Nové podmínky pro přeshraniční práci na dálku v oblasti pojištění

New conditions for cross-border teleworking in insurance

With effect from 1 July 2023, the social security conditions for employees working remotely from another country will be simplified. The Czech Republic (CR) will start applying the new Framework Agreement adopted at EU level in relation to cross-border telework in the field of social security. Its aim is to allow, under certain conditions, employees who work for their foreign employer from their country of residence to remain automatically covered by the insurance system in their employer's country.

The Czech Republic already applies a similar procedure in the case of Austria and Germany on the basis of bilateral agreements concluded with these countries in March 2023 (we reported HERE).

The affiliation to the insurance system will have to be proved by an A1 certificate according to Article 16 (the so-called exemption) issued by the competent institution in the country of the employer (in the Czech Republic, the Czech Social Security Administration).

Below we summarise the basic parameters when it will be possible to use the Framework Agreement in order to remain insured in the country of the employee's employer:

• From the country of residence, the employee usually works remotely for his/her foreign employer for at least 25% and less than 50% of the working time.
• The employee is in contact with the employer's working environment by means of information technology and his/her activity meets the established definition of telework (i.e. it does not involve, for example, manual activities or presence at a branch in the country of residence).
• Both the employer's country of residence and the employee's country of residence are signatories to the Framework Agreement (see below for the current list of countries).
• The employee may pursue other employment (even for another employer) in the same country as the country of residence of the employer in which he/she wishes to remain insured under the Framework Agreement. However, he/she may not carry out employment for (another) employer in any other Member State (i.e. not even in the country of residence for another employer) or self-employment. Persons who are wholly self-employed are not covered by the Framework Agreement.
• The employee and the employer shall apply for an Article 16 A1 certificate under the Framework Agreement in the employer's country of residence (reference to the Framework Agreement should be made in the application).

The Framework Agreement can only be used in relation to countries that have acceded to it. At present, in addition to the Czech Republic, this includes Slovakia, Austria, Germany, the Benelux countries, Finland, Norway, Switzerland and Liechtenstein. Some other countries are still negotiating accession, while the UK has already rejected accession. The bilateral agreements with Germany and Austria will be replaced by this new Framework Agreement.

It will be possible to apply for an A1 certificate under the Framework Agreement (exemption) for a maximum period of 3 years, but repeatedly. If the conditions are met, the exemption will be granted automatically. The application must be made in the country where the employer is based.

During the transitional period until the end of June 2024, it will also be possible to apply retroactively to 1 July 2023, provided that social security contributions have been paid in the country of residence of the employer up to that date. For applications submitted from July 2024 onwards, it will only be possible to apply retrospectively for a period of 3 months (again, subject to previous payment of insurance in the country of residence of the employer).

Further information, including practical examples, can be found on the Czech Social Security Administration website HERE. We will continue to monitor further developments.

If you have any questions, please contact the author of this article or the EY team you are working with.

Author:

Radka Růžičková