Do you employ workers who live outside Belgium? Since July 1st 2023, new rules are in force regarding social security which apply to teleworking abroad.
As announced by the NSSO, Belgium has signed the Framework Agreement on cross-border teleworking, along with 13 other EU Member States, as well as Norway, Liechtenstein and Switzerland.
Under Regulation 883/2004, if more than 25% of teleworking takes place in the country of residence, the social security system of the country of residence applies. With the explosion in the amount of teleworking, the 25% threshold is often insufficient to maintain the social security system of the country in which the employer is based in the case of hybrid work (e.g. structural teleworking for 2 days a week).
From now on, the employer and the employee may decide by mutual consent to apply the Framework Agreement in such a way that teleworkers, who work between 25% and 49% of their working time in he country of residence, remain subject to the social security system of the country where the employer’s registered office is located.
The Framework Agreement applies under the following general conditions:
- the two States of employment (State of the employer’s registered officeand State of residence) are signatories to the Framework Agreement;
- the employee works at least 50% of his/her working time in the Member State where the employer has his/her registered office;
- the employee teleworks a maximum of 49% of his/her working time in the Member State of residence. This must be exclusively teleworking.
If the conditions for application are met, the employer can submit an A1-application directly in the employer’s Member State.
By applying the Framework Agreement, companies should keep a close eye on whether the conditions of application are maintained during the employment period.
This Framework Agreement aims to introduce a more permanent social security regime for cross-border teleworkers in the EU from July 1, 2023. The Framework Agreement comes in anticipation of the finalisation of European rules.
Social security legislation is just one of the many areas of concern when it comes to cross-border (tele)working, and the rules are changing rapidly. So make sure you’re well informed to avoid discussions and regularisations later on.
BDO can assist you with several aspects of these new regulations:
- analyse the possibility of using the Telework Framework Agreement;
- requesting an A1-application;
- answering all your questions on cross-border teleworking.