Teleworking refers to any form of work organization in which, work that could also have been performed on the employer’s premises, is carried out by an employee outside these premises on a voluntary basis using information technology and of communication (French Labor Code. art. L 1222‐9).
The new health constraints imposed by the Covid-19 pandemic have led (or sometimes even forced) employers and employees to rethink the organization of work. Today, beyond the health constraints, teleworking appears more than ever as a means of reinventing one’s workplace. It has also become a major asset for recruiting and retaining employees, given the direct benefits provided to employees: time savings, autonomy, empowerment.
This revolution in the organization of work is now spreading beyond our borders, offering flexibility highly acclaimed by nomadic workers wishing to establish their place of work abroad.
Some countries such as Estonia and Barbados have even created a special visa allowing foreigners to settle there to work remotely for a company established outside their borders.
However, teleworking from abroad is not without consequences, for both the employee who benefits from it and for the employer who authorizes it.
How to regulate teleworking from abroad and limit the risks of non-compliance with international mobility rules (labor law, social protection, immigration, tax law, etc.), while remaining attractive to new candidates and current employees?
Implementation of teleworking within French companies:
In principle and except in a health crisis situation, this work organization is not compulsory, but is subject to the agreement of the employer and the employee. It is established permanently or occasionally, in the context of:
- a collective agreement;
- or, failing that, a policy drawn up by the employer, after consulting the social and economic committee (CSE), if it exists;
- or, in the absence of a collective agreement or policy, as part of an agreement between the employee and the employer when they agree to use telework.
Besides the need for the activity carried out to lend itself to this organization, teleworking is also based on individual skills and professional qualities which make it possible to carry out a remote activity under good conditions and the ability to perform its functions independently.
The employer is responsible for ensuring the safety and health of employees, even at work. The conditions for teleworking must therefore be regulated.
There is no text prohibiting an employee whose employer is located in France from working remotely from a foreign country. However, this has significant consequences for the employer:
In terms of immigration, each state sovereignly defines the authorizations required to work there. These authorizations are most often reduced in the context of business trips. However, if teleworking outside our borders is a decision of the employee and it is not carried out during a business trip (a few days on the sidelines of a meeting or an event professional organized by the employer), permits may be required to work in the State.
- If it is the State of origin of the employee concerned, he may have its nationality which could exempt the employer from all immigration procedures;
- If it is a member state of the European Union and the employee concerned is an EU citizen, he should be able to work there without specific authorization.
From a social protection standpoint, the principle is that the employee is liable in the country where the activity is carried out physically. However, international social security agreements (European regulations, bilateral conventions, coordination decrees) could make it possible to derogate from this principle.
- It is necessary to analyze, for each employee concerned and according to the countries concerned, what are the possible applicable conventional provisions;
- The application of these agreements can sometimes be restrictive, especially in the case of multistate activities (Article 13 of EC Regulation n ° 883/2004) : if a substantial part of the activity (at least 25% of working time) is carried out in the state of residence, the employee must necessarily be affiliated to the social security system of the Member State of residence;
- The employer may then be required to register locally and set up payroll.
In regard to income tax, the principle is that the employee is liable to income tax in the country where the activity is carried out. Some treaty provisions may allow derogations.
- Although tax treaties may provide for the elimination of double taxation between signatory countries, the principle established in international tax treaties is the liability of the employee on the remuneration corresponding to any activity carried out in his State of residence;
- The employer may then be required to discharge the tax due on the remuneration via withholding tax. He must then register locally and establish a payroll.
In regard to Labor Law, if the employment contract is generally performed in France, French law will in principle remain applicable even if this is not expressly provided for by the parties. On the other hand, the mandatory and public order rules of the country in which the activity is carried out will apply concerning the days of teleworking activity.
- It is necessary to verify that the employment contract provides for the application of French law as the law chosen between the parties;
- It is also necessary to check with Local councils about any public order rules applicable to the situation (working time, rules on rest time, rules on health and safety at work, etc.).
The employer remains responsible for the health and safety of the employee, even when he works abroad at his request.
- Measures must be taken to ensure working conditions in the foreign country (employee’s sworn statement, certificate of insurance, etc.)
Be careful to respect the French rules on working time, organization and the right to disconnect! Some countries are far from France, the time difference may require adapting the employee’s work organization.
Other consequences: permanent establishment of the employer company in the foreign country, data protection and confidentiality, payment of travel expenses, etc
Legal adjustments established in the context of Covid-19:
During the period of health crisis, teleworking was made mandatory for many employees (Article L 1222-11 of the French Labor Code). Some employees have been stucked outside of France, others have chosen to settle there. In order to limit the tax, social and immigration consequences, European and international measures have been established between some countries (France has notably concluded agreements on tax matters, with Luxembourg, Italy, Belgium, Switzerland and Germany).
The practical approach about teleworking from abroad :
- Verify the content of the agreements currently in place within the company concerning teleworking;
- Identify the concerned employees (already registered as non-tax residents of France, recruited from abroad, employees on temporary assignment abroad, etc.);
- Define the rules and the framework applicable to teleworking on national area and, possibly abroad (list the cases of recourse to teleworking, whether regular, occasional or impossible by exceptional circumstances, its implementation, the conditions of control and regulation, return to the workplace, the obligation of information by the employee, etc.);
- Verify the applicable conventional provisions and the insurance conditions applicable to employees (repatriation, travel insurance, etc.);
- Liaise the subject with the teams in charge of employee safety.
Our Team would be delighted to answer any question that you may have on this!