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The world of work has changed and work no longer has to be carried out in the office. This opens up new opportunities for employees and companies to attract talent and retain experienced employees. The legal conditions and challenges of new work models and workplaces are equally varied.
This article gives you an insight into the requirements for working abroad and explains what challenges employees and companies face. We also show you options for organizing occupational benefits insurance for your employees to ensure compliance with legal provisions and internal guidelines for your company and your employees.
The answer to this question depends on many factors, such as the country in which the employed person will work, their nationality , the country in which the employer’s head office is based or which data is processed and how long working abroad will last.
Depending on the arrangement, this has consequences for tax and social insurance. To avoid nasty surprises for employers and employees, it’s a good idea to clarify a few questions first.
The following should be considered: the employed person’s work permit , the legal basis of the employment contract and the employer’s head office.
The most common scenario is a company in Switzerland employing a Swiss national or a person with a C residence permit with a Swiss employment contract. The second most common involves foreign nationals who have a Swiss work permit and are resident in Switzerland, and the third involves cross-border workers.
Another possibility involves people who are sent to work abroad by a Swiss company, referred to as expats. The foreign assignment can either be at a company’s foreign branch or at a customer’s premises.
When it comes to cross-border workers, a distinction must be made between people with an EU/EFTA nationality and those with a third-country nationality.
Cross-border workers from EU/EFTA countries can be granted a cross-border worker permit if they meet the following criteria:
If a cross-border worker is a national from a third country, a cross-border worker permit may be granted if the following criteria are met:
If a cross-border worker from a third country wishes to become self-employed or start a new job, they must always have a labor market-related preliminary decision from the Cantonal Office for Economy.
A foreign assignment counts as a business trip if employees have a Swiss employment contract and work for a maximum of three months abroad per calendar year and business trip, without taking vacation to do so or having their employment contract amended. This may be visits to foreign production facilities, customer meetings or vocational/language courses.
Employees continue to be insured as if they were working in Switzerland. In other words, accident and social security contributions continue to be managed via the employer, but health insurance is a private matter. For business trips lasting several weeks, employees should always check whether their health insurer would cover any health costs abroad. Employees on business trips should also have an A1/Certificate of Coverage (CoC) (in German) with them, as this form confirms that they have social security insurance.
Caution should also be exercised when traveling to disaster and crisis areas as well as temporarily unsafe areas, as insurance benefits are limited or even non-existent in such instances. The EDA’s travel advice (in German) offers a good overview in this regard and should always be read before any trip.
When it comes to remote working, a distinction must be made between working from home and working remotely abroad.
The place of work for employees resident in Switzerland must be Switzerland, regardless of whether this is the employer’s office, a nearby café or the Swiss mountains. The only applicable terms and conditions here are those of the employer.
Switzerland has an agreement with the neighboring countries of France, Germany, Italy and Liechtenstein. Under this agreement, cross-border workers may spend up to 49.9 percent of their working hours working from home. The only exception applies to the self-employed and employees who make regular customer visits in their country of residence or work in another EU/EFTA country.
For short-term assignments, companies have a great deal of flexibility when it comes to formulating their regulations. This is important so that the same conditions are created for all employees. It’s always best to check each case individually, as the devil often lies in the detail.
These checks take a great deal of time and need a few weeks of lead time. Comprehensive expert knowledge is required for in-depth checks and this constantly changes in troubled political times.
Regardless of whether you want to draw up regulations for your company or prepare for a discussion with a specialist agent, it’s worth having the following points on the radar:
Specifically, individual checks must always be carried out for those without a Swiss passport who have a Swiss employment contract. Depending on the residence permit, working abroad may affect residence status.
What if an employee wants to stay on for an extra week in their holiday destination and work listening to the sound of the sea and looking out onto the beach, or if an employee wants to go through emails while traveling on a train outside of Switzerland? Such flexibility - often called workations - is possible and particularly an important factor in the battle for the best talent. Here too employers have many options to increase their appeal, and much to bear in mind.
Unlike remote working, workations do not last very long. The offer of workation can help employers when it comes to retaining employees. For example, you help support employees with a family abroad or those who would like to structure their vacation more flexibly.
Those regularly employing expats must also consider the impact on the employees in question as well as the legal provisions. There are massive differences between the respective countries in which employees work as expats, such as social insurance.
In this instance, it is advisable to formulate an assignment policy. Before employing someone as an expat, you should clarify the following questions:
If foreign employers commission people to work in Switzerland on a temporary basis, they are referred to as inpats. Thanks to the agreement on freedom of movement between Switzerland and the EU and EFTA, this is not a problem for EU/EFTA citizens. They are treated on equal terms to local workers on the labor market. Employers are required to register a work assignment that lasts up to three months within a calendar year. A permit is required if a job lasts for more than three months within a calendar year.
The regulations for persons from third countries depend on the respective bilateral agreements, involving, for instance, quotas for employees from third countries. The overall economic interest must also be considered. Seco (in German) and the SEM offer a good overview of the requirements and provide additional information.
Before answering this question, the term “freelancer” must first be explained. In this article, we describe freelancers as those who charge a Swiss company for their work and do not have an employment contract with that Swiss company, with an employee-of-record provider or with a temporary staff recruitment business. In this context, freelancers may be a capital company (SA, AG, GmbH etc.), general partnership or sole proprietorship.
If you employ freelancers abroad, you should always clarify the international accounting aspect, particularly with regard to VAT. You must also ensure that your data is also protected in the freelancer’s work. Equally, you must check who owns proprietary rights for intellectual property.
If a freelancer works as a general partnership or sole proprietorship, the question of liability should also be clarified. It is equally worth checking whether the freelancer has any knowledge of administrative and regulatory matters , for example, which working hours must be complied with or which provisions in your sector apply to cross-border collaborations.
For sole proprietorships, the risk of false self-employment should also be checked. This may already be the case if the person works exclusively for your company and also has to comply with your rules on working hours.
Employers of record are providers that seek out international talent on behalf of a company and deal with legal collaborations. Depending on the company’s requirements, the hired talent remains in the respective country or comes to Switzerland with a local employment contract.
The employer of record offer covers various HR services from payroll, temporary staff recruitment, offshoring and much more. The advantage compared to a Swiss temporary staff recruiter is that they have branches in many countries and can therefore support the international development of companies.
For you, this means that you can hire staff abroad with employer of record agencies without having to deal with the usually expensive checks or have a branch abroad. This enables you to optimize your operational risk with an expat. However, there is the risk of a pension gap for your employees. Here you can support your employees with an international insurance solution for death, disability and pensions.
The following points must be borne in mind when collaborating with an employer of record service:
It’s also good to know that staff costs can be treated as operational expenses for a collaboration with an employer of record service.
Specify in your staff regulations the extent to which working abroad is possible and which labor law would apply. This is also recommended by the State Secretariat for Economic Affairs (SECO). We also advise you to check individual cases and gather the necessary information in advance.
In addition to all the requirements and conditions set out in this article, you should also train and raise awareness among your employees. Explain the risks of working abroad to them. For instance, business risk such as when using a work laptop or VPN connections. There are also other issues such as accident and health protection. Additionally, salary levels abroad are often lower than in Switzerland and the pension systems are usually not wholly compatible. This can result in pension gaps for employees, such as when returning to Switzerland after a long foreign assignment or because, while abroad, contributions have to be made into the pension system for a specific amount of time before benefits are payable. Pass on important information through a summary sheet, staff training or an interdepartmental information event; make sure that agreements are recorded in writing.
Other helpful contact points include the relevant compensation funds, the Federal Social Insurance Office (SIO) and your insurance partner. We’ll be happy to advise you.
Simona Audia is a Content Manager at AXA and researches interesting content for you on the subjects of insurance and pensions.
