Telework in Europe: New official Framework Agreement: UPDATE of the signatory states !

As a reminder, please note that until 30 June 2023, we were still in a period of tolerance during which the physical presence of a person is not taking into account to determine the competent state to levy the social security contributions.

The purpose of this Framework Agreement is that it enables an employee who carries out habitual cross-border telework in Europe to remain subject to the legislation of the State in which its employer has its registered office or place of business, although this person teleworks in its State of residence for less than 50% of its total working time.

Reading in detail the new Framework Agreement, it mentioned amongst others that:

• It is not applicable to self-employed persons;
• It does not cover activity other than telework pursued in the State of residence of the employee and real activity in the State where the employer has its registered office;
• The cross-border telework must be agreed between employer and employee formally or informally. The request for the application of the Framework Agreement (which will be based on art 16. of Regulation (EC) No. 883/2004 agreement) must be made in consent between both parties.
• Such agreement made between the State of residence of the employee and the State in which the employer has its registered office will be valid for 3 years (with extensions possible upon request) and the duration will be specified in an A1 certificate.

Based on the above, we remind you that as from July 2023, outside the scope of this Framework Agreement on crossborder telework, the general rule to determine the competent social security State will apply again.

According to the EU Regulation on social security Nr. 883/2004, an employee is subject to the social security system of the State in which his employer is located.

In case of activities in two or more Member States (simultaneous employment), the employee is subject to the social security system of the State of residence provided the employee works more than 25% in the State of residence. If this is not the case, a decision tree has to be verified to determine the applicable social security regime.

The UK authorities (HRMC) confirmed that UK will NOT, for now, be opting into the new Social Security Framework Agreement for new teleworkers. So, for now the general rules as stated in the EU withdrawal agreement are applicable in employment situations involving the UK.

Furthermore, you can find hereafter a resume of the countries which have already signed (or will sign) the Framework Agreement :

In case you have employees teleworking abroad or you are a foreign employer with staff teleworking in another EU member state, please reach out Stijn Sablon (Stijn.sablon@mazars.be) or Bart Van Laere (bart.vanlaere@mazars.be).