Since the outbreak of the Covid-19 pandemic, many employers have asked members of their staff to work remotely. Some employees want to work abroad without notifying their employers of that fact. This situation may result in complications both for the employee and the employer.
Article 3.1 of the Anti-Crisis Shield Act provides that during the Covid-19 pandemic and for three months after it is lifted, employers may instruct their employees to work outside their regular place of work. This provision does not specify where remote work is to take place, and in particular whether such work must be performed in the territory of Poland. It is quite commonly assumed that such work may also be done outside the territory of Poland. Remote work abroad, however, may give rise to issues related to employment law, social security, taxes or immigration.
In line with Article 3.3 of the Anti-Crisis Shield Act, employees working remotely must have technical capabilities and suitable space to do such work outside the place of their regular employment, and employers must provide the equipment necessary for work, even if it is done abroad. Employers may withdraw the instruction to do remote work at any time, which in the case of work abroad may create practical problems as during the pandemic an immediate return from abroad may prove to be a challenge. Employers should consider introducing remote work by-laws that stipulate, among other things, an employee’s obligation to specify the place of remote work as well as rules for return to in-office work. With certain types of work requiring prompt arrival to the workplace, such by-laws may also provide that the selection of remote work locations is limited to the areas close to the place of regular work so that an employee is readily available if needed. The employer may also expressly prohibit remote work abroad in such by-laws.
Remote work abroad may involve an obligation to obtain a residence permit and a work permit in the country of residence. In the EU member states, the free movement of labour principle applies and no work permit is required. There are, however, certain requirements concerning the registration of stay; stays for up to 90 days do not need to be registered, but certain conditions must be met in order to legalize longer stays. Outside the EU, legislation of the countries where employees stay need to be considered individually. Performance of remote work in a country where an employee only holds a tourist visa that does not permit them to work may be illegal. Each trip abroad with an intention to work remotely should be preceded by checking whether the country concerned imposes (or not) any restrictions on remote work.
Tax issues connected with remote work may be another obstacle. Generally, Polish employees are tax residents in Poland if they stay in Poland for at least 183 days per year or have a centre of vital interests here. Otherwise, they will be most often subject to taxation in the country of their residence. In certain cases, remote work performed abroad may result in the employee being subject to taxation in the other country or in both countries, if he or she has no tax residence in Poland. In such situation, the employer would have to appoint a tax representative in the state of the employee’s residence.
Social insurance gives rise to similar concerns. Regulation (EC) No 883/2004 of the European Parliament and of the Council on the coordination of social security systems provides that an employee may be subject to one social insurance system, namely the system of the country in which he or she actually works. Remote work may often result in an obligation to pay contributions in the country of the employee’s stay, and not in the country of the employer’s registered office. Work abroad may result in higher social security contributions. This obligation may be waived by applying rules for employee secondments under international agreements, for example, in the case of a secondment to the US. It is important to note here that employees who are not subject to local social security systems may have no access to public healthcare services.
Secondment of employees to deliver services within the EU is a solution helping employers avoid additional burdens connected with taxes and social security contributions. Such secondment may not exceed 18 months, and in certain cases employees should receive per diems and fixed-amount hotel accommodation refunds, and sometimes statutory minimum wages applicable in the country of residence. In addition, in certain countries, such as France for example, a special representative of the employer must be appointed who will retain employee documentation in the territory of the French Republic.
To summarize, remote work abroad is generally permitted but employers should be cognizant of many legal restrictions obligations related to the issues discussed above. Employers should be particularly careful about establishing the place of remote work, as such work abroad may have legal consequences including the obligation to pay contributions and taxes in the countries where remote work is actually performed.