• GLOBAL MOBILITY
GERMANY
Remote
place of work. In the case of alternating work (e.g. two days a week in the home office and three days a week in the company) and mobile work, the employee must bear the costs for the journey to the company himself if there is no contractual provision to the contrary. A supplementary agreement is strongly recommended for mobile working abroad. This agreement should, for example, specify the law applicable to the employment contract. In principle, the employment law of the country in which the employee’s usual place of work is located applies. For short stays abroad, the place of work should still be in Germany. In the case of longer stays, the law of the country in which the employee is staying could apply without regulation. • Residence law requirements and other reporting obligations If an activity has a foreign connection, employers must always bear in mind possible reporting obligations. These exist in almost all countries and vary from state to state. Timely information helps to avoid sanctions! • Right of residence and residence permit If an EU citizen works in a member Mobile working abroad • Applicable law state of the European Union, they enjoy the privilege of freedom of movement. This means that EU citizens can travel to and work in any member state. Mobile work in an EU member state is therefore possible under residence law
(at least for a period of three months) without any major obligations to provide proof of residence. When working in so-called third countries (countries that are not members of the European Union), residence is generally only possible with a corresponding residence permit (such a regulation has also applied to UK nationals since January 1, 2021 as a result of the Brexit). • Social security law The social security obligation is determined according to the so-called country of employment principle. This means that the social security law of the country in which the employee actually performs the work applies. The only exception is in the case of secondment. This is the case if the employee of a German company works abroad in another member state on the instructions of the employer and this activity does not last longer than 24 months. Whether the employee’s request for mobile work abroad can be equated with an instruction from the employer is controversial. If this is the case, the social security classification in the Member State of residence can continue to apply in accordance with Art. 13 of Regulation (EC) No. 883/2004, provided that 25% of the work activity is carried out abroad during the year. In addition, the so-called A1-certificate is essential for work in the European Union. It provides information on whether an employee is covered by social security in his home country when working abroad.
The A1-certificate should therefore be applied for before every stay abroad. • Tax law Taxation is based on the place of employment principle. According to the applicable double taxation agreements, income from non-self-employed work is generally attributable to the country of activity. The OECD Model Tax Convention, for example, stipulates that the country of residence has the right of taxation if 1. the employee does not spend more than 183 days in the host country, 2. the employer paying the remuneration is not resident in the country of employment and 3. the remuneration is not economically borne by a permanent establishment of the employer in the country of activity. In addition to the 183-day rule, it is essential to ensure that no so-called permanent establishment is created in the respective country of activity. This would not only have consequences for the employee’s income tax, but also for the company’s other tax obligations. Summary Mobile working is rightly popular with employees and has become an integral part of everyday working life. However, the implementation of mobile working affects a large number of legal areas and raises numerous questions, particularly in the case of foreign assignments. Employers must examine and approve each individual case to ensure that their employees’ activities abroad are legally compliant.
possibilities
Dr. Gerd Müller-Volbehr Partner Müller-Volbehr Hitzer Rechtsanwälte
Covid-19 crisis as a catalyst for mobile working The Covid-19 crisis was the central event for employee mobility in the years 2020 to 2022. Many employees were given the opportunity to work remotely from home within a very short space of time. Meetings were no longer held in the company, but via video conferencing. This form of working was immediately embraced by many employees, and after the Covid-19 crisis, many companies continued this form of working. Recently, many companies, especially large companies, have been rethinking their approach, as mobile working also has downsides. Much of the normal communication between employees is lost, and this has considerable consequences for the flow of information within the company, and social interaction, company loyalty, and innovation are weakened. The consequence of this critical view of working entirely from home is that most large companies are calling their employees back to the workplace and only accepting 1-2 days of remote work per week, which is now common practice. Mobile working also opens up the possibility of addressing the shortage of skilled workers and employing staff whose place of residence is a considerable distance from the company headquarters. Against this background, the legal requirements for mobile working must be examined for each individual
case, which includes questions of employment, social security law, tax, and residence law, as well as registration and verification obligations. Selected Highlights Mobile working in Germany Mobile working in Germany generally has few special features compared to working at a fixed workplace in the company. In principle, the employee has no claim to be able to work remotely. Rather, the employer can determine whether and to what extent the employee can work on a mobile basis within the scope of its right to issue instructions. As the employee cannot be obliged to work remotely, the implementation of mobile working ultimately requires agreement between the employer and employee. The question of whether the employer is entitled to order the employee to return to work from the home office against the employee’s will or whether a contractual provision is required in this regard has not been clarified. It is also advisable to clarify whether the employee may use his own work equipment and whether any additional costs incurred, such as for internet, electricity or hardware, are to be reimbursed. Furthermore, travel costs from the home office to the company or to the first customer or from the last customer back to the home office must be reimbursed by the employer if there are no deviating contractual provisions and the home office is the only contractually agreed
Dr Gerd Müller-Volbehr studied at the Universities of Munich, Augsburg and Paris II (Panthéon-Assas) and is a founding partner of ACURIS Rechtsanwälte. He advises in labour law, corporate law, commercial law and data protection. In the field of labour law, he advises international companies on restructuring, designing operational structures and managing work processes. In this context, co-determination (negotiations with works councils) and collective bargaining law are strongly relevant. He also specialises in compliance and data protection, company pension schemes and employee leasing.
About us...
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Müller-Volbehr Hitzer is a law firm specialising in labour law, based in Munich. We have many years of outstanding expertise in this field and represent companies, supervisory boards, board members, managing directors and executives. We advise our clients in all matters of individual and collective labour law and represent them in court throughout Germany and out of court. Our clients include corporate groups and medium-sized companies from the information technology, automotive, metal and electronics
industries, medical and laboratory technology, finance, media, education, fashion, wholesale and foreign trade, as well as the construction and gastronomy sectors. We also advise charitable institutions and NGOs. We maintain a long-term, trusting cooperation with our clients. Together with our clients, we develop individual solutions that take into account the business environment, the strategic scope and the situation of the people affected.
+49 89 2500 7833 1 mueller-volbehr@mvh-law.de irglobal.com/advisor/dr-gerd-muller-volbehr
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