If you want to enjoy the sun and beach in summer, you don’t necessarily have to take time off. At least not if a work assignment has been agreed with the employer. “Workation” – i.e. the fusion of work (“work”) and vacation (“vacation”) has gained in popularity since the increasing emergence of mobile work during Corona times. What may sound tempting to many who do not necessarily have to do their job on site in the company, however, involves a number of legal pitfalls.
These arise, among other things, from the fact that the framework conditions for workation are not clearly defined legally in many respects. The term itself usually refers to the actual combination of a vacation trip and work as an employee – i.e. not a permanent activity abroad or a business trip to a branch of one’s own company beyond the German borders.
Workation and management law: When employees have a claim
The most important rule for working from a (foreign) holiday destination: Employees generally have no legal right to work. Finally, according to Section 106 of the Trade Code, the employer can determine the place of work at its reasonable discretion within the framework of its right of direction, unless otherwise agreed contractually or in a works agreement or collective agreement. Therefore, as a rule, at least an amicable agreement between the employment contract parties is required.
As long as employees work predominantly in Germany and have their usual place of work there, the employment relationship is subject to German law even if they work in another EU country. This is what Article 8 Paragraph 2 of the EU Rome I Regulation says.
Many experts, as well as the consulting firm EY, are therefore of the opinion that “German law should continue to apply” if the work period lasts approximately four weeks without interruption. However, “with regard to minimum occupational safety regulations, there is a favorable comparison, which means that the regulation that is more favorable for the employee applies”. As the CMS law firm points out, this can concern country-specific “work bans, maximum working hours, minimum rest periods” or public holidays.
Co-determination at Workation: What rights the works council has
One aspect that is sometimes overlooked is the co-determination of the works council. According to Section 87 Paragraph 1 No. 14 BetrVG, employee representatives have an important say in the “design of mobile work that is carried out using information and communication technology”. If the parties cannot agree on this, the conciliation board can also be called upon.
Social insurance for workation: A1 certificate for working in other EU countries
According to the General Local Health Insurance Fund (AOK), “at least in other European countries there is the possibility of determining the time of work as a posting” in social insurance. In concrete terms, this means that the employer agrees to a “temporary activity” for the respective employee from a location abroad. If this is a country within the EU, the European Economic Area (EEA), Switzerland or Great Britain, the health insurance company recommends applying for a so-called A1 posting certificate. This ensures that “German social security law continues to apply” during stays.
In order to be on the safe side in the event of possible accidents at work, the Verwaltungsberufsgenossenschaft (VBG) also advises employees to conclude a written agreement “which shows that you are integrated into your employer’s company even while you are working abroad and are subject to its instructions with regard to place, time and type of activity – albeit in a relaxed form”.
Avoiding Hush Trips: Why Working Secretly Abroad Is Risky
The health insurance company TK also emphasizes that this is not bureaucratic bigotry and warns against so-called hush trips: “If a person works secretly from abroad and therefore without an A1 certificate, there is no entitlement to health benefits in the event of illness, for example.” In extreme cases, it could also be the case that “employees without an A1 certificate have to stop working and employers have to immediately pay social security contributions in the country in which they work.” Companies also face fines for violating the reporting requirement. Employees, for their part, also risk disciplinary measures if they work remotely from abroad without coordination (for a longer period of time).
When it comes to accident insurance coverage, a rule of thumb must also be observed, according to which the extent of activity in Germany must be at least 25 percent per year in order to continue to apply. According to the VBG, this means for employees: “With a normal five-day week, they have to work an average of two days in Germany so that German statutory accident insurance protection continues to apply.”
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A whole range of detailed regulations apply to work in non-European countries that concern entry, residence permits, tax aspects and insurance issues. Due to their complexity, these cannot be comprehensively presented here. HR departments that are confronted with inquiries about stays in non-EU countries should therefore definitely seek expertise in order to avoid legal risks for both sides.
Data protection at Workation: VPN requirement and secure document storage
Another aspect concerns the topic of data protection: On the one hand, it is about the technical equipment, but on the other hand it is also about awareness. For example, company systems should only be accessed via a VPN tunnel, i.e. protected connections. And it goes without saying that using an open WiFi in the bungalow complex on the Canary Islands for business purposes is an absolute no-go.
Apart from that, there is also the question of taking physical documents with you. Experts like Conrad S. Conrad from the data protection consultancy DNS strongly advise against taking company internal information or application documents out of the country. Papers with content that affect the processing of special categories of personal data within the meaning of Art. 9 GDPR (such as health data or information on trade union membership) are also sensitive. It also makes a lot of sense to have a lockable room in the holiday home so that company laptops and documents can be kept safe.
Workation and tax: The 183-day rule at a glance
When it comes to taxation, the so-called 183-day rule is the measure of all things. To put it simply, this means that employees who work abroad for more than 183 days a year – i.e. more than 50 percent of their regular working hours – are subject to tax in the workation host country.
The business law firm Görg also points out another aspect that HR should take into account: “Employers who enable their employees to work from abroad may run the risk of establishing a foreign permanent establishment. This would result in the company having to pay tax on its income both in Germany and in the foreign country.” Where the border lies varies depending on the country.
Benefits of Workation: Employee retention and employer branding
From a company perspective, workation can be an instrument to increase employee satisfaction and employee motivation. In addition, some employees find the combination of a ‘change of scenery’ and work to be enriching. Employee retention is also often brought into the field, as employees see the opportunity to combine vacation and job as a sign of trust. The Stepstone Group also sees possible advantages in employer branding: Workation could therefore be “a decisive advantage in the competition for talented employees”.
Disadvantages and risks: Dissolution of boundaries and fairness problems with workation
But not everyone is a fan of workation: Critical voices criticize the concept for two main reasons, namely the danger of a loss of boundaries and a lack of fairness: For example, the AOK points out that with workation there is a risk that “work and leisure time merge too much and there are no clear recovery times”. To avoid this, precise “agreements and working time regulations” are helpful.
A marketing employee at the cosmetics manufacturer Beierdorf in Hamburg, Jana Assenmacher, agrees on the Linkedin platform and writes (translated): “I tried to combine work and vacation in the hope of getting the best of both worlds: work until the early afternoon, finish early and enjoy a foreign country.” However, the reality was different: “I couldn’t really switch off and enjoy my vacation, and I felt uncomfortable ending the day early, even though there was still so much to do. Instead of feeling balanced, I had the feeling that I was only half doing both: not working properly, not taking a proper vacation.”
Although this does not apply to all workationees, HR should take another aspect into account: Many job profiles are not suitable for external work due to on-site attendance requirements, so a certain amount of sensitivity is required when approving in order to avoid jealous debates among the workforce.
A statement that Gernot Brenscheidt, a member of the Federal Association of Human Resources Managers (BPM), made to the television station ZDF can serve as a conclusion: “A workation only works if employees are responsible and the interests of the employer are also protected.”
Frank Strankmann is an editor and writes offline and online. His focus is on the topics of labor law, co-determination and regulation. He is also responsible for other projects for media brands from FAZ Business Media GmbH.
