Since the health crisis related to the Covid-19 epidemic, the practice of remote work has been boosted, resulting in a variety of relatively complex situations. If the practice existed in the past, it is now quite common to see employees requesting to work remotely abroad, in another European Union country. These situations are not without consequences for the employee concerned and for the employer. They are all the more problematic as the law is often silent on the subject. Attention: the essential question of the residence permit outside the Union will not be examined in this article, as it is intended to focus on remote work within the European Union.
Overview of the issues which are likely to arise:
- Which law governs the employment contract?
This may seem like a simple question, but employers still have limited control over it. The rule is that the parties are free to determine the law applicable to the employment contract when they conclude it. However, in some cases, the parties have not made a choice.
In such a case: (i) if the applicable law cannot be determined, the employment contract is governed by the law of the country in which, or failing that, from which, the employee usually carries out his/her work; (ii) failing that, the applicable law will be that of the country in which the premises which hired the employee are located; (iii) if it results from the circumstances surrounding the employment relationship that the employment contract has strong links with another country, the law of that country will then be applicable.
In any event, whatever the applicable law chosen by the parties, the employee cannot be deprived of the protection afforded by the provisions from which there can be no derogation (“rules of public order”).
If we take a simple example of a French employee, having concluded an employment contract in France with the application of French law, working remotely from Italy for family reasons: the applicable law will be French law (the law provided for in the employment contract) and the Italian public order rules (these public order rules may concern, in particular, the minimum wage, working hours, the health and safety of employees, or the dismissal procedure) will also apply to the employee.
- What is the employer’s responsibility?
If we take the example of France, the presence of a remote worker exposes the home employer to the respect of the safety obligation which requires the employer to take all necessary measures to ensure the protection of the health and safety of the employee (monitoring of the workload, organisation of the working time, provision of the necessary means adapted to the exercise of the missions, etc.).
Under these conditions, the employer, when faced with a request for remote work from an employee in a Member State, must be very vigilant and systematically check the imperative obligations existing in the host country in order to take all appropriate measures and avoid any subsequent difficulties. It is worthwhile checking with your insurer to make sure that the employee concerned is well covered.
- What taxation for the remote worker?
This is an important question that the employee will necessarily ask himself: that of the place of taxation, the financial consequences of which are far from neutral, as income tax is not the same in France and in Ireland!
In principle, any person is considered to be resident for tax purposes in France if he/she lives in a stable and permanent manner in France or if he/she carries out a professional activity in France, whether or not it is salaried, unless it is secondary.
As a consequence, a foreign remote worker who would come to live permanently in France and who would have established his/her tax residence in France will have to declare his/her income and pay tax on all his/her income in France. Similarly, a remote worker who would move to another Member State could, in the same way and in the absence of special circumstances, be required to comply with the tax law of the host State.
Thus, these tax considerations should be discussed and clarified before the actual application of remote work of an employee within a Member State.
4) What social protection for the employee?
Once again, the subject is not neutral issue in that it involves significant variations in social security contributions to be paid from one Member State to another. Except in the case of temporary secondment, when the person is employed in a Member State, he/she is subject to the legislation of that Member State.
Consequently, a remote worker from a Member State who usually carries out his/her duties in France should be subject to French social security legislation, and vice versa. This affiliation will not be without consequences for the employer, since the latter will then have to register with the social security services and draw up pay slips in accordance with local French legislation. It is recalled that when the person is employed in two or more Member States, he/she is subject to the legislation of the Member State of residence, if he/she carries out a substantial part of his/her activity in that Member State (at least 25% of the overall activity assessed in terms of working time and/or remuneration for employees).
As the impact of remote work can be significant, companies are invited to carry out a detailed audit on the social policy laws applicable in the host countries; the rights and obligations of employers; the social and tax implications and on the formalities which may be required in the host country in order to regulate these remote work situations and thus avoid any difficulties with these employees.
As remote work has intensified following the health crisis of 2020, there is still little case law on these issues. However, it is likely that these situations will give rise to extensive litigation in the years to come.
Before letting your employee work remotely abroad, ask yourself the right questions!
The LERINS labour law team is at your disposal for any further information.
 Regulation (EC) No 593/2008 of June,17th 2008 on the law applicable to contractual obligations (Rome I)
 Article L.4121-1 of the labor code and seq.
 Articles 4A and 4B of the General tax code
 Article 13 §1 of the Regulation No 883/2004