Remote work compliance covers the range of legal and regulatory obligations that arise when employees perform their duties from a location other than the employer's designated workplace. Key compliance areas include determining which country's employment law governs the contract, identifying where payroll taxes and social contributions must be paid, assessing whether a permanent establishment is triggered for corporate tax purposes, and ensuring that health and safety obligations are met for the home working environment.
Cross-border remote work adds significant complexity. An employee working remotely from a country different from their employer's registered location may inadvertently create a taxable presence for the employer, become subject to a different social security system under bilateral agreements, or generate mandatory employment law obligations in the host country. Employers must conduct jurisdiction-by-jurisdiction risk assessments and, where necessary, amend employment contracts or implement shadow payroll arrangements.
In the Netherlands, the Wet werken waar je wilt -- which sought to give employees a statutory right to request approval for working from any location -- was rejected by the Dutch Senate. However, the EU Framework Agreement on Cross-Border Telework, which the Netherlands signed in 2023, provides that employees who work up to 49.9 per cent of their time remotely from their country of residence remain covered by the social security system of the employer's country. HR teams managing cross-border remote workers should monitor individual thresholds carefully to avoid unintended social security reclassification.