Home office from abroad – What you need to know from a legal perspective

As firms around the world have hurriedly transitioned this past year to telecommuting, or as lovingly called “home office” in Germany, companies have come to grapple with even the idea of working in an office and its effectiveness towards productivity. For some employees, it has been proven that going to the office is not a necessity and that their work can happen from virtually anywhere with an internet connection.

This leads to dreams of not just working from home permanently, but even working from remote lands, sandy beaches, where only a stable Wi-Fi connection is required to operate. For some expats who are employed in Germany but have been able to endure lockdown back in the comforts of their home country overseas, the availability of home office has allowed them to continue to work for their German company while being with their family or tending to loved ones. However, the ability to work remotely, from abroad or otherwise, may be closing to an end as the economy begins to reopen and vaccination efforts continue to roll out.

Here is what you should know about the future of home office.

Are employees entitled to home office?

As a general rule, there is no legal obligation for employers to offer home office.

The only change to this rule was a temporary regulation issued by the Federal Ministry of Labor and Social Affairs (Bundesministerium für Arbeit und Soziales, BMAS). For a limited period (January 27th, 2021 to March 15th, 2021), the Corona Occupational Safety and Health Ordinance (Corona-Arbeitsschutzverordnung) stipulated an obligation to offer home office for the first time. Effectively, this means that employers can no longer avoid offering employees home office, or employees’ request to have home office cannot be denied during this period. This comes with the exception that employers can reject an employee’s home office request if there are “compelling operational reasons” (in German originally written as zwingende betriebsbedingte Gründe). Such reasons are not explicitly noted on the BMAS website, rather they have only stated that employers are obliged to offer home office “in the case of office work or comparable activities that are suitable for doing in their home (home office)”. This is subject to interpretation and/or legal assessment. Therefore, the easiest way an employee could take regarding the home office issue is to discuss the problem with the employer, contact the works council (Betriebsrat) or contact the appropriate occupational health and safety authority. The latter would require the employer to explain the reason why the home office cannot be done.

Since the initial drafting of this article, the Federal regulation has extended the ordinance to April 30, 2021. Additionally, each German state may make its own changes. For example, the Berlin Senate, then it will revert to the previous status, where the legal obligation for employers to offer home office no longer exists. The availability of home office will continue to be dependent on the employer.

Can I telecommute from my home country?

Before answering this question, an employee should first clarify and come to an agreement with their employer on the specific terms, such as the location(s) of work, starting from when, and how long the arrangement will be. These specifics are usually clarified in a standard employment contract, even before considering telework. As such, your employer holds the right to limit the location of your work, (from home in Germany, home in your home country, or otherwise).

Another primary issue the employer may be concerned about involves taxation rules. Working from a foreign country where your employing company has no legal entity could lead to the fiction of a permanent establishment from a tax perspective, in particular if the employee is directly generating income. This would lead to the employer’s obligation to tax their turnover (partly) in this foreign country. Further, if the employee is staying in his/her home country that is within the EU and the duration exceeds 183 days, the employee should be aware of the specifics of the double taxation agreement as “cross-border commuter” with regards to income taxation. The same issue arises when staying outside the EU, depending on if there is a double taxation agreement between Germany and this country at all.

Another issue to consider is social security contributions that may have to be made in the foreign country solely based on the factual place of work that has been transferred to this country.

In other words: Before enjoying your home office from abroad, you should definitely discuss all potential employment law, social security law, and tax law implications with your employer and/or a qualified attorney at law.

Risks to consider

If there has been anything we have learned in the past year, it is that traveling during a pandemic offers risks. When throwing your employment into the mix, the opportunity for something to go wrong greatly increases. Here are some additional points to consider:

What happens if I cannot return to Germany?

Before embarking on a trip, it is essential to assess the situation and consider travel risks.

Under German lawemployees bear the risk associated with their ability to get to work. If you as an employee cannot get to their place of work, then you are unable to perform their work and therefore do not receive any pay, unless otherwise agreed.

Furthermore, if you already hold a residence permit in Germany (for work or otherwise) or are a German citizen, you may be considered an exception to any travel ban currently instated on risk areas.

What if I fall ill/get injured while working from abroad?

This is a considerable point to think about, especially while the pandemic is still alive and strains continue to mutate. If you are working from another EU state, then you may or may not be covered by German health insurance. For example, the German public health insurance system provides limited medical and dental coverage for travel within the European Union. If you plan on staying in a third non-EU country, however, this complicates things further and additional travel insurance may need to be purchased.

If you are injured while working from home, workers’ compensation may cover you if a telecommute policy is stipulated, but this must be confirmed with your employer’s policy beforehand. Furthermore, this coverage may not apply if home office is performed abroad.

Can I lose my job for refusing to work in Germany/in the office?

It is not unheard of to lose a job due to not showing up for work. Even worse, if your company sees that it is possible for your position to be performed remotely, it is within the realm of possibility that they may decide to offshore the job at a lower salary in order to save money.

If an employer decides that the employee must return to Germany/to the office, it is the employee’s responsibility to follow the directive or face possible termination. While the stipulations of the Employee Protection Act are intended to protect workers against unfair dismissal in Germany, there are still legitimate reasons for termination. Failure to return to work can be considered a conduct-related reason.

Article last updated on March 31, 2021.