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Teleworking in Luxembourg - Are you ready for 1 July 2022?

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19 April 2022

As from 1 July 2022, the Luxembourg rules on telework resulting from an agreement of 20 October 2020 between social partners (declared generally applicable by grandducal regulation of 22 January 2021) will become unavoidable in practice.

In parallel, for companies of the Luxembourg financial sector, the “CSSF Circular 21/769 (as amended by CSSF Circular 22/804) on governance and security requirements in relation to tasks or activities carried out through telework” will need to be complied with. Finally, the specific Covid-19 arrangements on tax and social security for cross-border commuters will come to an end.

In practice, this will mean that companies will enter into their “post-pandemic” operational mode, with on the one hand, employees coming back to the office and, on the other hand, employees being officially allowed to work remotely according to the procedures set in place permanently within the companies. 

Here is a check list of the most important points to have on the radar:

Employment law considerations:

  • In the event of regular remote working (as of 10 % of the annual working time):
  • Is written documentation in place (an addendum to the employment contract and, if relevant, a policy)?
  • Have the employer-protective clauses (on eligibility, on flexibility, on tax/social security, on IT security and on confidentiality) been addressed in the documentation?
  • Has the staff delegation been adequately involved (information/consultation below 150 employees; co-decision as of 150 employees)?
  • Has the remote working allowance been fixed?
  • In the event of occasional remote working (less than 10 % of the annual working time):
    • Is there a request/approval process in place?
    • Have the employer-protective rules (on eligibility, on flexibility, on tax/social security, on IT security and on confidentiality) been addressed, in a policy or elsewhere?

Regulatory considerations (for companies of the financial sector):

  • Is the mandatory telework policy ready?
  • Have the office presence rules been addressed, in particular for decision-makers and control functions?
  • Have the rules on the location (and tracking) of remote workers been adequately addressed?
  • Have means for the monitoring of the use of telework been foreseen, in particular with regard to the IT infrastructure?
  • Have employees been informed about their specific confidentiality obligations when performing telework?

Tax and social security considerations:

  • Have any limits been fixed to avoid adverse tax and/or social security consequences in one of the neighboring countries?
  • If employees are largely allowed to telework in their country of residence (other than Luxembourg), are rules in place to make sure financial consequences are, to the extent possible, borne by employees?
  • Has it been anticipated that, if more than 25% of a cross-border commuter’s working time is performed in his/her country of residence, not only the employee, but also the employer will need to be affiliated with the social security system of such country and pay contributions?
  • If employees are not allowed to largely telework in their country of residence (other than Luxembourg), has it been anticipated that business travel abroad will reduce the number of days available for telework?
  • Are the tracking processes in place to allow the company to comply with its regulatory reporting and administrative (tax and social security) obligations?

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