With the end of the pandemic in most parts of the world, many organizations have been requiring hybrid roles and a partial return to the office. But many employees do not want to say goodbye to the cherished freedom of remote working, and ideally, some would like to work from holiday destinations.
While the post-pandemic world is adapting to new work environments as the virtual one, German employees aren't allowed to work remotely from abroad, as the Labour Court of Munich has ruled.
Experience: work abroad denial
A German IT citizen who wanted to be an expatriate in Switzerland wasn't allowed by her employer to work remotely due to legal issues and risks associated with foreign employment. The employee then applied for an interim injunction in court to have her request authorized. However, the Munich Labour Court has ruled that she did not have the right to work remotely from Switzerland, and her employer was allowed to refuse her request.
The employee who wanted to be an expat in Switzerland had been living there for years. She wanted to work from her partner's flat in Basel and exercise the fundamental right to have a family living there. Even before the pandemic, she had worked for long periods in Switzerland. Many of her colleagues also worked from abroad; in particular, one of her superiors worked from Switzerland.
Despite the increase in working flexibility in the post-pandemic world, the court ruled the employee had no claim to be allowed to work temporarily from Switzerland. The Munich Labour Court has clarified that, in principle, there is no entitlement to ‘workation' or right to work from home abroad. It remains the case that the employer determines the place of work, not the employee. Employers who want to allow their employees to work abroad should keep an eye on the complex issues involved (registration regulations, work permits, visas if necessary, effects on labour law, social security law and wages and tax law, etc.) from the very beginning and German companies which don't want to allow remote work from abroad, aren't obliged to.
Basically, German expats can work remotely while employed by a German company and live abroad if their employer gives permission. In some cases, the employment agreement will be adjusted, for instance, becoming a contractor of the firm instead of the employee. Remote workers must comply with all residence and work permit rules in the country of stay.
Employment law
If the employee started employment in Germany, typically, the German employment law regulations will apply. This would also continue to apply to temporary opportunities abroad. However, the statute of the law might change if the parties agree that the employee is allowed to work in the future permanently from another country. In terms of taxes, the company should also check if there is a real risk that the employee who is working abroad from home will create a permanent establishment. This very much depends on the individual facts of the case and especially on the position and authority of the employee.
Countries here remote work overseas is an issue
UK
Most UK employers will not accept employees based outside the UK unless expats are contractors or set up as an independent Ltd company.
US
North American citizens should have visas for working overseas. The duration of each visa depends on its purpose, with an average length of one year. US employees can work remotely from abroad on a simple tourist visa when planning their stay abroad as well.
Spain
From a tax perspective, expatriates working for Spanish companies can work from abroad for as long as they want. However, if the employee wants to continue being a tax resident in Spain, they must stay in Spanish lands for at least 183 days a year.
