Working remotely and home office: Implementation of a company policy

• Employment Law
• SME

Since the coronavirus pandemic, employers in Switzerland have been confronted with a wide range of questions and requests from employees regarding working from home or any other remote location. During the pandemic, certain supposedly “entitlements” have been established in the minds of employees, which need to be re-assessed more closely in retrospect and, if necessary, narrowed down. This is even more important in case employers employ cross-border commuters and therefore have to comply with certain cross-border regulations. The following article shows what you as an employer should consider from a legal perspective and provides you with recommendations for action.

In principle, employees are not entitled to work from home or from a holiday apartment. Normally, the place of work is defined in the employment contract and employers provide a so-called mobility clause for greater flexibility, which allows them to redefine the place of work from time to time within a limited framework. However, working from home or from any location other than the usual place of work requires the employer’s consent and therefore constitutes a concession on the part of the employer. Exceptions apply due to official orders of state authorities or if employers deliberately send their employees to the home office.

When considering whether and to which extent employers should allow their employees to work remotely (home office, working abroad away from home, working on the train, etc.), various interests and risks must be weighed up. On the one hand, employees need to be given precise instructions with regard to confidentiality and data protection regulations. Further, in case of cross-border commuters, applicable regulations relating to social security and tax and the corresponding consequences must be observed. For example, some activities may not be carried out from the home office abroad for tax reasons (in order to avoid the undesirable setting up of a permanent establishment). In addition, practical issues may arise in ensuring the correct recording of working hours and ensuring health protection, the handling of different time zones, communication within the team and maintaining the team spirit, etc. On the other hand, by enabling mobile working, employers create a positive culture of trust, more flexibility and attractiveness for employees and the society (e.g. better compatibility of job and family, less commuting time and commuting expenses, or less commuter traffic, etc.).

How can you create clear conditions and minimize legal and financial risks?

1. Rules and regulations

Create an internal policy of the company with rules and guidance with the following aspects:

a) General: 

• Define remote work.
• Specify the framework for the effective working time outside the workplace within and outside Switzerland (how often, for how long, from where, which employee groups). “Non-legal” aspects should also be taken into account.
• Define which working activities may be conducted from abroad and which not, in order to avoid the risk of setting up of a permanent establishment which entails undesirable tax consequences.
• Establish rules of conduct regarding confidentiality, data protection, permitted activities, requirements with respect to the office environment, including aspects regarding occupational safety and health, internet access, etc. 
• Set out what happens in the event of a breach of these rules or loss of trust, poor performance, etc.
• Make it clear that working remotely is a courtesy on the part of the employer and does not trigger any obligation to compensate the employee for home office equipment, use of private premises, etc. (unless you as the employer do not provide a suitable workplace in the company).

b) For employees who live abroad or have the status of cross-border commuters:

In addition to the above-mentioned internal policy of the company, as an employer, if you employ staff who live abroad, you should also comply with the international regulations on social security subordination, in particular Regulations (EC) No. 883/2004 and No. 987/2009 as well as the regulations of the multilateral agreement on social security subordination, which Switzerland and certain EU and EFTA states have defined in the interests of employees and their employers regarding telework and which has been in force since July 1, 2023. Further complexity is added by the numerous different requirements of applicable tax regulations, in particular double taxation agreements, which in practice could lead to undesirable legal and financial consequences for you as an employer as well as for the employees concerned. 

• Within the framework of these applicable rules and regulations, determine the maximum amount of effective working hours that may be performed from abroad and from the country of residence. 
• Determine the rules that apply to employees who are resident in a country with which Switzerland has not concluded a simplified agreement regarding teleworking.
• As an employer, you should also define which restrictions apply to telework due to tax regulations and double taxation agreements and inform employees about the tax consequences of non-compliance with these restrictions. 
• Define which activities may and may not be carried out from the home office abroad (in order to avoid the risk of setting up of a permanent establishment which entails undesirable tax consequences) and make sure that your employees confirm in writing that they are complying with the internal policy of your company.
• Add these specific rules to the above-mentioned internal policy of the company.

c) For employees who wish to take up a secondary employment abroad:

• Define in the internal policy of your company what you understand by secondary employment.
• Determine to which extent a secondary employment (up to what workload) may take place outside Switzerland.  
• Observe the above-mentioned regulations regarding the correct social security status.

2. Communication

Clearly communicate your expectations as an employer regarding compliance with your “rules for working remotely” and train your employees and managers, accordingly.

3. Time recording

When recording your employees’ working hours, make sure that you can always track whether your employees have worked from their usual workplace in the company or from home or another location. Under certain circumstances, you as an employer may be required to provide evidence of the actual working hours spent outside Switzerland or business trips abroad.