. In particular, the constitutive elements of posting are lacking from our remote work scenarios, i.e. service provision and host entity.

However, given the fact that the posted worker directive defines the “hard-core” of posted employees’ protection, it makes sense to look closer at those provisions and ask whether these would be applicable to remote workers as well, given their protective nature. Even though it is important to take into account that common rules exist at the EU level for all these hard-core matters, a closer look to these topics lead us to the conclusions that the most potentially problematic aspects might be the salary, given the fact that this is the matter where the highest discrepancies exist among Member States. At the same time, it is worth noting that there is no evidence that hard-core rules would be considered as overriding provisions for remote workers in the destination country.

To summarise: even if a risk of application of some destination country employment law provisions exists, it appears strongly mitigated in case of workations.

III - Position Paper

Can local labour law become applicable to remote workers enjoying a workation?


The aim of this paper is to highlight the criteria to take into account when performing a risk assessment concerning the applicable employment law to remote workers temporarily working from abroad. These are employed in a State (Home State) and during a so-called “Workation” (an employee benefit, a combination of work and vacation) are working in another one (Host State). We will refer to them simply as “remote workers” throughout this paper, according to the definition below - even though this term does not reflect the temporary character of the international stay, which is clearly an important aspect. Remote work occurs when employees find themselves in a situation where the below cumulative requirements are met:

  • The employee works outside the Home State on a temporary basis (where “temporary” is generally being defined as below 183 days per calendar year);
  • The employer has allowed the employee to temporarily work remotely outside the Home State;
  • The trip does not have any business reason or purpose, i.e. there is no initiative nor need of the employer at the basis of the trip, the trip is entirely privately driven;1
  • The employee does not give up the residency in the Home State.

The paper focuses on the legal framework in EU law, given the fact that there is a legal source and the majority of WorkMotion clients are European.

It does not intend to analyse national specific rules, if these exist.3 Some national laws are only mentioned through examples and illustrations of practical implementations. However, given the current legal framework, it should be possible to identify some common rules for remote workers on the territory of Member States.

The rules that will be analysed were adopted before the Covid-19 Pandemic and the “explosion” of remote work during and following this. As a result, the rules were never designed with the current reality in mind, which leads to an ambiguous situation. At the same time, clearly remote work did to a certain degree also exist prior to the pandemic. Take Mario as an example: he is an associate at a big German law firm dealing with mergers, projects that usually take months. The negotiations of a new project start after Mario has booked his vacation to Greece. If he is lucky enough to still be allowed by the law firm to leave for vacations, instead of having to cancel it at the last minute, what would be the most likely outcome?

During the vacation in Greece, Mario would most likely have to constantly be looking at his mobile phone and reading and sending emails, in order to catch up and understand what is going on during his (physical) absence from the office. This might raise many questions: would such a situation potentially justify the application of Greek employment law? Is he considered on a business trip, or does he even qualify as a posted employee? It seems that these questions were not considered as vital, before the advent of remote workers.

Potential Conflicts of Law

Not surprisingly, in situations characterised by some degrees of “internationality”, such a cross-border dimension (employment in the Home State, temporary remote work in the Host State) presents potential law conflicts. One of the main risks is notably that the Host State’s employment law becomes applicable. This has some very relevant practical implications. Amongst others, the following questions need to be answered: which minimum wage standards must be applied to the employees, those deriving from the law of the Home State or the Host State? Which law determines the maximum working hours, the minimum rest periods and the annual holidays?

It is therefore crucial to identify, with certainty, the applicable law to the employment relation. In EU law, it is possible to seek the relevant answers in Regulation (EC) No 593/2008 of 17 June 2008 on the law applicable to contractual obligations (Rome I) (hereafter “the Regulation”). This is an instrument of “universal application”, meaning that any law specified in it shall be applied, whether or not it is the law of a Member State, as stated in its Article 2.

The Regulation’s general objective, as announced in Recital 16, is legal certainty in the European judicial area. The foreseeability of the substantive rules applicable to contracts must not be affected.

1. The parties' choice (Art. 8 (1))

As a preliminary observation, the employment contract belongs in principle to the private law sphere. This means that, like in all private law contracts, the parties’ will is crucial and therefore they are able to choose which law shall be applicable.

Employment contracts usually specify which law shall govern it, so this is expected to be the most common scenario.

However, the employment contract is indeed a peculiar one, where one of the two parties (the employee) is facing a situation of weakness if compared to the other party (the employer). If we consider the negotiation power, it is clear that the employee is de facto in the position of having less room for manoeuvre and flexibility than the employer.

Therefore, the Regulation adjusts this unbalanced situation, by providing the employee with some further protection. It establishes, in Article 8 (1) as a general rule, that an individual employment contract shall be governed by the law chosen by the parties. However, it also specifies that such a choice of law may not have the result of depriving the employee of the protection afforded to him/her by provisions that cannot be derogated from by agreement under the law that, in the absence of choice, would have been applicable to the contract.

It becomes decisive to answer the following question: how to identify the law that, in the absence of choice, would have been applicable to the contract? Some authors refer to this law as the “objective law” of the contract.

2. Problem 1: identify the habitual place of work (Art. 8 (2))

The main criterion is laid down in in Article 8 (2) of the Regulation: “(t)o the extent that the law applicable to the individual employment contract has not been chosen by the parties, the contract shall be governed by the law of the country in which or, failing that, from which the employee habitually carries out his work in performance of the contract.” Throughout the text we will refer to the “country in which or, failing that, from which the employee habitually carries out his work in performance of the contract” simply by using the expression “habitual place of work”.

The same provision also clarifies that the country where the work is habitually carried out shall not be deemed to have changed if the employee “is temporarily employed in another country”.

It is relevant from the beginning to notice that a regular workation, meeting the criteria defined in our introduction, is very unlikely to change the habitual place of work of the employee.

In this context, it is essential to define the adverb “temporarily”.

According to Recital 36 of the Regulation, “work carried out in another country should be regarded as temporary if the employee is expected to resume working in the country of origin after carrying out his tasks abroad.”

Article 8 has as objective to ensure, as far as possible, compliance with the provisions protecting the employee that are laid down by the law of the State in which that employee carries out his/her professional activities.

For the sake of completeness, it is worth mentioning that the “habitual place of work” is not the only criterion provided by the Regulation. In fact, in some cases it is not possible to determine it. Art. 8 (3) states that, in such cases, “the contract shall be governed by the law of the country where the place of business through which the employee was engaged is situated.” Further, according to Art. 8 (4) “(w)here it appears from the circumstances as a whole that the contract is more closely connected with a country other than that indicated in paragraphs 2 or 3, the law of that other country shall apply.”

It is important to point out that these last two paragraphs (3) and (4) are residual to paragraph 2 and therefore the criterion of the country where the employee is “habitually” working is the privileged one, having priority over the others and to be interpreted in a broad sense.

Only if it is not possible to identify the country where the work activity is habitually carried out, it will be admitted to look at the place of business through which the employee was engaged and at the closest connection to another country.

According to the CJEU, “it was the legislator’s intention to establish a hierarchy of the factors to be taken into account in order to determine the law applicable to the contract of employment.”

Therefore, in our analysis we will mainly focus on the dualism between, on one hand, the “country where the employee habitually works” and, on the other, “country where the employee is temporarily on Workation”. We assume that ideally it shall be possible to identify, and if necessary to distinguish, between the two countries.

The core notion lies undoubtedly in the definition of the adverb “habitually”. The question is how to identify it? Unfortunately, there is no definition in the Regulation. In some cases, it seems easier to define it than in others.

In the lack of a definition of “habitually” in the Regulation, we are facing a notion characterised by “flexibility”. Such flexible notions are actually quite common in the EU law and have the advantage of being used in several legal contexts, enabling the Court of Justice (”CJEU”) to fulfil the notion, by giving an interpretation of their content and their limits.

It might be at first sight disappointing, but, according to the Court, there is no duration that can be taken as a standard reference. This might seem as a disadvantage, but it is actually comprehensible. The identification of the “habitual place of work” is not limited to a matter of countable and definable duration.

It is not possible to answer straightforwardly to the question “How long does an employee have to work in a place before it becomes his/her habitual place of work?”, simply because time worked in a given workplace is not the only factor enabling the assessment of the place of employment.10 There are many other factors to be taken into account.

The CJEU indicated some useful criteria11for identifying the country of habitual place of work performance, including:

  • the actual workplace (in the absence of a “centre of activities”, the place where the employee carries out the majority of the activities);
  • the nature of the activity carried out;
  • the elements that characterise the employee’s activity;
  • the country in which or, failing that, from which the employee carries out his/her activity, or an essential part of it, or receives instructions on his/her tasks and organises his/her work activity;
  • the place where the work activity tools are placed;
  • the place where the employee is required to present himself/herself before carrying out his/her duties or to return after having completed them;

The Court of Justice specified that the notion of “habitual place of work” “must be interpreted as meaning that, in a situation in which an employee carries out his activities in more than one State, the country in which the employee habitually carries out his work in performance of the contract is that in which or from which, in the light of all the factors which characterise that activity, the employee performs the greater part of his obligations towards his employer.”

Furthermore, there can be situations in which the place where the employee performs the greater part of his/her obligations towards the employer is particularly complex. This is illustrated by case law before the CJEU. The Court took the opportunity to specify first of all that in case of a contract of employment under which an employee performs for his employer the same activities in more than one Member State, it is necessary, in principle, to take account of the whole of the duration of the employment relationship in orderto identify the place where the employee habitually works. Failing other criteria, that will be the place where the employee has worked the longest.”

However, this consideration is intended to play a role only where it will not be possible to use the other criteria listed above, such as the actual workplace, the nature of the activity carried out and so on.

It has been pointed out, as a general rule, that occasional tele-work should in principle not affect the identification of the habitual workplace. For example: an employee that habitually works in Germany and for a 6 month-period during pandemic, worked full-time from another EU Member State (e.g. Austria). Whether his/her employment contract stipulates that German law is applicable or not, German law will govern the contract.

Once the country of the habitual place of work of the employee has been identified, it is necessary to look at the provisions that, according to the law of this country, cannot be derogated from by agreement, since those will have to be applied to the employment contract of the employees, even if these employees work remotely in another country for some time.

3. Problem 2: identify the provisions that cannot be derogated from by agreement (Art. 8 (1))

A recent decision16 of the CJEU offers a very comprehensive overview on the law applicable to the employment contract, which is worth summing up.

The Court ruled that the correct application of Article 8 of the Rome I Regulation requires the following steps to be accomplished:

  1. In a first step, that the national court identifies the law that would have applied in the absence of choice (namely: that of the habitual workplace) and determine, in accordance with that law, the rules that cannot be derogated from by agreement;
  2. In a second step, the national court has to compare the level of protection afforded to the employee under those rules with that provided for by the law chosen by the parties;
  3. If the level of protection provided for by those rules is greater, those same rules must be applied.

Unfortunately, the Regulation does not give a definition of “provisions that cannot be derogated from”. This means, as confirmed by the Court, whether a provision belongs or not to those that cannot be derogated, will have to be decided according to national law: “The referring court must itself interpret the national rule in question.”

A case-by-case analysis becomes necessary. However, the CJEU had the opportunity in several judgements to clarify, in practice, some guidelines. According to the Court’s interpretation, the provisions in object “can, in principle, include rules on the minimum wage”.

Further, rules concerning safety and health at work, protection against unlawful dismissal, as well as rules on working hours are some relevant examples, coming from national jurisprudences, of rules that have been considered as “provisions that cannot be derogated from by agreement” by national courts.

Since it is extremely unlikely that the Host State will become the habitual place of work for remote workers, this second problem is just as unlikely to materialise. The provisions that cannot be derogated from by agreement (Art. 8 (1)) applicable to remote workers, will be in fact the ones of the Home State.

Once the Home State has been identified as the habitual place of work and its provisions that cannot be derogated from by agreement, is it possible to completely exclude the application of the Host State employment provisions?

4. Problem 3: identify the overriding mandatory provisions (Art. 9)

Article 9 of the Regulation refers to the “overriding mandatory provisions” of the Host State: “The Regulation shall not restrict the application of the overriding mandatory provisions of the law of the forum.”

“Because of their importance for the State that has enacted them, such provisions must be observed even in international situations, irrespective of the law governing the contract under the normally applicable choice-of-law rules of the Regulation.”

Their respect is regarded as crucial by a country for safeguarding its public interests, such as its political, social or economic organisation. They are applicable to any situation falling within their scope, irrespective of the law otherwise applicable to the contract under the Regulation.

The difference between, on one hand, overriding mandatory provisions and on the other, those analysed under the previous section, namely the “provisions that cannot be derogated from by an agreement”, based on Art. 8, is actually not of immediate comprehension.

Unfortunately, the Regulation does not give a definition of overriding mandatory provisions (likewise to the previous article dealing with the provisions that cannot be derogated). Again, a case-by-case analysis is necessary.

The only specification from the legislature is to be found in Recital 37 of the Regulation, where it is stated that the two categories of rules shall “be distinguished”. In particular, those of Art. 9 should be construed more restrictively: “Considerations of public interest justify giving the courts of the Member States the possibility, in exceptional circumstances, of applying exceptions based on public policy and overriding mandatory provisions”.

These two categories of provisions have complementary purposes: Art. 8 seeks to avoid that the general principle of “freedom of choice” of the law applicable to the employment contract will diminish the protection of the employee working in the Host State. Art. 9 aims to enable the Host State to safeguard its public fundamental interests, by applying its core overriding rules to all contractual relations executed on its territory, regardless of the applicable law.

In other words, the application of provisions that cannot be derogated from by agreement can be avoided (for instance because the habitual place of work is not in the Host State), while the overriding mandatory provisions are always applicable.

As a derogating measure, Art. of the Rome I Regulation must be interpreted strictly. National courts, in applying it, are not intended to increase the number of overriding mandatory provisions applicable by way of derogation from the general rule set out in Article 8 (1) of the Regulation.

“In considering whether to give effect to the provisions, regard shall be given to their nature and purpose and to the consequences of their application or non-application”.

It has been observed that due to its exceptional nature as “derogating measure”, the practical importance of Art. 9 should not be overestimated.31It is possible to identify overriding mandatory provisions in different legal areas (A). When it comes to employment law, there are currently not numerous available examples (B). Provisions concerning posted workers are considered to be part of this category. However, we will argue that remote workers are not to be considered as posted employees (C).

A. General examples of overriding provisions

As stressed out, it is not easy to establish whether a provision is mandatory or not. In some cases, it is directly stated in the provision itself. Some illustrations can be found in different areas of the law, such as family law, property law or public law. Unfortunately, this is seldom the case.

Indeed, the CJEU's decisions “giving effect to foreign overriding mandatory provisions, as allowed by Art. 9 (3)” are particularly rare.34 Failing such an indication, it is a matter of interpretation, to be decided by examining the content of the rule and its underlying policy under domestic law.

It is worth mentioning the prevailing opinion in the German academic interpretation stating that “a clear distinction should be made between the mandatory norms pursuing public goals and those protecting individual interests”.

On the one hand, there are rules interfering with contractual law (named after the German verb “eingreifen”, to interfere, (“Eingriffsnormen”)), in order to pursue public interests. On the other hand, there are rules aiming to preserve and even re-establish a balance between the contract parties and the interests of some specific categories of individuals (e.g. the employees).

This methodology leads to the conclusion that employee's protection does not fall under the scope of overriding mandatory provisions.

This is not only a scholars’ view, it has been confirmed by German courts as well. In this sense, the protection of employees would not be considered as within the scope of Art. 9. A renowned case law did not apply it to a dismissal litigation. The German Federal Labour Court (“Bundesarbeitsgericht”), refused to apply a number of German rules protecting employees against abusive dismissal.

“It is highly debatable whether Art. 9 also covers mandatory rules that are designed to protect certain categories of individuals, in particular weaker parties, such as consumers, employees, tenants, commercial agents, franchisees, etc.”

However, there are also scholars promoting a different approach, according to which “rules aimed at the protection of individual interests can also qualify as overriding mandatory provisions”41 by arguing that “although Art. 9 refers to the safeguarding of public interests (...) this provision should not be construed as implying an a priori exclusion from its scope of all norms aimed at the protection of individual interest”.

Beyond the different argumentations, the interpretative dispute is still open. This shows that for the moment it is not (yet) possible to answer unilaterally and unequivocally the following question: which norms fall under the definition of overriding mandatory provisions?

B. Employment law overriding provisions

As mentioned previously, currently there are not many guidelines in this area and each national court is thus able to establish which national measures must be considered as overriding.

At the national level, a decision of the French State Council (“Conseil d’État”) is considered as “the leading case related to overriding mandatory provisions”.44It stated that a company employing more than 50 employees in France must establish an employee representative committee, even if the lex societatis of the company was Belgian law.

The Supreme Court of Luxembourg ruled that the jurisdiction of the Luxembourgish courts was mandatory regarding employees working on Luxembourgish national territory. Such jurisdiction could not be derogated by a choice-of-court agreement.

At the European level, two significant decisions were adopted by the CJEU,46 where it was recognised that “the overriding reasons relating to the public interest which have been recognised by the Court include the protection of workers.

It is in theory conceivable that a country has “a crucial interest in compliance with a specific overriding mandatory provision in the area of employment law”.48 However, even if an overriding mandatory character can be recognised to employment law rules, it is important to determine to what extent. In fact, they should always be interpreted in compliance with EU law.

According to the most extensive interpretation of Art. 9, national rules having as objective to protect the employee, should be regularly regarded as applicable overriding provisions, even if the employee works in the Host State only on a temporary basis. This would be quite impractical and does not really seem to be supported by any case law at the moment. Even though it cannot be excluded that such an argument might be invoked in the future, this interpretation would clash with the Regulation's wording, according to which they are to be interpreted strictly.

Lastly, it is also interesting to question whether the two categories of provisions - resulting from Art. 8 and Art. 9 - can be cumulatively applied. In other words, whether a provision can be at the same time considered as “non derogable” and “overriding”.51 The discussion seems open and once again, different opinions coexist.52 However, given the Recital 37 suggesting “to distinguish” between them, it seems that a national provision either belongs to one category, or to the other.

C. The (unease) relation with posting of workers rules

According to Recital 34 of the Regulation: “The rule on individual employment contracts [notably the criteria in Art. 8] should not prejudice the application of the overriding mandatory provisions of the country to which a worker is posted in accordance with directive 96/71/EC of 16 December 1996 concerning the posting of workers in the framework of the provision of services”(hereafter: “the Directive”).53In other words, regardless of the law applicable to the employment contract, when employees are posted to a Member State, this has to ensure their protection on its territory. As a result, its provisions concerning specific matters shall always prevail and be applied, for the entire posting duration. These matters are listed in Art. 3 of the Directive,54 constituting the “hard core” of posted employee’s protection.

Through a nucleus of mandatory rules for minimum protection to be observed, the aim is to ensure fair competition among service providers, i.e. the employers posting workers in the territory of another Member State. The promotion of the transnational provision of services requires in fact a climate of fair competition.

The respect of posted employees' hard-core protection in the Host State guarantees that the freedom to provide services is exerted in compliance with EU law. This is ensured by avoiding competition distortions, which would take place if the services providers were able to exploit different levels of posted employees protection.

Due to their protective character in the posting context, the hard core provisions of the Host State are to be considered as overriding mandatory provisions for posted employees.

The wording used in the German implementation of the Directive also qualifies the hard core provisions as mandatory.57 The provision clearly expresses its intention to be applied independently from the law of the contract.

Since 2014,58 posted workers must be registered in the Host State. The aim of the registration is to notify the national labour authorities about the presence of posted employees on the national territory and facilitate controls and inspections.

It appears therefore necessary to answer the substantial question whether remote workers are to be considered as posted employees or not. At the moment, the discussion appears controversial and there is no absolute answer, neither in the legislation nor in case law.

However, strong arguments lead to the direction of a negative answer. Two arguments are substantial,61 while the third one is formal.

1. Remote workers are not providing a cross-border service

The provisions referred to as mandatory by the Regulation are those of the country to which a worker is posted. Arguably, this means in the Host State where they are temporarily assigned by the employer. This is not the same situation occurring in case of a Workation. In fact, the remote workers are not “assigned”, they rather travel exclusively because of their personal interest. For this argument to apply, it is fundamental to exclude that the remote worker has any business reason to travel to the Host State. However, no tangible business purpose can be identified in case of remote workers: the trip is entirely privately driven.

2. There is no service recipient in the Host State

The circumstance that the remote worker will be performing activities providing a service on behalf of the Home Company in favour of a host entity might have a relevant impact on his/her qualification as “posted employee”. If the employee will travel for business purposes, the trip may not be considered solely privately driven any longer.

However, no host entity can be identified in case of remote workers.

If a posting is taking place, there is no doubt that the hard core terms and conditions of the Host State will be applicable to the employee, according to Art. 3 of the Directive.

3. Registration formal requirements

Beyond the above-mentioned substantial arguments, there are also practical considerations. Inter alia, several Member States’ posted workers registration forms systematically require a host company to be provided, as well as the “scope of service”. If these fields are not completed, the registration is rejected and/or considered incomplete. In some cases, it cannot even be submitted, as the online portals prevent the registration if some fields are left empty. Further, in some cases, the scope of service has to be selected from a dropdown list. Not surprisingly, the private interest of employees is not listed amongst the possible services options.

In summary, the lack of two constitutive elements of posting (1. and 2.), in combination with the considerations on the registration requirements (3.), are clear indicators that posting rules, including the hard core rules ex. Art. 3 (1) of the Directive are not applicable to remote workers.

Still, this interpretation is shared but not unanimous and clarity through legislation or case law is urgently needed.

Until then, we can only speculate which national employment law provisions will be considered as overriding for remote workers. National courts will have the last word, mainly on a case-by-case approach.

Not even the CJEU appears in the position of questioning whether, in practice, a national law can be invoked as overriding: “it is not for the Court to define which national rules are “overriding mandatory.”

The CJEU is nonetheless entitled “to review the limits within which the courts of a Contracting State may have recourse to that concept.” As such, it is not excluded by a proportionality check.

It is not possible to predict how the CJEU will rule, so here again there is room for speculation. In the context of remote workers, free movement of citizens might also be invoked in the future. This has proven to be one of the favourite arguments of the CJEU, of great importance for European integration, as far as taking place in the established legal limits, notably provided that the employee does not become an unreasonable charge for the Host State. Citizens of the Union shall enjoy the rights and be subject to the duties provided for in the Treaties. They shall have, inter alia: the right to move and reside freely within the territory of the Member States.65

Managing and mitigating risks

Once having given credits to the interpretation according to which remote workers are not to be qualified posted employees, it is possible to hypothesise which national provisions can be considered as overriding and therefore be applicable to them in the Host State. As a starting point, it seems reasonable to take as reference the hard core protection rules for posted employees themselves.66 We will try to find out whether the hard core rules would be applicable also to remote workers, even if we tend to exclude their qualification as posted employees.

By using a “a contrario” methodology, it can be argued that if the Regulation explicitly refers to the mandatory character of posted employee core rules, it was not the legislator's intention to include under this kind of protection the other categories of workers, i.e. the employees that are not posted, but rather belong to a different categories, like, for instance, remote workers.

However, these rules have a protective nature and therefore, it is worth questioning whether they might be invoked as “overriding provisions”.

Two general remarks must be made here: first, the hard core provisions are often matters directly regulated by EU law, as it will be illustrated.69 This mitigates the risks.

Secondly, Art. 9 is applicable in active litigation. A national court will have to determine which national overriding provisions will be applicable to pending cases.

We might observe, this is quite unlikely to happen, in practice, in case of remote workers on Workations.

The remote worker is temporarily abroad by using a benefit granted from the employer, without being assigned. Therefore, the probability for the employee to take legal actions in the Host State against the employer might be quite low. At the same time, unforeseeable circumstances might always occur and the possibility cannot be completely excluded. Further, in principle, even in case there is no claim from the employee, it is important to notice that a number of issues, such as worker safety, maximum hours, or employment discrimination are in many EU Member States considered as “public enforcement,” in the sense that their application is to be taken by national governmental authorities. Each national authority is responsible for either taking action to enforce the rules within its territorial boundaries.

Therefore, it shall be argued that even if the employee does not submit any claim, in case of inspections and controls, employment authorities might, at least in abstracto, question whether the national standards have been respected in the Host State.

De facto, the longer the employee stays in the Host State, the longer is likely to occur an inspection or a control and/or a litigation take place. On the other hand, one might also argue that inspections and controls at work are implemented “randomly”. However, on average, it is quite unlikely they will concern remote workers, working remotely from an airbnb, hotel or at a family house, as empirical evidence shows.

Even when it comes to posted workers controls, for instance, these mainly concern the sectors that are “sensitive” from a social dumping perspective and as such are more frequently objects of national inspections and compliance checks. The best example is the construction sector. Not surprisingly, this is also the sector where the majority of postings arise. To give an illustration, if in the framework of the same projects an engineer is posted from the Polish Home Company to the Netherlands to take part to business meetings with the Dutch client and 5 employees are also posted to carry out their activities on to the construction site, it is more likely than the 5 employees will be controlled by labour authorities rather than the first one.

( a ) maximum work periods and minimum rest periods;

Before analysing whether working hours are to be considered as “overriding provisions”, it is worth stressing out that this problem should not be overestimated. Since working hours are the object of an EU directive,76there are not, with a few exceptions, significant discrepancies amongst the Member States.77 The “European working week” seems to be aligned, on average, at 40 hours per week.78

Even taking into account that there still are differences at the collective bargaining agreement (CBA) level, the average difference oscillates between 35.6 and 40 weekly hours. In addition, it is also unclear whether these agreements are applicable to remote workers in the first place (e.g. non all EU Member States systems have erga omnes effects for CBAs).

Furthermore, when looking at working hours there is quite a discrepancy between theory and practice, as can be seen inter alia in the Euro Surveys on “actual working hours per week”, which show the difference among “statutory” and “effective” working hours worked by the employees in the Member States.

Therefore, working hours might not be such a big concern, in spite of legal uncertainty concerning their mandatory character.

It is interesting to notice a decision recently adopted in France, where the weekly working hours are the shortest in the EU, namely 35/w. The French Court ruled that working hours are not overriding, but rather provisions that “cannot be derogated”. If we look back at the interpretation of mutual exclusion of the two categories, one might reach the conclusion that working hours are mandatory for posted employees, but not for remote workers.

( b ) minimum paid annual leave;

Like maximum work periods and minimum rest periods, this matter is regulated in the EU Directive 2003/88.

According to Art. 7 of this directive, Member States shall grant at least four weeks per year to the employees. Contractual agreements might extend the minimum legal requirement. Even if, like for working hours, there might be differences among Member States, it seems reasonable to scale down the biggest concerns.

Given the fact that minimum paid holidays are usually accumulated per month but have to be taken on a yearly basis, the problem appears quite abstract. It seems rather impractical to admit that the remote worker might claim such entitlements during Workations in the Host State, when the stay lasts significantly less than one year.

( c ) remuneration, including overtime rates;

This is probably the most delicate aspect, given the fact that it is where the biggest differences among Member States exist.

Someone observed that in most all jurisdictions of the world, rules on wage/hour tend to be mandatory and reaching everyone, even guest workers only temporarily working in a host country.

Nevertheless, this argument seems in principle quite simplistic and often contradicted by the reality of an interconnected and globalised world, where business trips, especially of short durations, are still, in spite of the pandemic, quite common.

If, for instance, an employee hired in Milan, Italy, under an Italian employment contract, travels on a 3-day business trip to Stockholm, Sweden, in order to negotiate a contract with a potential client, it is quite unlikely to imagine he/she will invoke the Swedish salary application before Swedish courts, even if this might be higher than his/her in the Home State. Further, it is unlikely that the Swedish court will recognise his/her right to have access to the national minimum wage.

Such a scenario would even raise concerns when it comes to legal certainty, if everytime there is a business trip, employees were able to fully invoke standards of the Host State. As mentioned, fragilization of legal certainty is exactly what the Regulation seeks to avoid.

According to the CJEU, ‘provisions that cannot be derogated from by agreement’ can, in principle, include rules on the minimum wage. Once more, if these rules are covered by Art. 8, they would not be considered as overriding according to Art. 9 of the Regulation.

( e ) health, safety and hygiene at work;

Scholars do not agree when it comes to qualifying occupational health and safety. According to some, “local rules always apply due to the territorial principle”.85 According to another interpretation, health protection is actually part of provisions that cannot be derogated, based on Art. 8.

The discussion around this topic is a good legal exercise, however it remains in the end quite abstract in the EU: health and safety at work is in fact already an harmonised topic, where the standards are regulated in several pieces of EU legislation, such as the Directive of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work (89/391/EEC).

( f) protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, of children and of young people;

For the categories in object, the need for protection is somehow even bigger, since they are not only employees, but also in a particularly weaker situation.

Given the fact that the initiative of Workations lies exclusively in the employees initiative, even if it shall not be excluded a priori, it is hard to imagine remote workers in such situations, able to invoke this kind of protective rules in the Host State.

Here again, the matters are regulated at the European level and minimum standards are shared by EU Member States, as stated in Directive 92/85/CEE.87

( g ) equality of treatment between men and women and other provisions on non-discrimination.

Non discrimination is a “classic” EU topic. The EU rights are build around the non-discrimination principle. Several directives have been adopted to fight against illegitimate discriminations,89 and Member States commonly share the minimum standards.

As illustrated, Member States have a limited discretion in legiferating around the “hard-core” aspects of the employment relations. Therefore, even if differences exist, notably concerning salary standards, their scope should not be exaggerated.

In practice, companies usually have thresholds calculated on the base of duration also for registering posted employees, even if in several countries, posting registration obligations apply as of posting day one. It is a matter of risk evaluation. Therefore, it makes sense to advise companies operating in sensitive sectors, where inspections are most likely to occur (e.g. construction) to be compliant with registration obligations from the very beginning. For companies posting mainly so-called “white collars” a more extensive and tolerant approach might be the best one (e.g. registration only of postings exceeding a certain duration).

This premise is necessary to highlight how, even if there is no doubt that rules concerning posted employees obligations are better defined and established than those concerning remote workers, risk assessment always plays a crucial role. In other words, it is hard to imagine that for companies adopting a 100% compliant approach would always represent the best solution. Compliance checks imply in fact costs and time.


Taking into account the above, it is worth noting that EU Member States have a legitimate interest, in compliance with EU law, in guaranteeing the protection of workers on their territory. This can be achieved by imposing the mandatory observance of some local rules. However, in order to invoke the application of national law, a sufficiently close degree of connection with the Host State is required.

The rationale behind the posted workers Directive and its rules on minimum protection is to facilitate the freedom to provide services.

The question is whether and to what extent the Host State might need to apply national employment law provisions to the remote worker. In this context, it is also to be taken into account whether the remote worker is able to harm competition, or interact with the labour market of the Host State.

As a general rule, employers should evaluate whether Workations might trigger an impact on the applicable law to the employment relation. Local employment laws could in principle, in some cases, override the contractual wording and contractual choices. To summarise, whenever Problem 1 is solved, i.e. when it is possible to clearly identify the Home State as the country where the employee habitually works, looking at Problem 2, becomes redundant. In fact, there is no need to look at the “provisions that cannot be derogated”, because they overlap with the ones of the State of habitual place employment, i.e. the Home State.

However, as we saw, it is in principle always relevant to look at Problem 3, i.e. overriding mandatory provisions.

It is unfortunately not possible in abstract terms, to predict with certainty which provisions might be considered applicable due to their “overriding mandatory” character.

In several cases, the EU legislation is not specific enough or we are facing a lack of clear provisions. Clarifications at the legislative and judicial level would be more than welcomed. In the meanwhile, there is still much room for speculation and different interpretations. However, nothing prevents that in the future the authorities' practices might change and evolve in different directions. New EU legislation might be adopted, filling the current legal gaps and providing different answers than those given so far.

Lawmakers need to adjust existing rules to a new reality. This is an authentic need not only for employment, but for all legal areas where there might be significant consequences for remote workers, starting from taxation.91 Once again, reality is overtaking legal provisions.

This still remains an unexplored territory and therefore, it becomes crucial to adopt a cautious approach and not extend too much a “permissive” interpretation of the existing rules. At the same time, if the law does not explicitly forbid something, it does not make necessary sense to automatically assume that it is incompatible with EU law.

Even if some prudence is necessary, the risks might be mitigated in several cases, if taking into account the Workation context. Since it cannot be a priori excluded that some national employment provisions might be applicable in the Host State, a safe approach might be the

preferred choice. Nevertheless, we definitely tend to support the argument that in situations such as Workations it is, for practical reasons, very unlikely to be the case.

Nov 2, 2023

There’s no “permanent” in temporary work from abroad

Discover why workations are important employee benefits & how employers can mitigate Permanent Establishment risks. Learn how WorkFlex helps manage workation requests.
Nov 2, 2023

There’s no “permanent” in temporary work from abroad

Workations are rapidly becoming an important employee benefit, and that´s for a good reason. If employees are no longer expected to work from the office, why should they only work from home? Although, not all people adapt at the same pace, and many consider it weird to go on an extended vacation only to work from there too. To be more specific, our baby boomer parents probably think it’s a classic ‘Millennial’ or ‘Gen Z’ thing to do. Nevertheless, we expect workations to develop into something usual as more employers increasingly offer them and employees continue to enjoy them.

Employers are sometimes hesitant to allow workations because of the compliance risks.

Permanent Establishment (PE) risk, in particular, is considered a showstopper. The risk here is that the employee could trigger a corporate tax liability in the destination country, meaning the employer would need to pay corporate taxes over the profits generated in the destination country. Given that the presence in the country is very limited, however, these corporate taxes generally aren't the key problem. The biggest problem is the administrative burden that comes with having to pay the taxes which, besides setting up bookkeeping, includes registrations with authorities and documentation for intercompany billing and profit allocation.

For this reason, it’s safe to say that employers really don't want their employees to constitute a PE. After all, workations should be an employee benefit rather than an employer burden.

This raises the questions; how does an employee temporarily working from abroad constitute a PE, as well as if, (and how) it can be prevented? And this is where we have good news — there’s no “permanent” in temporary work from abroad. As the name suggests, PE’s require a certain level of permanency. A workation is by character temporary and will therefore generally not be permanent enough. This is supported by both the OECD and the UN, the two organisations whose tax treaty models and commentaries have been most widely adopted. Both state that a so-called ‘fixed place of business PE’ and ‘service PE’ will usually not be constituted if the presence in the other country is below 183 days. This is one of the reasons why an international stay that exceeds this threshold no longer qualifies as “temporary”. In practice, workations are generally much shorter.

Of the more than 1,000 workation requests processed through our WorkFlex platform, more than 95% were below 30 days.

This makes it highly unlikely that these workations pose a PE-risk, even in countries that have adopted even tighter policies around ‘fixed place of business’ or ‘service PE’s’ than the OECD and UN policies. Yet, there are three additional factors that need to be considered;

  1. That the company doesn’t have an office or entity in the destination country. If it does, it must be made clear that the employee did not visit the office or perform activities for the benefit of the local entity. Deviating from this will not always, nor automatically, create a significant PE-risk. However, it would make it difficult to confidently state that the workations are not likely to form a PE-risk.
  2. For the 183-day threshold, you may be required to look at multiple workations in the same destination country. In other words, an accumulation of workationers in one country might increase the PE-risk in that location.It’s therefore recommended to have a single system in place, like WorkFlex, to manage all of the company’s workation requests. It’s also important to note that this accumulation doesn’t simply apply to employees from different departments who happen to enjoy a workation in the same country. PE-risk is more likely to increase  if there is some organisational overlap. For example, if various employees working on the same project accumulate in the same, destination country. Although this is often the case for business trips, it’s hardly the case for workations. It does show why it is important to distinguish between the two from each other, though.
  3. Lastly, is the only type of PE –- other than the previously discussed ‘fixed place of business’ and ’service PE’ – that can still pose significant risk even if the workation is below 183 days. This concerns the so-called ’dependent agent PE’. In short, the OECD and UN consider a ’dependent agent’ an employee that habitually plays the principal role leading to the conclusion of contracts. It is broadly accepted that “habitually” implies a certain frequency. For example, five contracts where the individual played the leading role. Still, this doesn’t exclude the theoretical possibility that a dependent agent constitutes a PE during a workation of one day. For this reason, it’s recommended to take two extra measures to mitigate and manage the dependent agent PE of workations.

The first one is to determine who actually qualifies as a dependent agent. Normally, the vast majority of employees don’t, as they do not habitually play this leading role in the conclusion of contracts. Examples of employees who are more likely to qualify as a dependent agent are senior managers and employees in sales and procurement roles. Workation requests of these employees need to be highlighted. A second measure is to assess the actual dependent agent PE risk for these requests. Questions to consider are; how often does the employee usually perform high-risk activities? Can they realistically refrain from performing these activities during the envisioned workation?

Together with many specialists in the field, we are of the opinion that even the most senior employees should be able to enjoy a 30-day workation without triggering a material Dependent Agent PE risk.

However, a case-by-case assessment is always required, and it’s important that the potential risks are managed. This is why WorkFlex performs an individual risk assessment of each workation request and generates relevant documentation such as employer statements and employee instructions. This way, both the employee and the employer can comfortably enjoy a workation.


Nov 2, 2023

Compliance topics around workations

Explore how to manage compliance risks for workations with this guide. Discover tax and legal responsibilities, and duty of care. Ensure smooth experience with workations for you as an employer and your employees.
Nov 2, 2023

Compliance topics around workations

Workations are rapidly becoming a significant employee benefit, for a good reason. Why should employees only work from home if they are no longer expected to work from the office? Allowing them to work from abroad for some time is an excellent example of implementing increased flexibility, similar to enabling them to work from home. For employers, the beauty of flexibility as a benefit is that it is more or less free of costs. That is, as long as the employer does not pay for the workation and the workation does not trigger any unexpected obligations for the employer. As an employer can decide on the first topic, this white paper focuses on the second topic.

Any unexpected obligations for the employer are likely to relate to the compliance risks around workations. A practical example would be the obligation for the employer to set up payroll in the destination country or the employer's liability in case the employee requires medical assistance during a workation. This raises the question of which compliance risks are related to workations, and how employers can manage or mitigate these risks.

Definition of Workation

Before diving into the compliance topics, it is essential to align on the definition of a workation. In short, this is a situation where an employee continues to work while temporarily abroad for private purposes.

The following four characteristics are relevant:

1. Abroad. This means outside the country of employment and residence of the employee. The employee will not give up his/her residency in the home country during the workation.

2. Private. The stay abroad is privately driven and has no business objective at all. Thus, a workation is something different than a business trip. A workation can be combined with a business trip, e.g., when the employee stays for a workation after visiting a business seminar.

3. Work. The employee continues to perform work activities for (the benefit of) his/her home country employer only. This means that the employee does not create any local value in the destination country.

4. Temporary. The stay is temporary, namely maximum 183 days in any running 12-month period (accumulated per country). However, many employers have limited workations within their company to a maximum number of working days that lie significantly below these six months, such as 30 or 60 days.

Summary of compliance topics


  • Corporate Income Tax: The risk that the employee constitutes a so-called Permanent Establishment (PE). This would trigger a corporate liability for the employer in the destination country. Although this is not necessarily expensive in terms of the taxes due, the administrative burden that comes with this liability is disproportionally high.
  • Employment Tax: The risk is that the employer needs to set up payroll to calculate, withhold and remit employment tax in the destination country. If a remote worker constitutes a PE in the destination country, this will also trigger an employment tax liability. On the contrary, as long as a remote worker does not constitute a PE, the employment tax liability is generally only triggered in exceptional cases.
  • Social Security: The social security risk around workations is twofold. First is the risk that the employee loses coverage from the home country's social security system. Second, the chance that the social security system of the destination country becomes applicable. Both risks are relatively easy to manage for countries within the EU and countries where a social security treaty is in place.
  • Personal Income Tax: The risk is that the employee becomes taxable in the destination country for personal income tax purposes. If this only affects the employer indirectly, e.g., the employee's income tax liability can trigger an employer's employment tax liability.


  • VISA / Immigration: Does the employee have the right to work in the destination country? One may question whether a valid working title is required if the visitor's primary purpose is tourism. This is somewhat unclear, as the VISA / Immigration legislation was not written with 'workationers' in mind. Nevertheless, it is essential to consider this topic, as the fines and penalties for illegal labour are generally hefty.
  • Local Labour law: The risk that local labour law becomes applicable. Assuming the employment contract explicitly states that the labour law of the home country applies, it is unlikely that local labour law becomes applicable. This may differ for particular arrangements, such as those around minimum wage and working conditions. In this regard, it is relevant to note that notifications based on the so-called Posted Worker Directive are not applicable for employees enjoying a workation. After all, the employer may have approved the workation but did not post the employee. Moreover, the employee does not perform services locally.
  • Duty of care: Every employer has a duty of care for its employees. However, it is relatively unclear what this duty of care precisely consists of, i.e., when the duty is fulfilled. Generally, it prescribes the employer to do everything that can be reasonably expected. As a result, an employer's duty of care is likely much lower during a workation than when the employee works from the office. At the same time, it also means that it cannot be excluded that an accident during a workation should be considered a work accident for which the employer bears the (partial) responsibility.
  • Internet and Data security: The risk is that the employee working from abroad breaches security regulations in the home country - such as GDPR regulations - or the destination country. Such as a local prohibition on using VPNs. The breach might also find its origin in client contracts, which may exclude the service providers from performing their services from particular countries.
  • Sanctioned countries: Looking at our WorkFlex data, it is rather unlikely that employees want to spend their workation in a country sanctioned by institutions such as the UN or EU. However, this is not impossible thus it is recommended to have the list of these countries available.

The long list above might scare people off, but it should not. The risks hardly differ from those relevant when employees work abroad for business purposes, e.g., during a business trip. Also, employees used to work now and then during their vacation, even before the term workation was invented. Neither of these examples was/are considered a big problem, so one should not make the risks above a red flag all of a sudden for workations only. Instead, one should be educated on the risks and manage or mitigate them.

In-depth assessment: PE-risk

For example, taking a better look leads to the conclusion that it is unlikely that workations create a significant PE risk. As the name suggests, PEs require a certain level of permanency. However, there are no "permanent" temporary workers from abroad. A workation is temporary by character and will generally not be permanent enough. The OECD and the UN support this, the two organisations whose tax treaty models and commentaries have been most widely adopted. Both state that a so-called 'fixed place of business PE' and 'service PE' will usually not be constituted if the presence in the other country is below 183 days. This is one of the reasons why an international stay that exceeds this threshold no longer qualifies as "temporary." As a result, even in countries that have adopted even tighter policies around 'fixed place of business' or 'service PE' than the OECD and UN policies, employees enjoying workations will hardly ever constitute a PE.

Yet, three additional factors need to be considered:

1. Local presence. The employer does not have an office or entity in the destination country. If it does, it must be made clear that the employee does not visit the office or perform activities for the benefit of the local entity. Deviating from this will not always, nor automatically, create a significant PE risk. However, it would make it difficult to confidently state that the workations are not likely to form a PE-risk.

2. Accumulation. For the 183-day threshold, you may be required to look at multiple workations in the same destination country. In other words, accumulating workationers in one country might increase the PE risk in that location.

It's also important to note that this accumulation doesn't simply apply to employees from different departments who enjoy a workation in the same country. PE risk is more likely to increase if there is some organisational overlap. For example, various employees working on the same project accumulate in the same destination country. Although this is often the case for business trips, it is hardly the case for workations. Nevertheless, it does show why it is essential to distinguish between the two from each other.

3. Dependent Agent PE. Lastly, the only type of PE- other than the previously discussed 'fixed place of business' and' service PE' – can still pose a significant risk even if the workation is below 183 days. This concerns the so-called' dependent agent PE. In short, the OECD and UN consider a 'dependent agent' an employee that habitually plays the principal role leading to the conclusion of contracts. It is broadly accepted that "habitually" implies a specific frequency. For example, five contracts where the individual played the leading role. Still, this doesn't exclude the theoretical possibility that a dependent agent constitutes a PE during a workation of one day. For this reason, taking two extra measures is recommended to mitigate and manage the dependent agent PE of workations.

The first one is to determine who qualifies as a dependent agent. Typically, most employees don't, as they do not habitually play this leading role in the conclusion of contracts. Examples of employees more likely to qualify as dependent agents are senior managers and employees in sales and procurement roles. Workation requests of these employees need to be highlighted. A second measure is to assess the actual dependent agent PE risk for these requests. Questions to consider are; how often does the employee usually perform high-risk activities? Can they realistically refrain from performing these activities during the envisioned workation.

Managing and mitigating risks

Besides being educated, employers should manage and mitigate the compliance risks of workations. This can be done in many ways. A common way to start is to draft a policy. It forces the company to consider what it wants to allow - and what not. This is not only relevant for compliance purposes. There can be various business objections against workations, e.g., when the employee is expected to be in the office at a particular time or when the time difference between the home location and destination is too significant.

Further, a crucial part of managing workations is ensuring a process is in place. After all, one cannot manage what one does not know. The process starts with the employee initiating a workation request. After this, it should include a manager's approval, as well as a tax and legal compliance assessment taking into consideration the topics mentioned above. Once the request has been approved, the process should prescribe the request of a social security certificate. Other potential actions may include generating and notifying the company ́s travel insurance company, putting an addendum to the employment agreement in place, generating an employer statement and/or employee instruction sheet. Preferably, this process is supported by a technology that combines all of the process requirements above. Moreover, a technology-enabled process saves both the employee and the employer time, besides having some other advantages. For example, suppose the number of workation requests is high. In that case, the technology can help to focus on those requests that are potentially problematic. Moreover, technology can help put an audit trail in place so that all information and documentation are easily accessible. A solid policy and (technology-enabled) process should pave the way for both the employee and the employer being able to comfortably and safely enjoy a workation. And that is exactly the objective: workations are meant to be an employee benefit, not become an employer burden.


Nov 2, 2023

Workations: Limited to 30 days max within Europe – what can go wrong?

Learn how workations within the EU still pose compliance risks, from permanent establishment to HR and tax implications. Mitigate these risks with a workation management process.
Nov 2, 2023

Workations: Limited to 30 days max within Europe – what can go wrong?

While a workation within the EU entails fewer risks than working from third countries, this does not mean it is risk-free. In practice, they have proven to be a BIG burden for employers, but why?

Permanent Establishment (PE) risk

Watch out, because if the employee conducts activities on behalf of the enterprise, a Dependent Agent PE could easily be triggered. Some EU countries have a strict approach to PE and potentially even a Fixed Place of Business PE could be created depending on the location where the employee is working from.

No audit trail and employee's confirmation of the work-from-abroad policy

This means a higher labour law risk, in case something goes wrong during the workation. Combine this with no travel insurance (from the employer) and it turns out to be not as safe as one would expect.

No management

A good 30-day workation management requires some time. Even a trip within the EU should not be done without proper employee instructions and neither without A1s (or a WorkFlex Social Security Statement for countries where the process of obtaining an A1 is not that quick). Sometimes forgotten, yet essential.

Accumulated presence

Be careful, not every EU country follows the same logic to stipulate tax obligations in regard to physical presence. That is why in particular countries (e.g. Czech Republic) being compliant can be more complex than expected and it demands you to update yourself regularly as local regulations often change.

HR risk

Not adopting a Working From Abroad policy is definitely not appealing for any employee. Some may wonder why they cannot spend more days abroad if they are EU nationals and want to enjoy this benefit.

Implications of family visits

Visiting family is one of the main purposes of a workation and this entails two inconveniences. Firstly, these trips may lead to having the center of vital interests in the other country (and this has some tax implications). Secondly, workations in the EU countries only could lead to non-EU citizens wondering why they cannot visit their families. Eventually, this policy can reduce engagement and reduce retention.

Your employees undoubtedly love the freedom to go on workations! To avoid compliance risks, we highly recommend implementing a workation management process, even if your current policy permits travel within the EU for less than 30 days. Book a demo with WorkFlex today to see how we can help you streamline this process and mitigate potential risks via the No-Risk Workation Concept.


Nov 2, 2023

Compliant workations: Your ultimate 3-step webinar guide

In a series of 3 webinars, we explore everything you have to know about managing workations compliantly and efficiently together with best-in-class experts of temporary work from abroad. Join in for employer experience stories and opinion-sharing!
Nov 2, 2023

Compliant workations: Your ultimate 3-step webinar guide

In a series of 3 webinars, we explore everything you have to know about managing workations compliantly and efficiently together with best-in-class experts of temporary work from abroad. Join in for employer experience stories and opinion-sharing!

Episode 1: Should your company make workations a benefit? (🇩🇪 in German)

Flexibility at the workplace is among the most demanded employee benefits that help employers win the war for talent. Besides talent attraction, there are many additional bonuses to workations - e.g. improved employee satisfaction and loyalty. However many companies also fear that workations will hurt employee productivity.

Episode 2: How to get the workation compliance right? (🇬🇧 in English)

Many employers are now offering workations to employees. However, not everyone is aware of the severe employer compliance risks associated with workations, including permanent establishment, wage tax, social security, and others. In the webinar, we discuss what are the must-have HR processes and documents to manage and mitigate the risks.


Episode 3: What workation management tool to choose? (🇩🇪 in German)

Your employees love to go on workations and they request a lot of trips. You are aware of compliance risks and acknowledge they have to be managed and mitigated. In the webinar, we discuss what tools can you use to manage the workation compliance and workation management process.

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