European regulations on cross-border workers working in home office

last updated on 17 Ocotber 2023

National and European authorities have decided to extend once again the exceptional measures which allow cross-border employees in a Home Office situation to continue to be covered by the social security system of their State of activity. This has been organized through the ‘Framework Agreement on the application of article 16 (1) of Regulation (EC) N° 882/2004 In cases of habitual cross-border telework’, which now allows derogations from article 13 § 1 a) of the mentioned Regulation under a simplified procedure.

This new agreement, effective as of 1 July 2023 (or later on for states who sign later on) and concluded for an initial period of five years, specifies the following:

Cross-border employees can now practice Home Office while maintaining the social security system in the country in which the employer’s company is located, as long as the employee fulfils the following cumulative criteria:
- The employee's State of residence is different from the State of the registered office or place of business of his employer,
- The State of residence of the employee and the State in which the employer has its registered office or place of business are both signatories to the Framework Agreement (see below),
- The application has to be submitted by the employee or the employer,
- Consequently, the previous conditions of Regulation 883/2004 continue to apply as long as neither the employee nor the employer apply for the application of the Framework Agreement,
- The proportion of Home Office work carried out in the State of residence is less than 50 percent (previously 25 percent) of the employee's total period of work.
So-called “cross-border” Home Office employees are those whose activities:
- are carried out in one or more Member States other than the one in which the employer’s premises or the place of business are situated,
- and is based on information technology to remain connected to the employer’s or business’s working environment as well as stakeholders/clients in order to fulfil the employee’s tasks assigned by the employer or clients, in case of self-employed persons.

This wider definition aims to ensure that the place of exercising the Home Office does not necessarily have to be the employee's place of residence.

Consequently, the following persons are excluded from this arrangement:

those, who habitually pursue an activity other than cross-border Home Office in the State of residence and/or
those, who habitually puruse a Home Office activity but in a country that is not a contracting party to the Framework Agreement;
those, who are self-employed.

To make use of the Framework Agreement the employer or employee must file an application for an A1 certificate. With limited exceptions, a retroactive application for an A1 certificate under the Framework Agreement will be rejected.

The authorities in the country of the employer will issue an A1 certificate when the conditions under the Framework Agreement are met and they will inform the country of the employee’s residence of their decision.

An A1 certificate will be issued for a maximum duration of three years at a time (renewals possible).

Furthermore, it should be underlined that this agreement:

will only apply in the context of cross-border Home Office activities (please see the new definition in the above Framework Agreement) and not to all cross-border activities;
will not affect the tax and employment law aspects, which will have to be analyzed in parallel.

In this context, you will find below an overview of the signature of the Framework Agreement: