- in Asia
- with readers working within the Pharmaceuticals & BioTech industries
Case study
A Swiss company is looking for a qualified employee for the position of "VP of Software Development International". The search for suitable candidates proves to be tough and lengthy.
During the ongoing search, it turns out that a new candidate not only has the required skills but is also a perfect personal fit for the company. However, he does not want to move to Switzerland under any circumstances but would like to work almost exclusively from his French home office.
The Swiss company is open to this request.
Question
What does the Swiss company have to consider if it hires the employee, but the employee wants to perform the work almost exclusively from the French home office?
Challenges & possible solutions
Employment law
The future employee will be subject to French labor law due to the predominant work activity in France. For this purpose, a French employment contract must be drawn up. Here, the integration of the Swiss employer's regulations must also be considered.
If French regulations are more advantageous than Swiss regulations (e.g. vacations, working hours), the more advantageous French regulations are generally decisive.
Social security
Due to the predominant work in the French home office, the employee will be subject to French social security. The Swiss employer is responsible for calculating and paying the social security contributions. However, this cannot be done from Switzerland alone but requires the support of a competent French payroll provider.
For the occasional Swiss working days, the A1 certificate for social security subordination in France must be obtained.
Income taxes
The Swiss company is also responsible for calculating and paying French income taxes. This responsibility cannot be delegated to the employee (anymore). Therefore, the French payroll provider also handles the French payroll taxes.
For any Swiss working days, Swiss withholding taxes are owed, which must be calculated, remitted, and deducted from the employee.
Permanent establishment
The Swiss company does not wish to establish a permanent establishment in France. It is, therefore, advantageous to exercise appropriate caution when drawing up the employment contract and to prohibit the employee from negotiating and/or signing contracts for the company in France. In addition, he should not be given power of attorney.
Payroll
The involvement of a French payroll provider is essential. The payroll provider will prepare the monthly payroll and handle any communication with the French tax and social security authorities. He will also be responsible for various other administrative tasks, such as finding a company doctor for the employee.
Work permit
The French employee does not need a work permit for France. For the occasional Swiss working days, however, a permit is mandatory. The best (and often the only) option here is the registration procedure (“Meldeverfahren”).
Conclusion
"Remote work” is becoming more and more the norm. Companies that are open to remote work and do not shy away from the initial effort in drawing up the employment contract and setting up the foreign payroll provide themselves with much greater access to qualified workers than companies that concentrate solely on the domestic market for skilled workers.
Overall, this case study shows that hiring a remote worker in another country involves numerous legal and administrative aspects that must be carefully planned and implemented to ensure smooth operations. Collaboration with local experts and service providers is often essential to meet the requirements of both countries.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
