Cross-border telework in the country of residence: extension of the scope for social security purposes

Framework Agreement between the Czech Republic and Germany and the Czech Republic and Austria

From 1 March 2023, two Framework Agreements concluded by the Czech Republic with Germany and Austria are in force and concern persons who perform regular cross-border telework (telework, work from home). According to these agreements, it is possible for an employee to be covered by the social security system in the country of their employer even if they work more than 25% in their country of residence, but up to a maximum of 40%.

According to the European Regulation, if an employee performs less than 25% of their work in their country of residence, they are subject to the legislation of the employer's country of residence under Article 13(1)(b)(i) of Regulation (EC) No 883/2004.

The Czech Republic has concluded Framework Agreements with Germany and Austria on the application of Article 16(1) of Regulation (EC) No 883/2004, which allow employees to be subject to the legislation of the employer's country of residence even if the amount of work in the country of residence is between 25% and 40%, i.e. up to two days a week.

The condition is that the employee must request an exemption under the specific Framework Agreement, namely with the competent institution in the country of residence of their employer for up to two years in the future, and may be applied for repeatedly. If the following additional conditions of the Framework Agreement are met, the employee will be legally entitled to an exemption if:

• they only have one employer;
• they perform cross-border telework for that employer (usually from home);
• the telework is the same as the work carried out at the employer's premises;
• the teleworking is carried out using information technology;
• the teleworking in the country of residence is carried out to the extent of 25%-40% of the total gainful activity;
• it is in their interest to grant the exemption.

The employee will then be issued an A1 certificate.

If an employee carries out telework in the state of residence to an extent of more than 40%, the Framework Agreements do not apply to them but they can still apply for an exemption under Article 16(1) of Regulation (EC) No 883/2004. However, there is no longer a legal entitlement to such a derogation, but it may be granted by agreement between the competent institutions of the Member States concerned.

Example:

The employee resides in the Czech Republic and is employed by a German employer. The employee works from home, i.e. two days a week (40%) in the Czech Republic and three days a week in Germany. The employee carries out the so-called substantial part of the activity in the country of residence and is normally subject to the Czech social security system under Article 13(1)(a) of Regulation (EC) No 883/2004. If they wish to be subject to German legislation, they can apply for an exemption under the new Framework Agreement between the Czech Republic and Germany to the GKV-Spitzenverband, DVKA.