Effective as of 1 July 2023, a Framework Agreement on Art. 16 of Regulation (EC) 883/2004 allows so-called cross-border teleworkers – individuals working from home or being on what has been termed “workation” – to remain part of the social security system at the employer’s place for an extended period, i.e., for up to three years.
Based on Article 16 of Regulation (EC) 883/2004, the majority of EU Member States, as well as Switzerland, Liechtenstein, and Norway have created an option for cross-border teleworkers (i.e., those working from home or on what is known as “workation”) to retain their status within the social security system of the employer for a maximum period of three years.
On 1 July 2023, a Framework Agreement on the application of Art. 16 of Regulation (EC) 883/2004, on the coordination of social security systems in the EU, has come into force which gives cross-border teleworkers the opportunity (for a maximum period of three years) to remain within the social security system of their employer’s jurisdiction (though this opportunity does not exist retroactively, for periods prior to filing a formal request). For the request to be legitimate, the work performance in the state of residence must amount to less than 50% of the overall working hours, and the person in question must be an employee (as opposed to an entrepreneur or freelancer). Staying withing the employer’s social security legislation had been a temporary option made possible during the COVID-19 pandemic; it is now being institutionalized.
The concept relies on the derogation clause in Art. 16 or Regulation (EC) 883/2004, based upon which a Framework Agreement was put together which, however, has only been signed by 19 of the EU Member States to date. Among the non-signatories (as per usual, one is tempted to say) are Hungary, Denmark, but also Estonia, Latvia, Romania, Bulgaria, Cyprus, and Greece, and from among EEA states Iceland alone. Still, this means that popular destinations where cross-border teleworkers have always liked to take temporary roots – i.e., employees who render work for their employer in another state – are covered by the Article 16 Framework Agreement, such as Spain, Portugal, Italy, Croatia, and France.
The details are highly technical indeed. The website of the social security administration of Belgium lists the national authorities with whom cross-border teleworkers may file their applications. Belgium being the depository state for the deeds of accession to this Framework Agreement means that Belgium plays this coordinating role. For Germany, the competent institution is the GKV-Spitzenverband, Deutsche Verbindungsstelle Krankenversicherung – Ausland, for the Czech Republic, it is the Czech Social Security Administration (ČSSZ), and it is with these institutions that one must file the relevant request pursuant to Art. 18 of Implementation Regulation 987/2009/EU. I.e., if an employee wishes to remain subject to the social security jurisdiction of Germany or of the Czech Republic, respectively, they must file their request with the GKV or with the ČSSZ,. depending in which system they wish to remain in spite of taking residence in another EU Member State, EEA state, or Switzerland.
The above-described option, which is explained in detail in a dedicated memorandum (accessible at the Belgium website mentioned above), including several practical examples, will certainly be attractive for a number of employees working from home, or “on workation”, for their employers.