Since the Covid-19 pandemic, remote work or telework has become a widespread method of providing services, especially within the EU. It is increasingly common for companies to allow their employees to work remotely, even from abroad.
But what happens when someone works from Spain for a company based in another country? What legislation applies to their employment contract and Social Security contributions?
Applicable Legislation for International Telework
In Spain, Law 10/2021 of 9 July on remote work regulates telework for companies operating within the national territory. However, this law does not contain specific provisions for international telework.
EU Law as a Reference Framework
At the European level, various legal instruments—though not directly regulating international telework—help determine the applicable legislation, both from an employment and Social Security perspective.
Applicable Labour Law: Rome I Regulation
To determine the applicable labour law, we must refer to the Guidance Note on Telework, CA 125/22REV3, issued by the Administrative Commission for the Coordination of Social Security Systems on 21 June 2023, which refers directly to the provisions of Regulation (EC) No. 593/2008 (Rome I Regulation) of the European Parliament and of the Council of 17 June 2008 on the law applicable to contractual obligations.
This Regulation establishes the mechanisms to determine the applicable law in contractual matters involving two or more EU Member States.
Although specific subject matters are regulated separately, Article 3 of the Regulation allows the parties to choose the applicable law, which must be clearly expressed in the contract.
In addition, Article 8 sets out the rules applicable to individual employment contracts, which prevail over the parties’ choice in certain situations:
- The law of the country in which the employee usually carries out their work.
- The law of the country where the company that hired the employee is located.
- The law of the country with which the employment relationship is most closely connected.
Therefore, companies and workers can freely agree on the employment law applicable to their international telework arrangement.
Applicable Social Security Law: Regulation 883/2004
For Social Security, the same Guidance Note on Telework, CA 125/22REV3, applies.
Here, the European Commission determines that the applicable law is set out in Regulation (EC) No. 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems.
The main rules are as follows:
- The applicable law is that of the Member State where the employed or self-employed activity is carried out.
- For temporary assignments (under 24 months), the law of the sending country remains applicable.
- If the worker carries out their activity in two or more Member States, the applicable law will be:
- The law of the country of residence if a substantial part of the activity is carried out there, or if the employer is based there.
- Otherwise, the law of the country where the employer is established.
These rules must be interpreted following Annexe IV of Guidance Note CA 125/22REV3.
For permanent relocations or assignments exceeding 24 months, the lex loci laboris principle applies—meaning the law of the Member State where the work is performed.
This principle is confirmed by the Court of Justice of the European Union in its judgment of 27 September 2012 (Case C-137/2011): the country from which telework is performed is considered the place of service provision.
Conclusion
In the absence of specific legislation on international telework, it is essential to assess each case individually in terms of labour law and Social Security regulations. Proper contract drafting, agreement between the parties, and knowledge of the EU legal framework are crucial to avoid legal conflicts or double contributions.
Does your company have employees working remotely from abroad? We help you correctly define their contracts and ensure full compliance with applicable regulations.
Ignacio Secades
