Cross-Border Remote Work for Austrian Companies Can Cause Problems
Working remotely for an Austrian company while living in another country may seem straightforward, but it can create difficult social insurance, tax and employment-law questions. The rules are not yet fully adapted to modern cross-border remote work.
EU rules have not kept pace with remote work
More than 120,000 people work in Austria, and many live in another country while commuting to their jobs. However, employment-law conditions changed on July 1, 2022. The temporary rules applied during COVID, which allowed unlimited remote work, ended. Under the current arrangement, only one day of working from home per week is permitted.
One of the difficulties in European employment law is how to handle remote work. Social insurance rules are complicated and are mainly designed for traditional forms of employment, such as office or factory work.
Taxation and insurance for cross-border commuters can also raise complex questions. Different countries apply different rules, making administration and the legal position more difficult to manage.
Where should a remote worker be insured?
Under an EU regulation, if someone works from home several times a week, they must generally be insured in the country where they live. This means that a person living outside Austria and working remotely for an Austrian company more than one day per week may need to be insured in their country of residence.
For the Austrian company, this could mean employing the person through a local subsidiary or establishing a branch in the employee's country of residence. Understandably, relatively few companies are willing to take on this administrative burden.
A legal grey area
Authorities have so far often overlooked arrangements in which employees work remotely from another country for more than one day per week. However, this grey area can cause problems in disputed cases, when calculating a pension or in other situations. For this reason, the legal position needs to be clarified.
A framework for up to half the working time remotely
A new EU framework agreement could bring legislation closer to current working conditions. It would allow cross-border commuters to spend up to half of their working time working remotely.
However, the framework agreement has not been signed by every relevant country. This creates further uncertainty for people who work across borders, even where the employee and employer would prefer a flexible remote-work arrangement.
Practical steps before working remotely across a border
- Check the permitted number of remote-work days: Confirm whether your arrangement stays within the limit of one day per week.
- Ask where you will be insured: Your employer should clarify which country's social insurance system applies.
- Review the employer's obligations: Find out whether a local subsidiary, branch or other registration would be required.
- Keep records: Document the days worked in Austria and remotely from your country of residence.
- Seek professional advice: Before regularly working remotely across a border, obtain advice on employment law, social insurance, tax and pension consequences.