Term

The term “workation” is a portmanteau word, a combination of “work” and “vacation”, which describes this kind of working arrangement. The idea is that employees travel to a holiday destination and whilst there, they combine work with their holidays. In fact, this arrangement is a contradiction because fundamentally holidays exist for recuperation and not for work. Nevertheless, this trend seems to be spreading. At first “workation” sounds very exciting and motivating. But from a legal point of view, on the other hand, there are some points you should bear in mind that are described briefly below.

Holiday entitlement

First of all, the question arises of whether or not holidays are taken during “workation” and, if so, to what extent. It is, therefore, recommended that the parties conclude an additional agreement to the employment contract which clearly regulates the extent to which holiday are taken.

Working abroad

Compared with remote work in Switzerland, there are several other legal issues which arise when working abroad. If not everything has been clarified, “workation” can lead to risks which are highlighted, non-exhaustively, below.

Foreigner’s law

When employees travel abroad on a holiday, but also work there, this may have criminal law consequences, especially if the circumstances are not declared on an immigration form. Many countries require a work and residence permit for working abroad, or a visa, especially for stays of more than three months. The work permit abroad may - as in Switzerland - be subject to conditions. Depending on the destination, there are different legal bases that have to be examined. Therefore, once it is decided in which country “workation” is to take place, the applicable legal regulation should be verified. Employers are advised to take these clarifications seriously and to undertake them before “workation” starts, in order to avoid the risk of a breach of applicable foreign laws and regulations.

Employment law

It should also be verified of whether or not specific mandatory employment law provisions apply, such as those in Switzerland (e.g. regulations on working and rest times, Sunday work, prohibition of night work, breaks, holidays and public holidays, etc.). Swiss employment law only applies to Swiss territory, why it cannot simply be referred to for Swiss employees working abroad. Essentially, you are subject to the law of the state in which you are working. It is, therefore, necessary to observe employment law provisions - this mostly concerns working time and health regulations -, which also exist abroad.. Minimum wages abroad should also be complied with, even if it is to be assumed that the level of salaries in Switzerland is higher than in many foreign countries and this point should probably not carry any weight. A breach of employment law provisions could lead to serious sanctions and should, therefore, be carefully clarified in advance.

Social insurance schemes

If someone works abroad, it should be clarified whether and which social insurance exists, and which regulations they provide for. In particular, it should be verified whether “workation” is subject to social insurance abroad. In order to find out whether there is an agreement, it is possible to consult the list of “Inter-state agreements by Switzerland on social security” at the Federal Social Insurance Office (document available in German, French and Italian). The consequences are regulated differently depending on whether or not there is an accord with a foreign country, why it is recommended that this point be clarified before agreeing to “workation”.

From a social security point of view , working abroad for a maximum of 20% of an annual workload, approximately 10 weeks per year (guideline), is not regarded as a problem. As soon as this increases, the associated obligations/risks should be examined.

Insurance coverage

Insurance coverage for statutory health insurance and compulsory accident insurance is limited abroad. In this case too, it should be certified in advance what risks the employer could face if employees become ill abroad and the insurance does not cover the services. In particular, the nature of access to healthcare for foreign employees if there is no emergency should be checked, and how costs are covered. Depending on the circumstances, these risks can be solved with additional insurance policies. This would have to be discussed with each individual insurance company, why no uniform answer can be presented within the framework of this article.

Tax law

The emphasis here is on the problem of the “business premises”. Remote work from abroad can lead to establishment of foreign business premises for the employer. This in turn leads to corporation tax abroad. Therefore, this issue must be clarified in great detail with tax experts in the country in question, or any double taxation agreement (DTA) taken into consideration. Reference should then be made to the 183-day rule. If a stay abroad exceeds 183 days, an income tax liability abroad may arise according to an applicable DTA.

Data protection and security

Naturally, it must be ensured that it is only possible for authorised persons to access business data. It should also be ensured that the data is protected against tampering and technical defects. Risks arise (e.g. unsecured Wi-Fi networks in hotels and holiday complexes). Use of unknown devices (e.g. hotel computers) can cause problems.

Summary

If employers want to allow “workation”, it is imperative that work abroad is only approved after clarifying a variety of legal issues. It must also be ensured that employees do not move abroad without giving notification that they will be working remotely abroad. Working abroad for single days should not present a problem. When this becomes routine and employers are unaware of it, there are risks that should be avoided.

It is possible to clarify the situation in advance and to limit “workation” to specific countries, and, in particular, restrict the duration of remote work abroad per year. This should avoid the majority of/many risks. Then, nothing else stands in the way of workation.