Working from home: can it be done from a second home as well?

Now that many have become accustomed to working from home full-time as a result of the COVID-19 crisis, the question as to whether an employee can work from home abroad for an extended period sometimes arises.

For example, an employee who does not need to be physically present in the office can work from his or her holiday home during the winter months or live and work with family abroad for a few months. However, there is the question what legal consequences this would entail.

Both article 119.4 of the Act on Employment Contracts (for working from home) and article 6 of collective bargaining agreement No. 85 (for teleworking) require that the place chosen by the employee to usually carry out his work is included in the employment contract. Hence, the employee has a clear obligation to inform the employer in advance of the plan to work abroad for a longer period and to sign an addendum to the employment contract modifying the initially agreed place of work.

Moreover, in terms of applicable national employment legislation, the question arises whether the employee may invoke rights under the employment legislation of the country where the employee is temporarily working. The Belgian Act of 5 March 2020 concerning the working, remuneration and employment conditions in case of posting of workers in Belgium and the compliance thereof (being the transposition of European Directive 96/71) provides, for example, that an employee who comes to Belgium to work temporarily for a foreign employer, shall comply with all provisions of Belgian labour law from the first working day in Belgium, the violation of which is punishable. Hence, if an employee normally works in France, but is now working from his holiday home in Belgium, this employee is suddenly entitled to a 13th month payment in the sense of Belgian law for the period worked in Belgium, even if such a 13th month payment does not exist in France.

In terms of social security, the basic rule, both under Regulation (EC) No. 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems and under the various bilateral treaties concluded by Belgium, provides that those who work in only one country are covered by the social security system of that country. Those who work in several countries, including a substantial part in the country where they live, are covered by the social security system of that country. However, such situations can lead to discussions on where the employee is deemed to live. In order to avoid any discussion, it is therefore recommended to meet all requirements of a temporary posting.

Finally, there are also the tax aspects to consider. Although the double tax treaties concluded by Belgium may differ in terms of specific arrangements, the basic principle remains that an employee who works in a certain country for more than 183 days during a 12-month period, is taxable in that country. It is therefore recommended to agree in the employment contract that a period of employment abroad will remain below this threshold. Otherwise payroll tax would likely be due in the country in which the employee is working from home, instead of in Belgium.

It is recommended to limit the time periods in which an employee can work from home abroad, given the possible consequences in terms of labour law, social security and taxes, but there is no fixed threshold below which there is no risk.

Three ways businesses can reduce wage costs without cutting headcount in the wake of Brexit

Brexit took effect on 1 January 2021 and significantly impacted the labour market across the European Union. In response, the Belgian lawmaker adopted the Act of 6 March 2020 safeguarding employment after the UK's withdrawal from the European Union (the Act of 6 March 2020).

The Act of 6 March 2020 provides for different support measures intended to prevent job losses in the wake of Brexit. These measures are available to companies formally recognized as companies facing “economic difficulties as a result of Brexit”. Hence, a preliminary recognition must be obtained from the Ministry of Employment in order to benefit from these measures.

The entry into force of the support measures foreseen by the Act of 6 March 2020 had yet to be determined by royal decree before the measures could be relied on. Such royal decree was adopted earlier this year and since 22 March 2021, companies facing economic difficulties as a result of Brexit can rely on three measures to reduce wage costs without cutting headcount:

  • specific unemployment scheme due to economic reasons linked to Brexit (Brexit unemployment scheme)
  • temporary individual working time reduction (Brexit time-credit)
  • temporary collective working time reduction

1. Brexit unemployment scheme

Companies in difficulties can rely on a specific temporary unemployment scheme due to economic reasons linked to Brexit. Under this unemployment scheme, employment contracts can be fully or partially suspended.

The main feature of the Brexit unemployment scheme is that the maximum periods of unemployment allowed per calendar year are extended, for both blue-collar and white-collar employees.

In addition, a mandatory supplement must be paid by the employer on top of the unemployment benefits. The amount of this supplement is set at EUR5.63 per day minimum.

2. Brexit time-credit

The Act of 6 March 2020 also introduced the “Brexit time-credit”. According to this scheme, an employer and an employee can agree to temporarily reduce the employee’s working time by half or by a fifth and cannot be applied for a period of less than a month or for longer than six months.

In case of individual working time reduction, the employee will receive an allowance paid by the National Employment Office (ONEM/ RVA). The allowance amount is determined in accordance with the rules applicable in case of “regular” time-credit, considering that an employee’s income cannot, as a result of this measure, be higher than his/her regular gross salary.

3. Temporary collective working time reduction

Since 22 March 2021, employers can also reduce working hours by one fourth or one fifth for all staff members or for an objectively defined staff category.

The collective working time reduction must be provided for in a collective bargaining agreement negotiated within the company.

While this measure offers the possibility to reduce business activity, it also allows employers to temporarily reduce their social security contributions. Employers resorting to temporary collective working time reduction benefit from a partial exemption of social security contributions in the form of a target group reduction per quarter. The amount of this reduction will depend on the working time reduction that is implemented within the company.

These measures are effective from 22 March 2021 until 21 March 2022.