New social security rules for cross-border telework from 1 July 2023

During the second half of April 2023, the previously announced coordinated solution for cross-border remote work has been published. The 27 member states of the European Union, Norway, Iceland, Liechtenstein, Switzerland, and the U.K.* have been invited to sign a new draft of framework agreement for social security.

The framework agreement should provide an opt-in to employees and employers to maintain social security coverage in the country of the employer when an employee works from home in another country less than 50% of the total working time. This agreement is only applicable to telework, where the employees work from home in their residency country using information technology with an ongoing access to employer’s environment.

The date of the framework agreement entering into force is set as of 1 July 2023 for signatory countries. (This date is not a random one. It follows the end of the “no-impact policy” period lasting until 30 June 2023, during which, under certain circumstances, the employee remains covered by the social security in the country of employer even if performing telework from country of his residence exceeding 25% of total working time.) If the framework agreement is signed after 1 July 2023 by any country, agreement will be applicable from the date of signature, not retroactively. Very important condition for application of the framework agreement is filing of an application to opt-in (if no application is filed, the applicable social security for the employee and the employer would be determined using standard rules / provisions of the EC Regulation No. 883/2004, i.e. the limit of less than 25% for the telework from the country of employee’s residence would be applied).

Belgium has actively participated on preparation of the framework agreement wording and has already confirmed their intention to sign the framework agreement. As we informed you in our previous Article, Austria recently signed bilateral framework agreements with several neighboring countries with the limit for the telework up to 40% of time. It is therefore questionable, how Austria would approach this multilateral framework agreement.

For more information (including the link to English wording of the framework agreement), please reach out to the following article EU – New Framework Agreement for Social Security - KPMG Global.

We will keep you updated on further developments in this area. If you are interested in this topic and need more information, do not hesitate to contact us.

*For the U.K., the framework agreement would be applicable with certain limitations.