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Adjustments to the VVPR-bis regulation

Occasional telework in European context: New rules on the way?

Adjustments to the VVPR-bis regulation

Situation to date

It seems like an eternity ago that working from home became "the new way of working" during the COVID-19 pandemic. Because of the necessity, many people discovered the benefits of working from home. Employees who previously resided in one country and worked in another were suddenly required to telework from home. This changed employment situation threatened to have unwanted effects with regard to the country in which social security contributions were due. For this reason, these rules were temporarily neutralised during the COVID-19 pandemic.

But today, 3 years after the COVID-19 pandemic, the situation has again completely turned around and COVID-19 seems only a (distant) memory.  In the process, it has also become very clear that teleworking will not disappear any time soon and this new way of hybrid working has to be taken into account. We are also seeing more and more new forms of remote working such as the 'workation', co-working environments, branches abroad, etc. These changing employment situations mean that the existing rules are reaching their limits and, in addition, existing legislation does not always provide the appropriate or desired answer for these new hybrid work situations.

To give employers time to adapt to this new way of working and its social security implications, a transitional period is applicable until 30 June 2023.

In anticipation of the end of this transition period, a work group was set up within the European administrative commission to see how these new work situations could be regulated. The work group reached an agreement in mid-March on possible new rules that could potentially change the playing field (limited). The information below is of course subject to approval in the administrative commission and implementation in the member states.

 

New rules from July 2023?

The international working group, under which Belgium was also represented, reached an agreement in mid-March on possible new rules to complement the existing ones.

Target group

The new rules agreed upon would only apply to employees who live in one member state but work in another and occasionally telework from another location.

Criteria

The working group proposes 3 main criteria to define telework:

  • A location-independent criterion: this means that the rules apply regardless of where in the world the employee is working;
  • The telework must take place in a Member State other than where the employer is established;
  • It must involve work that can generally (largely) be performed over an IT connection. This excludes purely manual administrative tasks without the use of a PC and internet connection.

 

Model policy agreement

The work group searched for a way to provide a solution for teleworkers within the existing framework of Regulation 883/2004. In doing so, they arrived at the concept of a framework agreement based on an article that already provides for the possibility of derogating from the existing rules when member states reach an agreement (Art. 16).

The solution developed by the work group states that teleworkers, who meet the aforementioned criteria and telework less than 50% of their professional time, could remain subject to the social security scheme of the member state where the employer is located. This would be a choice to be made by mutual agreement between employer and employee.

The new rules would not apply, for example, to an employee who works as a sales representative in addition to teleworking in his home state. These new rules would thus become an addition to the existing rules. Situations that do not meet the specific criteria will continue to be assessed under the existing rules.

A1 certificate

Moreover, these new rules would also have an impact on the A1 certificate application process. For situations covered by the criteria, the employer will be able to apply for an A1 certificate in the country where it is located. This country will assess the situation and, if approved, issue the A1 certificate. Thereafter, the country where the employer is based will inform the employee's country of residence.

Implementation

We now have to wait for further approval and elaboration of the policy agreement in the European Administrative Commission. Then we will be on the lookout for which member states will eventually sign the policy agreement. We learned that it is intended to have these new rules enter into force by 1 July 2023. We at Crowe will of course continue to monitor this closely for you. If you still have questions, do not hesitate to contact us via [email protected] .

 

 

Authors: Cynthia Smeyers, Dorien Laevers