THE ROLE OF TELEWORKING IN LUXEMBOURG
Teleworking is a work organisation method which allows the employee to carry out their work in a more flexible way while guaranteeing the employer the proper performance of the employment contract.
Telework is more precisely characterised by the performance of work :
- Using computer facilities (computer, internet);
- At the employee's home or in a workspace different from the employer's (e.g. coworking space);
- in a regular manner.
The objectives of this working method is among other things to lighten traffic for cross-border workers travelling to and from Luxembourg and to reduce the stress of transport and traffic jams. This would make the employee more efficient and available.
The legal framework
Telework is governed by the provisions of the Labour Code.
Whether it is stated in the initial employment contract or in an amendment, the employee and the employer decide together on the conditions of the telework by mutual agreement.
As this is a special system of working, various information must appear in the employment contract in addition to the usual data:
- The place where the employee performs the telework;
- An exhaustive description of the employee's functions and tasks as well as the various objectives they are expected to achieve;
- The classification of the teleworker under the collective agreement, if one exists;
- The hours or days of the week dedicated to teleworking;
- The work tool made available to the employee, which is installed and maintained by the employer;
- Information concerning the insurance policies taken out by the employer in the event of disappearance or damage to equipment due to water damage, fire or theft.
The employee is not obliged to accept an offer of telework, and refusal does not imply dismissal.
The employee and the employer have the obligation to comply with an adaptation period (between 3 and 12 months)1. During this period, each party is entitled to a return to the traditional working formula.
If the teleworker wants to switch to a traditional working formula, the agreement of both parties to the contract is needed and an amendment to the contract is required in order to set out the new terms (place of work, working hours, working conditions).
The teleworker is subject to the same obligations and enjoys the same rights as if they worked on the company's premises.
Alongside the traditional rights, the teleworker must:
- Manage the organisation of their work;
- Maintain contact with their colleagues;
- Respect the company's rules regarding data protection;
- Comply with health and safety measures;
- Notify the employer if the provided equipment malfunctions;
- Remain informed of the various news which affects the company (everyday life, employer's situation).
Just like the employee, the employer must respect certain rules, namely:
- Provide proper equipment necessary for teleworking and cover the cost of repairs;
- Finance telework-related expenses (e.g. personal telephone);
- Respect the employee's privacy;
- Inform the employee of the various restrictions in terms of the use of computer equipment (internet, email, downloads);
- Provide compensation to the employee in the event of loss of benefits (meal vouchers, etc.).
The tax framework
Bilateral tax treaties between Luxembourg and various third countries aim to eliminate double taxation. According to international conventions against double taxation, employees are in principle taxed in the state in which the profession is exercised.
Article 14 of the double taxation treaties sets the quota of days during which employees may work outside Luxembourg territory while being subject to Luxembourg taxation at 183 days in normal cases. However, some amendments have been signed between Luxembourg and Belgium2 and between Luxembourg and Germany3, bringing the threshold down to 24 and 19 days respectively.
If the threshold is exceeded for these countries, the days worked outside Luxembourg are taxable in the country of residence.
Example: a Belgian cross-border worker who works for a Luxembourg company and who occasionally works outside Luxembourg territory remains taxed in Luxembourg if the activity carried out outside the Grand Duchy does not exceed 24 days.
The social security system
The teleworker employee is entitled to the same social protection as the company's employees with a regular employment contract, including accident insurance. Persons residing outside the Grand Duchy of Luxembourg remain affiliated to the Luxembourg social security scheme provided they do not work more than 25% in their country of residence (approximately 1.5 days per week, calculated over 12 months).
Example: Marie resides in France and is an employee of a Luxembourg company. She works 80% of her working time in France and 20% in Luxembourg. Her social security contributions will be calculated entirely in France (at the French rate) and paid to French organisations.
However, this working system may have some limitations:
- Risk of severance of social ties;
- Insecurity with regard to computer data leaving the company's premises;
- Taxation issues;
- Difficulty in trusting the employee;
- Legal and tax constraints for cross-border commuters who may encounter difficulties in demonstrating that they have remained below the social and fiscal thresholds mentioned in the previous paragraphs.
Luxembourg and teleworking
According to STATEC, in Luxembourg, the number of resident teleworkers doubled from 3 to 6.1%.
Furthermore, according to Eurofound it is more qualified employees and managers who make use of teleworking, and the areas most concerned are education and services.
More and more residents are working from home. Teleworking remains difficult to implement for cross-border workers, especially in large groups.
1 Article 5 of the Grand-Ducal Regulation of 1 March 2012
2 Bilateral amicable agreement of 16 March 2015 between Luxembourg and Belgium
3 Agreement of 26 May 2011 between Luxembourg and Germany