Working in places where most people go to vacation – workations are gaining popularity in Switzerland. Lots of employees envision combining work with vacation and spending some time working at a vacation destination in Switzerland or abroad.
But this flexible work model for working vacationers gives rise to several work, tax and (social) insurance questions for employers. Our experts have the answers for you.
A workation is when someone combines work with vacation. Instead of working in the office or from home, employees work in the mountains, at the beach, poolside or in a co-working space, located either in Switzerland or abroad. Often, workation is referred to as a home office abroad or remote working on vacation.
There are no standard rules for this new work model. While some employees choose to reduce their daily hours, others switch between their job and time off on a weekly basis. And a workation can last from just a few days or weeks to several months.
The pandemic proved that in many industries and professions, it is possible to work from anywhere. Work processes have been digitalized, meetings are increasingly taking place online or are hybrid – even after everyone has returned to the office. This has accelerated the evolution of more flexible work models.
Many employees want more flexibility so it’s easier for them to juggle their personal and professional lives. Workations are an opportunity for employers to meet this need.
The same criticisms made against a home office are often also made against workations:
And depending on where they are working from, workations have other negative considerations: If employees are in other times zones, meetings must be moved to accommodate their location. Bad Internet connections make meetings tedious for everyone. This can make it more difficult to communicate and organize work in the team, which is frustrating for all involved. When employees are working from abroad, it is especially important to iron out the details in advance to avoid unpleasant surprises.
To date, workations have no set definition under Swiss labor laws. This is why there are no standard rules to guide companies and employees. So instead, employers and employees make individual agreements based on the duration, location, function at the company and other factors.
Blanket assumptions about labor laws, taxes and insurance with regards to workations are therefore either not applicable or very limited in their application. This means the requirements that must be met depending on the location and duration of the stay abroad can vary wildly. For this reason, employers should consider every workation on an individual basis and review the key factors in advance.
“No, a workation almost always requires the approval of the employer,” says Leo Loosli, a legal expert at AXA-ARAG. “Employees have no legal entitlement to a workation. Employers can give their permission on an individual basis or they can include it as a general clause in the employment contract or staff regulations.”
A workation is not the same as working from home because of the “vacation” component involved. For this reason, any rules that apply to home offices have no legal effect with regard to workations. Even if the workation is in Switzerland.
According to Leo Loosli of AXA-ARAG, there is no general answer to this question. Workations often involve international aspects, i.e. rules could differ depending on which country the employee is staying in. For this reason, it is extremely important to review each case individually.
Generally, the employment contract from the country of origin takes precedence, but there may be other provisions in the vacation country that apply.
There are several factors that need to be considered here. If the employment conditions are breached, then you must clarify whether the employee is subject to Swiss law in this specific case. If so, then liability is determined based on the provisions in the employment contract and the relevant standards in the Swiss Code of Obligations.
Employees are basically responsible for any residence permits, visas, etc. themselves unless there are regulations that state otherwise.
However, in both cases employers could potentially be held liable.
Not necessarily. The changes can be made in the employment contract or with a separate agreement. If workations are being requested with increasing frequency at your company, then it may be wise to add a general regulation to your employment contracts or staff regulations.
Regardless of this, we recommend making a separate agreement for every request that includes the following points:
“Here too the subordinance of social insurance plays a key role. Employees who are subject to Swiss social insurances during a workation remain insured against accidents under the AIA and as per the GICs of AXA, employees abroad remain insured under the employer’s group supplemental accident and daily benefits insurances,” notes Victor Wirgailis of AXA. “Depending on the insurance company, individual coverage restrictions may apply while abroad. So in this case, we recommend reviewing individual cases with the OASI compensation office and the insurance company before the employee leaves on their workation.”
Good to know: Employees are responsible for paying for treatment abroad if they get sick and this should be explained to them before they leave. In our blog “Emergency abroad: Will my health insurance pay?” you can read about which benefits basic insurance covers and in which cases it’s worth taking out additional coverage.
This depends on their personal situation and which country they go to. Generally, employees will not owe any taxes if they stay for just a few days or weeks. But it is very important to clear this up in advance because the employer may be subject to tax in addition to the employee. It’s a good idea to ask the responsible tax department.
“There is no general answer to the question of social insurance subordination,” says Victor Wirgailis, underwriting expert at GPI AXA. “If workations are limited to no more than 20 to 25 percent of an employee’s annual hours, then it is likely that they will remain covered by Swiss social insurances. But for longer stays, this may not be the case depending on the country they are going to, such as one outside of the EU/EFTA. So we recommend that you clarify each case in advance with the OASI compensation office.”
This depends on the actual agreement you have with your employees. Both parties are free to set the rules.
As a workation, by definition, includes some amount of vacation time, it makes sense that some vacation time or overtime should be used.
In principle, employees are entitled to receive their salary even when they are on vacation. When they continue to work (the amount specified in advance) under normal circumstances while on workation, then they are entitled to their full salary, depending on the individual situation. In order to avoid uncertainty and disputes, it is worth having a comprehensive agreement of terms.
As the employer, you should ensure in advance that data security is guaranteed in the workation country. The concrete measures should be determined on a case-by-case basis.