Workation is no longer a "grey area" - and employers need to act

For years, workation sat in a legal "grey zone". Employees worked “a few days” from abroad, managers approved it informally, and everyone hoped it wouldn’t trigger tax or social security issues.

That phase is over.

The legal reality: Why "where you work" now matters more than ever

What EU law already makes clear; under EU Regulation (EC) No 883/2004, social security coverage is determined primarily by the actual place of work. This principle has been taken lightly in the post-pandemic years where remote work and global mobility thrived very much.

As of January 2026, recent legal developments in Europe - particularly in Germany - make it clear that cross-border remote work is no longer something employers can treat lightly. Courts and regulators are reinforcing a simple principle:

where work is performed matters, even for short stays.

At the same time, new treaty rules - such as the 34-day remote work threshold under certain double tax agreements - are often misunderstood. This treaty have been recently concluded between Germany and Netherlands and entered into force on December 31, 2025. Although the rules of this agreement is a relief compared to earlier positions where even one day working abroad could trigger tax consequences. These rules don’t remove compliance obligations; they simply make correct classification and tracking more important than ever.

And let’s not also forget that the ongoing digitalization of reporting systems and the automated exchange of data between EU member states will make compliance with the regulations even more strictly enforceable by 2026.

In practice, this means that working from abroad can trigger:

• Social security obligations in another country
• The need for valid A1 certificate
• Tax exposure if thresholds are exceeded
• Payroll and reporting inconsistencies if work locations are not tracked properly

What we’re seeing in practice is a shift:

workation is no longer just an HR or “people” topic. It’s a compliance, payroll, and risk management issue.

Informal approvals, spreadsheets, and “we’ll deal with it later” approaches no longer work! Especially, as authorities increase scrutiny and enforcement.

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How WorkFlex supports employers in making workations 100% compliant

This is exactly the gap WorkFlex was built to address. We don’t only assess compliance risks, we actually take actions to mitigate and even eradicate them.

WorkFlex helps companies:

• Assess workation and remote-abroad requests before risks arise
• Issue A1 certificates in 30 countries in and outside the EU to ensure compliance and avoid penalities and/or administrative burden.
• Track where employees actually work, and for how long, and document trips for internal and external audits.
• Issue health insurance to preserve employer's duty of care
• Align HR, payroll, tax, and mobility decisions in one compliant flow

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Employee mobility is not going away. But EU law is clear: flexibility without structure creates legal and financial exposure.