“Working from home” abroad: points of attention
One of the measures to combat the COVID-19 crisis, is the introduction of recommended or compulsory telework for employees. As a consequence, some employees who usually worked in Belgium, decided to perform a part of their homework abroad because that allowed them to stay longer in their country of origin or simply as a “workation” or an extension of holidays.
Performing work outside the usual “work” country, may have far-stretching consequences. We outline the most important points of attention below.
1. Applicable social security
Belgian social security applies to employees who work on the Belgian territory. Employees who do not work in Belgium, cannot contribute to the Belgian social security system.
The employee can only continue contributing to Belgian social security, if the employee was already subject to Belgian social security and is subsequently posted to another country (if the other country is an EU member state or a country Belgium has concluded a bilateral social security treaty with).
If parties choose posting from Belgium as a solution, they will have to apply for an A1 form/certificate of coverage with the Belgian social security authorities in order to demonstrate the continued coverage under Belgian social security during the temporary employment in another country.
For a temporary employment in non-EU countries that do not have a bilateral social security treaty with Belgium, the employer can decide that Belgian social security continues to apply, but it should also be verified on local level if the employee should be subject to local social security contributions. Generally speaking, this should not be a problem in case of a short period of employment abroad, but it is recommended to verify this in advance.
! In the event of posting of more than one month, the employer should receive a letter from the employer in accordance with the Belgian Employment Contracts Act concerning: the duration of the work abroad, the currency in which the salary is paid, the possible benefits connected to the assignment abroad and the conditions of the employee’s return to his country.
! Several European countries have a mandatory notification system for employees who temporarily work on their territory and do not pay social security contributions. Check if the country where your employee will work from home temporarily, has such a system. See our newsletter about the introduction of such a mandatory notification system in the Netherlands: Notification obligation for posted workers in the Netherlands.
2. Applicable tax regime
With regard to professional income, individuals are taxable on their worldwide income in the country where they are resident for tax purposes. If an employee works in another country for a longer time and/or has ties to that country (e.g. his family lives there/he has property there etc.), he may become taxable in that other country. We recommend to verify this with a tax advisor. If an employee becomes taxable in another country and taxes have to withheld by the employer on the salary, a payroll will have to be set up abroad.
3. Work accident insurance
Employees who work from home, are as a rule covered by your work accident insurance. Of course you are obliged to inform your insurer that homework applies. However, that does not automatically mean that the insurer covers homework abroad, on the contrary. Check with your insurance company whether additional formalities/premiums apply.
4. Applicable labour law
As a rule, parties are free to choose the labour law applicable to the employment relationship. However, there are limits to this choice of law. These are linked to the place where the employee performs his activities and local law that has to be complied with there. For shorter periods of employment (e.g. a few weeks) abroad, this is usually not a priority, taking into account that the Belgian legislation provides a high level of protection for employees. However, for posting within Europe, it is recommended that you check whether provisions of mandatory local law could apply, taking into account the EU posting directive.
5. Immigration
If the employee works in another country, it needs to be verified whether he has the right to reside and work in that country. An authorisation to stay abroad temporarily in a certain country for a holiday, is not the same as an authorisation for long-term residence or work in that country.
POINT OF ATTENTION
! Explain to your employees that they cannot “simply” work from home in another country and check if you have to take additional steps for employees working from home abroad. If homework abroad is allowed in your company, ensure that the telework policy clarifies how long this is allowed for and under which conditions.