Social security contributions in case of telework / home office
Employment / Immigration
In our article you will find answers to the question as to which social security system employees of Swiss employers are subject to if the employees live in the EU/EFTA area and work partly from home (telework/ home office).
What is it about?
Many employees of Swiss employers live in the EU/EFTA area. If they work partly from home (telework/ home office), this raises the question as to which social security system they are subject to. An important principle according to the Agreement on the Free Movement of Persons and the EFTA-Agreement is that anyone who works a "substantial part" of their job – i.e. 25% or more – in the country of residence must also be insured there.
With the (travel) restrictions imposed in the context of the Covid-19 pandemic, many frontier workers switched to home office in their respective country of residence. As a reaction to the changed working reality, the placement rules in the area of social security under the Agreement on the Free Movement of Persons and the EFTA-Agreement were interpreted flexibly in the case of telework/home office.
Thus, a worker employed by a Swiss employer in the EU/EFTA area continues to be subject to Swiss social security law, even if he or she works for a "substantial part" in the home office in the country of residence. Accordingly, the employee does not have to prove to foreign authorities that Swiss social security law applies to him/her by means of a certificate of secondment (A1 form).
What was decided?
Originally, it was intended that this flexible interpretation would be applied until the end of June 2022. However, on June 14, 2022, the members of the EU-Administrative Commission for the Coordination of Social Security Systems agreed to extend this practice of flexible interpretation regarding the placement rules until December 31, 2022. This is to take into account the continuing European-wide trend towards telework in the coordination of national social security systems. A corresponding extension of this flexible application of the placement rules also takes place within the framework of the Agreement on the Free Movement of Persons and the EFTA-Agreement and thus equally applies to Switzerland. For the time being, this does not change the current situation for employers and frontier workers in the EU/EFTA area.
What happens as of January 1, 2023?
The trend towards teleworking/ home office has reached the social security authorities. For this reason, efforts are currently underway to make the social security placement rules more flexible as of January 1, 2023, so that a certain proportion of telework/home office can be carried out in the country of residence without changing the competence for social security.
Employers who would like to enable their employees to telework/home office for a longer period of time are recommended to determine the corresponding framework at an early stage. Our MME team of experts will gladly assist you with any requests in this area. We are looking forward to hearing from you.