How to inspire top talents with flexible working models and keep legal and tax aspects in focus.
In today’s working world, flexibility is becoming increasingly important, both for employers and employees. One innovative option that has emerged in recent years is workation.
Workation combines work and leisure by allowing employees to work in an attractive location abroad. The employee thus relocates his home office to his vacation area abroad. This new way of working offers numerous advantages for companies, especially in terms of employee recruitment and retention. In this article, we will present everything you need to know about Workation as an unbeatable benefit. We will also look at the labor law, tax and social security aspects.
Workation revolution: working abroad as an unbeatable benefit
What is a workation and what does it mean for employers and employees?
A workation is a combination of work and vacation. Employees have the opportunity to complete their work tasks at any location abroad, while at the same time taking the opportunity to discover new cultures and experiences.
For employers, this means the opportunity to offer their employees an attractive benefit that strengthens employee loyalty and increases their appeal to top talents.
Employees, in turn, benefit from an improved work-life balance, an inspiring work environment and the opportunity to balance their professional and personal interests.
In this context, it is important to note that employees are not entitled to Workation. Ultimately, the employer determines the content, time and place of work performance by virtue of its right of direction.
What labor law conditions must be observed for a work assignment abroad?
In the case of a work assignment abroad, aspects of labor law must be taken into account in order to ensure legal certainty. First of all, it must be clarified whether German or foreign labor law applies. In this respect, a distinction must be made as to whether the workstation is within or outside the EU. In the case of employment in the EU, the European directives apply in particular, especially the so-called ROM-I-VO.
Occupational health and safety law is to be separated from this. The territoriality principle applies here, i.e. German employment protection law only applies within the borders of Germany. This includes, in particular, issues such as working time regulations and occupational health and safety provisions. It is important to ensure that the working conditions abroad correspond to the legal requirements in the host country, e.g. if holidays are to be observed in the host country on which work is not permitted, this also applies to Workation.
Clarification of visa requirements and work permits is also of great importance in order to avoid possible legal consequences.
Within the European Union, certain labor law framework conditions apply, which are also relevant for working abroad in the EU. The EU directives on labor law guarantee, among other things, minimum labor standards such as working hours, rest breaks and minimum vacation entitlements, which apply uniformly in the EU member states. Nevertheless, specific rules and regulations of the host country may exist in the EU foreign country, depending on national laws and collective agreements…
When working abroad in the EU, employers and employees benefit from the common European standards, but at the same time should observe the specific labor regulations of the host country in order to avoid possible legal risks.
How can HR manage the organizational and legal challenges of a workation?
HR plays a critical role in the successful implementation of a workation. It should draw up clear guidelines and agreements for workation offerings and ensure that all legal requirements are met.
In particular, there should be binding regulations in advance on which employees belong to the group of beneficiaries and which conditions apply to both utilization and termination. It already follows from the legal provisions of the Nachweisgesetz that the employer must hand over the essential (changed) working conditions before departure if the workation lasts longer than 4 weeks. Pursuant to Section 2 (2) NachwG, action is only required to adjust the terms and conditions of the employment contract accordingly if the work assignment abroad lasts longer than 4 weeks. This can be done within the framework of a (temporary) supplementary agreement under employment law to the employment contract. Communication with employees about their rights and obligations during the work assignment is therefore essential.
Rights and obligations may include, for example, the scope of work and working hours, availability during workation, use of company resources and confidentiality of information.
It is important that the employee is able to perform his or her duties effectively during the Workation while complying with applicable labor laws and regulations in both the home and host countries.
Human Resources can also assist in selecting appropriate locations that meet legal requirements and provide employees with an optimal work environment.
What tax aspects need to be considered in the case of a workation, both for the company and for the employees?
In the case of a work assignment, tax aspects can arise for both the company and the employees. Depending on the duration of the stay, the resulting issues such as tax permanent establishment or tax liability abroad must be clarified. It is important to understand the tax implications in the company’s home country and in the host country. Aspects such as taxation of income and permanent establishment regulations should be considered.
Employees may face questions about the taxation of their income, social security and possible double taxation. Professional tax advice is advisable to minimize potential risks and ensure tax compliance.
What are the social security implications of working abroad and how can you minimize potential risks?
A workation abroad can have implications for social security obligations. It is important to check whether social security contributions must continue to be paid in the home country or whether insurance is required in the host country. In this regard, the regulations of the EU Social Security Regulation, bilateral agreements and the specific regulations of the host country must be taken into account. A thorough examination of the social security implications and, if necessary, expert advice are recommended in order to minimize potential risks.
Which countries are particularly suitable for a workstation and what special features apply there with regard to labor law and social security?
When selecting a suitable location for a workation, both labor law and social security aspects should be considered. Some countries have special regulations and benefits for digital nomads and remote workers that facilitate a Workation. It is important to check the legal framework of the host country in terms of labor law, taxes and social security. Careful research and, if necessary, legal advice can help find the ideal destination for a Workation.
What technical and legal measures should be taken to ensure data protection and IT security during a workation?
The security of data and IT systems is an essential aspect during a workation. Companies should ensure that their employees have access to secure networks and can access sensitive data via encrypted connections. In addition, clear policies on data privacy and security should be communicated during the workation. Careful selection of tools and technologies, as well as training on secure use, are also recommended to ensure IT security and avoid data breaches.
Workation can be an unbeatable benefit for companies and employees alike. It offers the opportunity to combine work and vacation experiences and create a new kind of work environment.
The “home office abroad” project should therefore be planned with foresight. Otherwise, the employer and also the employee run the risk of violating applicable laws – possibly abroad. Especially when employees are not only temporarily working abroad, the effort for HR departments can increase significantly.
Do you have questions about Workation and working abroad?
If you have any questions or need support regarding Workation and the legal aspects, please do not hesitate to contact me.
Your Christian Seidel
Our expert for questions in the area of labor law
Lawyer, Specialist in labour law
Authorised signatory of ACCONSIS GmbH Rechtsanwaltsgesellschaft
+ 49 89 547143
or by E-Mail firstname.lastname@example.org