Workation: maximizing productivity and leisure in remote work

Daniel López Mar 19, 2024

This concept has emerged in recent years as a positive consequence of the pandemic.

The "Workation," a fusion of the words "work" and "vacation," represents a new way of working that allows employees to perform their duties from destinations typically associated with rest and leisure.  

The transition to remote work has demonstrated the effectiveness of adopting more flexible work methods, leading to a significant increase in satisfaction for both employers and employees. As travel restrictions eased during the pandemic, this practice extended beyond national borders, progressively integrating into corporate policies. From a business perspective, workation has emerged as a powerful tool for recruitment, talent retention, and corporate image enhancement—aspects that should not be underestimated. While it should be seen as an employee benefit, it is essential not to disrupt company operations. 

Therefore, it is common for employers to set time limits for this work modality (typically between 15 days and 3 months).

Legal and Practical Aspects

In Spain, different forms of remote work are established, regulated by Law 10/2021. Among these modalities are remote work and teleworking. Remote work involves a fraction of tasks being carried out outside the company's physical premises, while teleworking entails all work activities being conducted off-site, usually from the comfort of the employee's home. When Workation occurs within an employment relationship in the same country, and the employee performs their duties remotely from any point within the national territory, the situation is relatively straightforward. The current legal framework provides us with the necessary flexibility to negotiate and establish conditions tailored to this new work reality.

 However, the situation becomes more complex when the chosen remote work location is in a country different from the worker's usual location. From a legal standpoint, companies face a series of challenges when it comes to international teleworking. This entails considerations regarding the applicable labor law, tax obligations, and social security, which may arise in the country where the work is performed. 

Therefore, the country of origin and destination, as well as the duration and frequency of remote work, can significantly affect the complexity of workation, even making it impossible if migratory issues do not allow it.

Therefore, before implementing any workation policy, it is essential to consider four key aspects:

  • Migration Issues: It is essential to consider the relevant regulations and visa requirements, which vary depending on the country and duration of stay. Therefore, it is necessary to ensure compliance with all migration laws and procedures to avoid potential legal issues or setbacks during the stay abroad. Some companies establish permitted destinations for their employees, thus avoiding potential complications with third countries.
  • Applicable Labor Law: In principle, as workation is considered a short-term temporary modality, the labor law of the country of origin will continue to apply. However, according to Regulation Rome-I, consideration should be given to the labor law of the destination country if it offers more favorable conditions for the employee. In EU member states, where minimum labor rights are standardized by European directives, the situation tends to be less complex. However, if Workation is allowed in countries outside the EU, it will be crucial to conduct a preliminary analysis of labor rights in the destination countries to ensure compliance.
  • Social Security Legislation: In situations of global employee mobility, the applicable social security legislation would be that of the destination country. However, most applicable bilateral social security agreements allow the maintenance of the origin country's social security legislation for up to 24 months (extendable to 5 years). Additionally, thanks to the Framework Agreement on Social Security signed between many EU countries, applicable from July 1, 2023, it is possible to avoid contributions in the destination country in cases of remote work, facilitating both workation situations and remote work for longer periods.
  • Tax Aspects: Residence tax rules of the country of origin and destination should be analyzed beforehand. However, it is presumed that being short periods (less than 183 days per year), the employee conducting workation may continue to be tax resident in the country of origin.

In summary, while workation offers new opportunities for employees and employers, it is crucial to consider the mentioned aspects both in the country of origin and destination. Although technically possible, we strongly recommend that companies seek the expertise of global employee mobility specialists.

Baker Tilly International
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