EU agreement on remote work
Some EU Member States have signed a framework agreement on cross-border telework. It will enter into force on 1 July 2023. According to the Agreement, an employee working and teleworking in two different EU countries can be insured, under certain conditions, in the country where the statutory seat of their employer is established (instead of in their own country of residence).
As a rule, if a teleworker physically works in different EU countries, their social security is determined under the EU Regulation on the social security of employees working in different EU countries. For example, if an employee does a considerable part of their work telecommuting from their country of residence, the legislation of the employee’s own country of residence is applied.
The Framework Agreement on cross-border telework provides the possibility to deviate from this rule. Based on the Agreement, the employer and the employee can apply for an exception to the rules in the EU Regulation on social security so that the social security legislation of the country where the statutory seat of their employer is established is applied to the employee.
Conditions for applying the Framework Agreement on telework
- The Framework Agreement is applied only to employees who move between countries that have signed the Agreement. The list of countries which have signed the Agreement so far is updated on this webpage. It is possible to join the Agreement also after 1 July 2023, so the list of signatory Member States continues to be updated. Around 20 EU countries have expressed their intent to sign the Agreement.
- The Framework Agreement applies only to cross-border teleworkers who telework in their country of residence via a digital (IT) link to the employer’s infrastructure and who work for the rest of the time in the country where the statutory seat of their employer is established.
- The employee must do telework in their country of residence for at least 25% but less than 50% of their total working time. The remaining time, that is, at least 50% of the working time, must be done in the country where the statutory seat of their employer is located.
- The employer and the employee must both want to apply the Framework Agreement on cross-border telework and to deviate from the rules of the regularly applied social security legislation.
The Framework Agreement on cross border work does not apply to
- self-employed persons, grant recipients or officials,
- work that is tied to a certain location,
- employees who have only one country of work, and
- employees who have more than two countries of work or several employers in different countries.
The employee resides permanently in Germany. The employer is a company with its statutory seat in Finland. The employer and the employee have agreed that the employee must work in Finland for at least 50% of the working time. The rest of the working time, the employee teleworks from their home in Germany, their country of residence.
Since the employee does a considerable part (more than 25%) of their working hours in their country of residence, the employee should be covered by the social security legislation of Germany, the employ-ee’s country of residence. Since both Finland and Germany have signed the Framework Agreement on cross-border telework, the employer can apply for an A1 certificate and an exception from Finland based on which the employee’s social security is arranged in Finland. Using the exception procedure requires that the employee agrees to it.
The employee resides permanently in Estonia. The employer is a company with its statutory seat in Fin-land. The employee telecommutes from home in their country of residence (Estonia) for two days a week. The rest of the week, the employee works in Finland at their employer’s office, as well as at the premises of their subsidiaries in Lithuania, the Netherlands and Belgium.
Since the employee does a considerable part (more than 25%) of their working hours in their country of residence, the employee should be covered by the social security legislation of Estonia, the employee’s country of residence. Although both Estonia, Finland and the other countries in which the employee works have signed the Framework Agreement, the Agreement cannot be applied since the employee also works in other countries than their country of residence or the country where their employer’s statutory seat is established. The A1 certificate must be applied from Estonia, the employee’s country of residence. The Finnish employer must insure the employee under Estonian social security legislation. The Framework Agreement does not apply.
Applying for an exception under the Framework Agreement
Based on the Framework Agreement on cross-border telework, it is possible to apply for an A1 certificate under the Framework Agreement as of 1 July 2023. The certificate cannot be applied for before 1 July 2023.
The A1 certificate under the Framework Agreement must be applied for from the social security authority in the country where the employer’s statutory seat is established. In Finland, the application for the A1 certificate must be submitted to the Finnish Centre for Pensions. If the Framework Agreement can be applied to the employee, the Finnish Centre for Pensions will grant the A1 certificate to attest coverage under Finnish social security legislation.
The employer must make the application for the A1 certificate via the eServices of the Finnish Centre for Pensions. The employer fills out the application form for the A1 certificate and confirms the following in the section “Additional information” on the form:
- The employer and the employee want to arrange the employee’s social security under the Framework Agreement on cross-border telework in Finland.
- The employee teleworks in their country of residence for 25–49% of their working time and, for the rest of the time, in Finland, the country where the employer’s statutory seat is established.
The application of the Framework Agreement must be applied for in advance and, as a rule, the A1 certificate under the Framework Agreement can be issued from the time of application forward. The Finnish Centre for Pensions can grant the A1 certificate under the Framework Agreement for a maximum of three years at a time.
If the employee’s work and residence continue unchanged after the A1 certificate’s period of validity ends, it is possible to apply for a new certificate for the employee. If the circumstances of the employee change during the validity period of the certificate, the Finnish Centre for Pensions must be informed of the changes.