Working life has changed as a result of the Covid-19 pandemic. Telework and hybrid work are present as never before. In the case of multi-state workers, this can unfortunately bring about a mandatory social insurance in the other country.
Therefore, the administrative commission of the EU finalised a special agreement which will expire soon. This has motivated Germany and Austria to conclude a framework for telework. This newsletter informs you about the impacts of the framework.
In June 2022, the administrative commission agreed to pass a “No Impact Policy”, which resulted in a pandemic-conditioned special agreement that would have expired on 31 December 2022 and was extended until 30 June 2023.
The regulations of the Regulation 883/2004 will apply from 1 July 2023, resulting in mandatory social insurance in the domicile country if the employee performs a significant part of the work there. A significant part of the work is performed in the domicile country if it amounts to at least 25%.
In connection with the possibility for Member States to conclude bilateral derogation agreements as indicated in the Guidance Note on telework, Germany and Austria have taken this as an opportunity and concluded a framework agreement. The framework allows a share of telework up to 40% in the domicile country without application of the social security scheme of the domicile country.
The framework is only applicable between Germany and Austria. Therefore, it only applies if the permanent establishment where the employee works is in one of the two states and the teleworking domicile is in the other state. Furthermore, the employee is only permitted to have one employment, and the telework is usually recurring in the home office and using information technology.
If the previously mentioned requirements are fulfilled, the employer, in agreement with the employee, may submit an application to the competent authority of the state. These authorities are the “GKV-Spitzenverband, DVKA” in Germany and the “Dachverband der Sozialversicherungsträger” in Austria.
The framework already became active on 1 January 2023. Since the “No Impact Policy” is applicable until 30 June 2023, the Guidance Note primarily applies. Therefore, the regulations of the framework are valid as of 1 July 2023.
The application of the framework can be agreed for a maximum of two years, with an extension possible. As of now, there is no further information about the conditions and the period for which the extension can be requested and if there is any maximum period.
We will of course keep you up to date about the further progress.
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