New framework agreement on social security legislation applicable to habitual cross-border telework from July 1, 2023

The physical working place is a decisive criteria for the applicable social security legislation. If you do not live in the country where your employer is based, home office telework may mean a change in social security legislation. This would be the case, for example, if (tele)work in the state of residence exceeded a proportion of 25%.

Because of Covid-19, it has been agreed that crossborder workers remain insured under the social security system of their country of employment, despite working more than 25% in their home country. These special arrangements, which have been extended several times, expired on June 30, 2023. As telework has meanwhile become established throughout Europe, follow-up regulations have been negotiated at European level with the aim of continuing to allow crossborder workers to work from home to a greater extent, without any change in social security regime.

These discussions resulted in a multilateral framework agreement based on Article 16(1) of Regulation (EC) 883/2004. This voluntary framework agreement entered into force on July 1, 2023 between the signatory states, and will remain valid for an initial period of five years. Germany, Belgium and Luxembourg have already signed this framework agreement.

Prerequisites for falling within the scope of the new regime

For a person in paid employment

• for one employer (or several employers, but who are established in only one country)
• in the state where the employer’s premises or permanent establishment are located,
• or in his or her state of residence, in particular at home, in the form of telework using information technology and thus carrying out the tasks entrusted to him or her, the applicable social security legislation is that of the state in which the employer is established or in which its principal premises are located.

This provision applies if

• a corresponding agreement is in your interest and is requested,
• no third state is involved (e.g. another state where you usually work), and
• telework in the country of residence represents between 25% and less than 50% of total employment.

You therefore have the choice of whether or not to use the new regime.

What do crossborder workers have to do to be covered by the new regime?

The framework agreement applies to transborder telework between 25% and 49.9% of total working time. If you wish to benefit from the new regime, and your state of residence and the state of your employer have both signed the framework agreement, you must apply for your A1 certificate in the state whose legislation is to continue to apply to you, i.e. from the competent institution of the state in which your employer is established.

In principle, the usual application procedure for derogation agreements under Article 16(1) of EC Regulation 883/2004 will apply.

If the application is submitted by June 30, 2024, the social security legislation requested will apply retroactively to July 1, 2023, insofar as you have been permanently subject to the social security legislation of the competent state under the framework agreement.

Transborder telework of up to 25% (maximum 24.9%) is possible without any social security implications.

Please note that this framework agreement only concerns social security and not taxation of crossborder workers.