The Administrative Commission for the Coordination of Social Security Systems of the European Commission has published a guiding memorandum on international telework and the Social Security system applicable in cases in which services are provided remotely under the framework of the European Union.
International telework continues to be the great unknown in our legal system, as it currently lacks specific definition and regulation. The uncertainties as to its extension are numerous. However, for some time (especially since the COVID-19 pandemic), there have been claims that are allowing us to outline international telework and its relationship to the regulations governing Social Security.
One of these claims is by the European Commission which, through its Administrative Commission for the Coordination of Social Security Systems has issued a guiding memorandum for the application of Regulations 883/2004 and 987/2009 on the coordination of Social Security with the international telework regime.
What is particularly innovative is the definition introduced by the memorandum of international telework, given that no national or international regulation has described it until now. Essentially, the European Commission considers international telework as work: (i) performed outside the employer’s premises or place of work at which professional activities normally take place, (ii) performed in a Member State other than that in which the employer’s premises or place of work is located and (iii) uses technology to connect to the company or working environment, as well as to clients, in order to perform the tasks assigned by the employer or client, in the case of independent contractors.
To complete this definition, the Commission has established other terminology limits: the concept only covers the same activities performed by the worker and telework is subject to an agreement between the worker and the Company, in accordance with the applicable national legislation.
In addition, based on the principle of lex loci laboris (general rule that the Social Security law is that of the place in which the services are provided), the memorandum determines the exceptions to the principle that may be applied under the framework of international telework (interpreting articles 12, 13, 14 and 16 of Regulation 884/2004). The memorandum therefore establishes the following guidelines:
- The exception to lex loci laboris allowed by article 12 of Regulation 883/2004, thus maintaining the application of the Social Security legislation of the country of origin in the country of destination, in the case of temporary displacement, may be interpreted to cover cases of temporary international telework. In such cases, telework cannot form part of the normal provision of services and must be temporary. The Commission notes as examples cases in which the worker temporarily teleworks from another Member State to facilitate the care of a family member or to focus on a specific project.
- The memorandum also deals with cases in which international telework is performed in more than one Member State, in other words, forms part of a habitual and permanent system of providing services, under a prior telework agreement. These are cases commonly known as multi-country work, in which a worker may provide services on several days per week or month in another Member State.
In such case, the Commission clarifies the applicable Social Security legislation, stating that it may continue to be that of the State of residence, if a substantial part of the activity is conducted therein. The criteria of 25% is still used -of the majority of the activity -as a reference to evaluate whether such services are substantial. This criterion must be analyzed with certain flexibility, according to the specific case at hand.
- In all other cases, the memorandum recalls the possibility established in article 16 of Regulation 883/2004 that Member States may reach a specific agreement to apply exceptions to the general rule of lex loci laboris, which could provide solutions for special legal situations such as the provision of services under an international telework scheme.
A specific agreement may be reached between two or more Member States for particular cases or groups of people. Nevertheless, this is still a recommendation, as it is the authority of the Member States.
Although the memorandum is orientative, it may serve as a guide in the international telework labyrinth (at least in relation to the coordination of Social Security). It will be interesting to see how our Law 10/2021, of July 9, 2021 on telework fits together with these guidelines, from a legislative and judicial.