“Workation” or remote work from abroad? What you need to know as an employer

Applicable law governing the employment agreement

Firstly, working from abroad carries legal implications vis-à-vis the employment agreement. This is determined under international law, more specifically the Rome I Regulation.

Provided that the parties have selected the governing law in the employment agreement, this choice of law will typically apply pursuant to the Rome I Regulation. Once an employee, however, performs work from abroad whether temporarily or on a structural basis, this can have immediate consequences for the applicable labor law rules. Note the following:

• A short workation can already lead to a complex legal situation. Under the Rome I Regulation, the provisions of “overriding mandatory provisions'' of the country where the work is factually performed always apply. These are rules that a country considers so essential to the protection of its public interests (e.g. political, social, or economic interests) that they must be applied to all individuals within the country’s jurisdiction, regardless of the law agreed upon by the parties. These may include rules regarding the minimum wage, working hours, and working conditions. 
• If the time spent abroad extends over a longer period (e.g. several months each year), a second far-reaching mechanism comes into play. The Rome I Regulation stipulates that a choice of law may not result in an employee losing the protection afforded by the mandatory provisions of the country from which they habitually perform their work. In the case of structural remote work, the country where the employee habitually carries out its work may shift unnoticed from the Netherlands to a foreign country. When that is the case, it must be assessed which provisions in that country qualify as mandatory, and subsequently whether these rules offer the employee greater protection than the chosen law. If that is the case, those foreign mandatory provisions take precedence (e.g. the local dismissal regime) with potentially far-reaching consequences for the employer.

In short, when working from abroad, employers are faced with the simultaneous application of multiple legal systems, which must be taken into consideration. 

Work and residence permits

Employees who are nationals of an EU/EEA member state or Switzerland may work and reside in another European country without requiring a separate work or residence permit.

Employees with different nationalities do not have these rights. Even if they hold a valid work and residence permit from one EU/EEA country or Switzerland, they do not automatically have permission to live and work in another European country. Additionally, individuals working outside the EU may face different visa and work permit requirements, whether they are EU/EEA citizens, Swiss nationals or third-country nationals.

Employers must assess which immigration law obligations apply in the relevant country prior to a workation or a period of remote work.

Health and safety in remote work

An employer in the Netherlands has a legal duty of care toward its employees. This means that an employer must ensure a healthy and safe working environment and take all reasonable measures to prevent an employee from suffering harm in the course of their work. This duty of care does not end at the Dutch border, but also extends to work performed from abroad.

Specifically, employers are required to ensure that workspaces are ergonomically designed. An exception, however, applies when this cannot reasonably be expected of the employer, such as when work is done occasionally and briefly at another location. This exception generally applies to short-term workations.

In addition, an employer must, for example, monitor employee workloads and limit psychosocial stress, even when employees are working from abroad. It is also strongly recommended that risk inventory and evaluation (RI&E) be adapted to the specific risks of working abroad.

Illness

When an employee works from abroad, especially for an extended period, the consequences of long-term illness must be considered. In principle, Dutch rules regarding continued pay during illness, reintegration and monitoring apply. The country of employment may have its own mandatory rules on illness, for example regarding sick-leave procedures, medical examinations or the involvement of local (i.e. company) doctors, which may result in overlapping obligations across multiple legal systems, and increased administrative responsibilities for the employer.

Temporary remote work from another country affects labour law. While a brief workation usually comes with manageable consequences and considerations, these can escalate quickly if an employee stays abroad for extended periods. Tax, social security, and insurance must also be considered. Companies are advised to establish a thorough policy and clear internal procedures to manage risks and expectations of employees.

Would you like to know more on developing policies for temporary cross-border work? Please contact us, we look forward to discuss this with you.