"Workation"

Term

The term "workation" is made up of the words "work" and "holiday" and refers to the fusion of work and holidays. The idea is that employees travel to a holiday destination and combine work with holidays. This artificial figure is actually a contradiction in terms. In principle, holidays are there to relax and not to work. Nevertheless, this trend seems to be spreading. at first glance, "workation" sounds very exciting and motivating. From a legal perspective, however, there are a few points to bear in mind, which are briefly outlined below.

Holiday reference

First of all, the question arises as to whether or not holidays are taken during "workation" and to what extent. It is therefore recommended that the parties draw up a supplementary agreement to the employment contract and clearly regulate the extent to which holidays are taken.

Working abroad

In contrast to remote work in Switzerland, working abroad raises various other legal issues. If not everything is clarified, "workation" can lead to risks, which are listed below without claiming to be exhaustive.

Immigration law

If employees go abroad to go on holiday but also work there, this could have consequences under criminal law, especially if this has not been declared on an entry form. Many countries require a work and residence permit or a visa to work abroad, especially for stays of more than three months. As in Switzerland, work permits abroad may be subject to conditions. Depending on the destination, other legal bases must be checked, which is why these clarifications should be made once it has been determined in which country "workation" is to take place. Employers are advised to carry out these clarifications seriously and before the start of "workation" so as not to run the risk of disregarding applicable foreign national regulations.

Labour law

It is also necessary to check whether certain labour law regulations apply abroad, similar to those in Switzerland, which must be complied with (e.g. regulations on working hours and rest periods, Sunday work, ban on night work, breaks, holidays and public holidays, etc.). Swiss labour law is only applicable in Switzerland, which is why Swiss law cannot simply be applied to employees from Switzerland abroad. In principle, you are subject to the law of the country in which you work. Labour law provisions - usually relating to working hours and health regulations, which also exist abroad - must therefore be observed. Compliance with minimum wages abroad must also be observed, even if it can be assumed that the wage level in Switzerland is higher than in many foreign countries and this point is unlikely to be significant. The violation of labour law regulations can lead to serious sanctions and must therefore be clarified in advance.

Social security

If someone is working abroad, it must be clarified whether and which social security agreements exist and which regulations they provide for. In particular, it is important to check whether "workation" leads to social security subordination abroad. To find out whether such agreements exist, the list "Swiss intergovernmental agreements on social security" can be consulted at the Federal Social Insurance Office. Depending on whether an agreement exists or not, the consequences are regulated differently, which is why it is advisable to clarify this before agreeing to "workation".

Working abroad for a maximum of 20% of an annual workload, approx. 10 weeks per year (guideline value), is considered unproblematic from a social security point of view. As soon as this increases, the associated obligations/risks must be examined.

Insurance cover

Insurance cover for statutory health insurance and compulsory accident insurance is limited abroad. Here, too, it should be clarified in advance what risks employers could face if employees fall ill abroad and the services are not provided by the Insurances. In particular, access to healthcare for foreign employees should be examined if there is no emergency and how the costs are covered. It may be possible to solve these risks with supplementary insurance. This would have to be clarified with each individual Insurances, which is why no standardised answer can be presented in this article.

Tax law

The issue of the "permanent establishment" is at the forefront here. Remote work from abroad can lead to the establishment of a foreign permanent establishment of the employer(s). This in turn leads to corporate tax liability abroad. This question must therefore be clarified very carefully with tax experts in the relevant foreign country and any double taxation agreements (DTAs) must be taken into account. The 183-day rule should also be noted. If you spend more than 183 days abroad, you may be liable to pay income tax under an applicable DTA.

Data protection and security

It goes without saying that it must be ensured that only authorised persons have access to business data. It must also be ensured that the data is protected against manipulation and technical defects. Risks are posed, for example, by unsecured WLAN in hotels and holiday resorts. The use of unknown end devices (e.g. hotel computers) can also lead to problems.

Conclusion

If employers want to allow "workation", it is highly recommended that they only authorise work abroad after clarifying various legal points in advance. It must also be ensured that employees do not relocate remote working abroad without prior notification. Working abroad for individual days should not be a problem. As soon as this becomes routine and employers are unaware of it, there are risks that need to be avoided.

It is possible to make clarifications in advance and restrict "workation" to certain countries and, in particular, limit the duration per year. This would probably avoid most/many risks. Then nothing stands in the way of "workation".