As a result of measures taken during the health crisis of the Covid pandemic, the application of regulation 883/2004 on the coordination of social security systems was neutralized by a number of unilateral declarations, the validity of which expired on 30 June 2023. With the aim of finding a long-term solution in the context of an ever-increasing use of telework, the EU Member States have opted for a framework agreement to be exclusively applied to cross-border teleworkers. This framework agreement took effect on 1 July 2023.
Pursuant to Article 13 p3 1 a) of Regulation 883/2004, border workers are subject to the social security system of the EU Member State in which they carry out the substantial part of their professional activity.
Should a cross-border worker then perform more than 25% of their professional activity teleworking in their country of residence, he/she would by virtue of the regulation, become subject once again to the social security system in that particular country.
In light of the increasing popularity of teleworking, the EU Member States have agreed on a permanent solution for cross-border workers via the framework agreement.
Scope of application
The framework agreement defines cross-border telework as “an activity which can be performed from any location other than that of the employer's premises and which:
As such, when cross-border telework in the EU State of residence represents less than 50% of the total working time, the employee will now remain affiliated to the social security system in the State of the usual place of employment.
Implementation
To implement the new measure, the employer should make a request on behalf of and with the employee’s formal agreement using an A1 certificate (Article 16 of Regulation 883/2004). The framework agreement cannot be put into application without this formal request.
The formal request made with the A1 certificate is submitted to the Member State authorities where the employer's premises are located, and with a fast-track processing time. Provided that the two Member States concerned are both signatories to the framework agreement, no joint examination of the application is necessary. The Member State issuing the certificate simply has to make an online declaration to the authorities of the teleworker’s country of residence.
Applications are valid for a maximum length of 3 years and may be extended subject to the filing of new applications.
Limited application
As at 1 July 2023, the Member States signatory to the framework agreement are:
Austria, Belgium, Croatia, the Czech Republic, Finland, France, Germany, Liechtenstein, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Switzerland.
The United Kingdom has already indicated that it will not be signatory to the framework agreement.
These new rules only apply to social security bodies and are specific to cross-border working.
Tax law is applied independently which in itself could result in difficulties for cross-border workers.
It is imperative that at a company level the rules governing telework are clarified.
Our legal teams are at your disposal to review any of these points with you.
