Remote IT professionals – legal requirements

Employing skilled workers remotely has become a popular working model. Employees from non-EU countries, so-called third countries, often work for German companies from their home country, for example in the IT sector. What do companies in Germany have to consider legally and contractually?

IT specialists from third countries

The English term "remote" means something like "far away" or "remote" in German. Accordingly, remote employees are workers who work for a company outside the company headquarters - from a distance. In principle, remote work is possible in all professions that do not require a physical presence at the company's headquarters.

Particularly in the IT specialists recruited abroad many companies now take the approach that they do not bring these employees to Germany at all, but have them work remotely in their home country. This often involves employing people from non-EU countries (third countries). This employment model raises the question of which (labor) law provisions and framework conditions must be observed.

Employment contract with remote IT employees

If you Remote employees from third countries, you must conclude a (valid) employment contract with the employee. In doing so, you must also observe the legal provisions of the country in which the remote IT employee is working. It may therefore be necessary for you to adapt the standard employment contracts you use to the respective national law of the employee's country of residence.

The employment contract should regulate the essential working conditions such as place of work, working hours, remuneration, vacation, etc. The location from which the remote employee will be working should therefore also be specified. The currency in which the salary will be paid should also be stipulated in the contract. If the remote employee's country of residence is in a time zone other than Germany, the employment contract should also include a provision on the timing of working hours.

Labor law provisions

In principle, the labor law of the country in which the work is actually performed applies to remote work. This is particularly important with regard to maximum working hours, remuneration/minimum wage, protection against dismissal, vacation entitlements and continued payment of remuneration in the event of illness.

1. is a work permit for Germany necessary?

There is no general answer to this question. In some countries, there are special regulations according to which a work permit for the country in which the company is based is required even if the employee works from their country of origin.

This means that, depending on the country of origin of the Remote workforce check whether or not a work permit is required for Germany. Information on this can be obtained from the competent national authorities.

2. observe social security aspects

In addition, tax and social security aspects must be taken into account for this form of employment. The social security agreements that Germany has concluded with numerous countries outside the EU or the European Economic Area (EEA) play an important role here. These agreements serve to mitigate the disadvantages that can arise from employment in countries with different social security systems.

There are currently social security agreements between Germany and the following third countries: Albania, Australia, Bosnia-Herzegovina, Brazil, Canada, Chile, China, India, Israel, Japan, Quebec, Kosovo, Morocco, Moldova, Montenegro, North Macedonia, Philippines, Serbia, South Korea, Tunisia, Turkey, Uruguay, USA.

Competitive advantage through remote work?

Cross-border remote work gives employees the opportunity to work from their place of residence and maintain their center of life. Through remote work, German companies can gain valuable IT specialists which can be an important competitive advantage. The flip side of the coin is that labor, tax and social security requirements can be complex because the legal situation in the respective country of origin must also be taken into account. It is essential that companies deal with this in advance and inform themselves accordingly.

In addition to legal and tax issues, you should also prepare well for the remote work model in other areas. Make sure that the technical requirements for good and smooth communication (stable internet connection, etc.). Bear in mind that it may occasionally be necessary for the remote employee to appear in person in Germany, which in turn incurs costs for travel, accommodation, etc.

In addition, remote employees should also be familiarized with at least the basics of the corporate culture and integrated into this culture. Suitable (online) events can help here, in which the customs and values of the company and any existing compliance guidelines are communicated to the foreign employees.

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