Get support from A&P

Regulation 883/2004: Smart Working and European Social Security Legislation

Regulation 883/2004 is a pillar of EU social security legislation. In this article, we will explain how the Regulation applies to remote working abroad.

Table of Contents

We are based in Italy

Chartered Tax Advisors

Quality ISO 9001 Certified

In the European context, the provisions of Title II of Regulation (EC) No. 883/2004 and its implementing Regulation (EC) No. 987/2009 are currently in force to determine the applicable social security legislation for smart working contracts.

For an overview of social security regulations at the international level, read our guide on Social Security in employment contracts.

Article 11: lex loci laboris

Under Article 11 of Regulation 883/2004, the lex loci laboris must remain the cardinal principle for determining the legislation applicable to an employee.

The fact that teleworking has become part of the organisation of work does not affect the full application of this principle. In fact, the location of an activity must be understood as the place where, in practical terms, the person concerned performs the actions related to that activity (see the judgment of the Court of Justice of the European Union C-137/11, Partena).

However, some exceptions to the lex loci laboris are possible, especially in the context of Articles 12, 13 and 16 of Regulation 883/2004.

Regulation 883/2004: Article 12

Article 12 of Regulation 883/2004 provides an exception to the general principle of Article 11(3)(a).

Any exception, in principle, must be interpreted restrictively. This rule is an instrument to facilitate the cross-border provision of services. It guarantees the stability of the social security legislation applicable to workers and avoids administrative complications for businesses.

However, it also covers other situations of temporary activity in another Member State, during which the workers may remain subject to the legislation of the country where they are insured.

In order for the rule to apply, the employee must be sent by the employer to another Member State to perform tasks on its behalf.

In the context of transnational provision of services, the document certifying that the worker remains subject to the social security legislation of the country of origin is Model A1.

Article 12 and teleworking abroad

Provided that the other conditions are met, teleworking in another Member State on behalf of the employer may be considered protected by Article 12 of Regulation 883/2004.

Of course, this rule only covers cases in which teleworking in another Member State is:

  • casual;
  • limited in time; and
  • does not fall within the pattern of usual employment. In the latter case, the application of Article 13 of Regulation 883/2004 must be considered.

As a rule, teleworking is in the interest of both employer and employee. It leads, in fact, to greater flexibility, greater efficiency and lower operating costs for the employer. These interests are generally not otherwise affected by teleworking across borders.

Therefore, occasional and limited remote working in another Member State on behalf of the employer is considered to be protected by Article 12 of Regulation 883/2004. Following the interpretation of the Administrative Commission for the Coordination of Social Security Systems, in fact, this rule applies to any instance of telework, explicitly agreed between employer and employee.

Consequently, workers who perform their remote working duties abroad for a period of less than 24 months will remain subject to the legislation of the first Member State.

Continuous, full-time telework in a Member State without any time limit is excluded from Article 12. In fact, it does not have an ad hoc or temporary nature and should be provided for a period longer than 24 months.

Article 13: Activities in two or more Member States

Part-time assignment, i.e. alternating activities at the employer’s premises and at a remote location on a temporary basis, is, in principle, a situation that should be subject to the performance of activities in two or more Member States (Article 13 of Regulation 883/2004). However, in practice, it may happen that a temporary, ad hoc situation to work abroad only leads to a brief interruption of the work pattern. To avoid an administrative burden, this can be regarded as a case of posting.

According to the Explanatory Note on Teleworking (AC 137/23) of 21 June 2023 issued by the Administrative Commission, Article 13 of Regulation (EC) No. 883/2004, in conjunction with Article 14 of Regulation (EC) No. 987/2009, must apply to teleworking.

In this circumstance, therefore, workers who habitually perform an employment activity in two or more Member States is subject to the legislation of the Member State of residence, if they perform a substantial part (25% or more) of their work in that State.

Regulation 883/2004: Article 16

Article 16 allows the competent authorities of two or more Member States to derogate from the previous provisions of Title II of Regulation 883/2004, by mutual agreement, in order to protect certain individuals or categories.

Pending an adaptation of Community regulations to the new smart working case, the European Commission has issued a Multilateral Framework Agreement on the application of Article 16(1) of the aforementioned Regulation, in case of habitual cross-border telework.

If the employer and employee, coming from States that are signatories to the agreement, wish to make use of the derogation provided for, the employee who habitually teleworks across borders in the State of residence for less than 50% of the total working time may be subject to the social security legislation of the State where the employer has its registered office or domicile.

Studio A&P offers support in obtaining the certificate of applicable legislation, to apply the legislation of the State where the employer is based, under the exception provided for in Article 16.

Find out more about our consulting services on transnational smart working.

Get a Free Quote

  • This field is for validation purposes and should be left unchanged.

Regulatory Framework

Explanatory note on telework (AC 137/23) of 21 June 2023 - Administrative Commission for the Coordination of Social Security Systems


Regulation (EC) n. 883/2004


Don't miss out on the latest updates

Get free updates from our Experts on Immigration, Posting Workers, International Taxation and more.