Workation is no longer a foreign word. Workation has established itself in our linguistic usage and it is simply impossible to imagine the modern working world without it.
On the one hand Workation offers numerous opportunities for companies to remain competitive in the fight for the best talents. On the other hand, there are some risks and need for action that must be taken into account. These are primarily social security, labour law, income tax and corporate tax aspects, such as the risk of establishing an unwanted permanent establishment abroad. The bottom line remains: Opportunities must be set against the risks in order to weigh up whether a company decides to introduce a workation policy. The corporate risks can be managed very well if the company is aware of them in advance and concrete processes are followed. The opportunities have long been recognised by management, so that the introduction of a workation policy is on the agenda of many companies.
I Case-by-case assessment vs. standardised processes:
Individual case reviews concerning tax, social security, labour law and other aspects of remote work abroad are usually time-consuming and cost-intensive. Nevertheless, it makes sense to carry out individual case audits if it is an individual case that deviates from the standard. This could be, for example, the employment of an employee who works permanently for a German company from a foreign home office.
However, if the number of similar cases is high, as is likely to be the case with workation, it is simply impossible to send every application for workation to an individual case review. The failure of Workation would be pre-programmed. The aim of Workation is to establish a streamlined and standardised process that minimises the administrative workload of the HR departments in the company and reduces the company risks to a minimum. Furthermore, the application process on the part of the employee should be simple, understandable and ideally completed in a few minutes. Only then will employees make use of the opportunity to take advantage of workation and consider it a benefit offered by the employer.
II Implement workation efficiently and effectively:
So-called workation tools are being found more and more frequently, which are supposed to address all the risks associated with workation. It becomes problematic when the tool is not aligned with the company's internal workation policy. Because then these tools lead to the fact that most cases still end up in the individual case assessment. This does not relieve the burden on the HR department and the available budget.
The starting point for the implementation of a well-designed workation process is a workation policy that defines the principles, objectives, personal requirements and the application or approval procedure. The workation policy should be in line with the company's strategy and differentiate itself from the general work travel policy.
The policy should clearly and transparently define the conditions under which workation is permitted. In particular, it should be specified which group of employees may take advantage of workation, for how long and in which countries. Particularly with regard to territorial delimitation, there is currently still a trend to limit work to other European countries, the EEA and Switzerland. However, some companies are already expanding this to include individual third countries that their employees like to travel to.
Once the principles under which workation may take place have been identified, it is recommended that compliance issues such as taxes, social security, labour law, immigration, etc. are initially examined once for each country.
For internal purposes and, if necessary, also for presentation in the context of a tax audit, these country studies can additionally be consulted.
Example
X GmbH would like to enable its employees to work abroad in Europe for a maximum of 4 weeks per year within the framework of workation. The group of employees who are to be enabled to work abroad includes numerous sales employees who have the authority to negotiate, conclude and sign contracts for X GmbH.
The country study conducted showed an increased risk of establishing an agent permanent establishment in some countries for sales staff. As a result of the country study, it is included in the workation policy that powers of attorney to negotiate, conclude and sign contracts are not allowed during a workation.
Practice tip: It is recommended that the employee actively confirms in the Workation application process that her or she will not exercise such powers during Workation.
III Implementation of an application process:
Once a workation policy has been written, this should be published within the company and on the intranet.
It should also be communicated that every employee who wants to use workation must go through an application and approval process in advance. This is the only way to ensure that the company is aware of an employee's workation and can take the necessary steps, such as applying for an A1 certificate for social security purposes.
The application form should include questions that are as clearly worded as possible and easy for the employee to answer, such as "I confirm that I have EU citizenship", "I confirm that my centre of life is in Germany...".
Individual aspects that are of great importance to the company can also be addressed via the application form and confirmed by the employee , e.g. "I confirm that I will also observe the data protection policy during my workation", "I confirm that I will also observe the working time rules during my workation",....
IV Application forms:
Some companies have simple application forms in PDF format that have to be evaluated individually by the HR department in order to decide whether to approve or reject the application. If a company expects a manageable number of workation applications, this is certainly a viable way to start with the introduction of workation.
However, it is to be expected that after the introduction of a workation policy, the number of workation requests will steadily increase. HR departments will therefore have to look for alternative solutions in order to be able to process the large number of applications.
Automated "self-assessment" tools that already make a decision on the approval or rejection of an application in the form of a traffic light system based on the information provided by the employee are desirable.
In practice, there are Excel-based solutions that already evaluate compliance risks via a stored logic and deformation, all the way to fully automated solutions in the form of workstation apps.
Whether simple application forms, an Excel-based tool or fully automated assessments via an app: all three application forms should have one thing in common - the individual framework conditions of the company on which workation is enabled should be reflected in the application form.
It certainly makes sense to involve the supervisor in the approval process. Even if nothing stands in the way of workation from a compliance point of view, the implementation of a certain project may still require the physical presence of the employee in Germany and thus stand in the way of workation.
Conclusion
A successful introduction of workation requires a workation policy that defines the framework conditions under which workation is permitted, taking into account compliance risks based on country studies. These framework conditions must then be confirmed by the employee in the application process.
Which form of application form is the most suitable for a company certainly depends on the caseload of workation applications, the resources in the HR department and the budget made available. But one thing is certain: only a well thought-out process makes a workation a positive experience, both for the employee and for the company.
