Since the Covid 19 pandemic, companies have been increasingly confronted with the challenge of fulfilling employees' requests and demands for more home office days.
In recent years, companies have tended to grant cross-border workers a maximum of one day per week from home, particularly for social security reasons. During the pandemic and the transitional arrangements until 30 June 2023, home office work could be granted flexibly.
With the new teleworking regulation, which came into force on 1 July 2023, there was great hope that as a company there would be no restrictions on the granting days for working from home. The regulation stipulates that up to 49.9 % of working hours may be worked from home without any change in social security status.
This teleworking regulation only applies to EU or EFTA nationals residing in Austria, Belgium, Croatia, Czech Republic, Finland, France, Germany, Italy, Liechtenstein, Luxembourg, Malta, Norway, Poland, Portugal, Spain, Sweden, Switzerland, Netherlands, Slovenia, Slovakia
However, the regulation also contains a few other aspects that somewhat cloud the "joy" of this new teleworking regulation. These include the fact that the following points are detrimental or may hurt the granting of the 49.9 % home office days in the country of residence:
- Other regular gainful employment in the country of residence: This can be employment with another employer, regular customer visits regular work in a company of the employer in the country of residence, or self-employed secondary employment.
- Carrying out an additional activity in another EU or EFTA member state: This can be, for example, regularly visiting the subsidiary.
- Additional employment with an employer in another EU or EFTA member state
If one of the above points applies, the original 25 % rule applies, i.e. the employee may be employed for a maximum of 24.9 % in the country of residence to avoid "slipping" into the social security system in the country of residence.
Situation
Peter Müller lives in Constance (Germany) and is a German citizen. His parents run their hotel in Munich, where he has occasionally helped at weekends. For this reason, he does not want to move away from Constance.
Mr Müller is employed as a software developer at IT Innovation AG in Zurich (Switzerland). So far, he has been able to work from home (Constance) two days a week. His line manager is very happy with him and does not want to lose him as an employee under any circumstances.
However, HR has informed Mr Müller that he will only be allowed to work from home one day a week from 2024.
For Mr Müller, the prospect of having to work on-site in Zurich four days a week and commute accordingly is unthinkable, and he is considering whether it would be better for him to change jobs.
What options are there for this?
From a permit law perspective, IT Innovation AG must obtain a cross-border commuter permit for Mr Müller, which is valid for 5 years in the case of an open-ended contract. The number of days on which a person physically comes to Switzerland is irrelevant. From a tax perspective, Mr Müller is considered a "genuine" cross-border commuter, which means that IT Innovation AG must deduct 4.5 % from his salary. This is also the final Swiss tax rate. In Germany, Mr Müller still has to submit a tax return and have his earned income taxed, taking into account the taxes paid in Switzerland.
From a social security perspective, however, the situation is not quite so simple.
Mr Müller cannot benefit from the new teleworking regulation if he continues to help his parents at the weekend. This means the following:
- Further secondary employment with his parents in Germany
- A maximum of 24.9 % working from home for IT Innovation AG: Mr Müller can remain insured under the Swiss social security system
- More than 24.9 % working from home for IT Innovation AG: Mr Müller can no longer remain insured under the Swiss social security system but must be subject to the German social security system.
- No further secondary employment with parents in Germany
- Maximum 49.9 % work from home for IT Innovation AG: Mr Müller can remain insured under the Swiss social security system.
The decision to grant the previous 2 days as a home office depends on the one hand on how important the part-time job with his parents is to him and on the other hand on whether IT Innovation AG would be prepared to set up payroll accounting in Germany for him and settle the German social security contributions accordingly. However, Mr Müller must also agree to the switch to the German social security system.
The biggest differences are:
- Negative aspects: The discontinuation of the Swiss pension fund and the receipt of benefits from the Swiss system
- Positive aspects: Employer participates in the German health insurance contributions
There are therefore various possible solutions that can be discussed with Mr Müller.
Conclusion
The working-from-home activities of cross-border commuters continue to pose certain challenges and in practice, the complexity has not diminished, even with the new teleworking regulations.
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.