How Can Companies Implement Workation in a Legally Compliant Way?

Workation can be an important component of a modern employer value proposition, but it is more than just an organizational benefit.

Before employees work from abroad, companies must assess social security obligations, tax law, immigration and employment law, as well as data protection and IT security requirements.

The key is a binding workation policy that clearly defines permitted countries, maximum duration, eligible roles, approval processes, security standards, and responsibilities.

Legally compliant workation arrangements are not achieved through discretionary case-by-case approvals, but through clear guidelines and documented decisions.

The available legal framework and research indicate that workation arrangements involve several areas of law simultaneously.

Social security, taxation, immigration law, employment law, data protection, and IT security are particularly relevant.

Within the EU, the European Economic Area (EEA), and Switzerland, the A1 certificate is an important document. It confirms which country's social security legislation applies during temporary cross-border employment.

For employers, it is important to note that an A1 certificate should generally be applied for electronically in advance when employees temporarily work abroad.

From a tax perspective, the so-called 183-day rule is an important consideration, but it is not sufficient on its own to determine tax obligations.

Under many double taxation agreements, the relevant factors include not only the duration of the stay, but also which entity economically bears the employee's remuneration and whether the activity could create a permanent establishment or another taxable presence abroad.

Data protection requirements depend on the type and sensitivity of the data being processed, the security of technical access, device protection, network connections, and the country in which the employee is staying.

Secure connections, such as virtual private networks (VPNs), are a key security standard when accessing internal company systems.

It is important to distinguish between correlation and causation.

Flexible working arrangements may be associated with greater employer attractiveness, stronger employee retention, and a better candidate experience.

However, this does not automatically mean that workation alone leads to improved recruiting outcomes.

What matters is whether the arrangement fits the role, the organization, the applicable legal framework, and the company's leadership capabilities.

Additional supporting evidence could be obtained from internal data on application rates, employee retention, utilization of workation arrangements, approval times, compliance cases, security incidents, and employee satisfaction.

Workation is relevant because flexibility is increasingly perceived as an important factor in employment decisions.

Highly qualified professionals and executives, in particular, consider not only salary and position, but also working arrangements, autonomy, mobility, and work-life balance.

For medium-sized companies in banking, energy, manufacturing, mechanical engineering, wholesale and retail, as well as IT and technology, a clearly regulated workation model can contribute to employer attractiveness.

At the same time, operational and legal risks arise when employees work abroad without clearly defined rules.

Relevant risks include:

• Incorrect determination of applicable social security legislation

• Tax obligations arising abroad

• Risk of creating a foreign permanent establishment

• Violations of immigration or work permit regulations

• Data protection and IT security risks

• Unclear liability in the event of workplace accidents

• Unequal treatment across roles or locations

• Conflicts regarding leadership, availability, and working hours

Workation is therefore not an isolated HR benefit, but a matter of corporate governance.

Companies must structure flexibility in a way that remains attractive, transparent, and manageable.

A substantive approach is reflected in whether workation arrangements have been legally assessed, organizationally regulated, and technically secured.

Superficial measures become apparent when companies promise international flexibility without defining clear criteria, processes, or risk assessments.

Common Misconceptions and Superficial Measures

Inadequate workation policies often arise from overly simplified assumptions.

Common misconceptions include:

• Workation is legally equivalent to remote working within the employee's home country.

• No additional legal assessment is required within the EU.

• The 183-day rule resolves all tax-related questions.

• Short stays abroad are always legally unproblematic.

• Verbal approval from a manager is sufficient.

• Data protection is guaranteed simply by using a company-issued device.

• Workation can be offered equally to all roles.

• An attractive benefit is more important than clear compliance rules.

These assumptions increase risks because workation involves several legal and organizational responsibilities at the same time.

Characteristics of a Structured, Professional Approach

A professional approach treats workation as a regulated process.

Key elements include:

• A written workation policy

• A clear definition of permitted countries

• A maximum duration of workation per year

• Prior approval from HR and the relevant manager

• Assessment of social security obligations and A1 certificate requirements

• Preliminary tax assessment for longer stays

• Verification of immigration and work permit requirements outside the EU and EEA

• Rules regarding working hours, availability, and time zones

• Clear data protection and IT security standards

• Exclusion of particularly sensitive activities where necessary

• Documentation of all approvals

• Consistent criteria to prevent unequal treatment

A substantive approach emerges when workation is not treated as a spontaneous individual decision, but as a controlled component of modern working arrangements.

Recruiting can position workation as an element of employer attractiveness, but the arrangement should be communicated realistically and in relation to the specific role.

The decisive factor is not maximum flexibility, but the reliability of the working model.

Candidates need clear information about whether workation is possible, to what extent it is permitted, and which conditions apply.

Leaders play a central role because workation only functions effectively when objectives, communication, responsibilities, and availability are clearly defined.

A leadership culture that relies heavily on monitoring physical presence will find it more difficult to implement workation successfully than an organization with clear performance expectations and reliable communication routines.

Assessment methods and personnel selection can become relevant when roles involve a high degree of remote work, international collaboration, or independent responsibility.

In such cases, self-management, reliability, communication skills, digital working competencies, and accountability should be systematically evaluated.

For HR, workation therefore connects employment law, talent strategy, and leadership quality.

The arrangement only works professionally when it aligns with the role, the company's risk profile, and its level of organizational maturity.

Example 1 - A mechanical engineering company initially allows workation through informal approvals at management level.

After several individual cases, it becomes apparent that the duration of stays, choice of countries, and access to technical documentation have not been assessed consistently.

Key lesson: Workation requires clear criteria before individual exceptions become established practice.

Example 2 - A bank considers offering workation for selected back-office positions.

Due to the sensitive nature of customer data, the company establishes particularly strict rules regarding permitted countries, access rights, VPN usage, and the handling of physical documents.

Key lesson: Data protection and IT security requirements must be assessed according to the specific role and type of data involved.

Example 3 - An IT company promotes workation as part of its recruiting communications.

After introducing a binding approval process, the company transparently defines permitted countries, maximum duration, and minimum technical security standards.

Key lesson: Employer attractiveness comes from reliable flexibility, not unlimited promises.

What Does Workation Mean?

Workation refers to temporarily working from abroad, often combined with a private stay.

The employment contract, salary arrangements, and employer generally remain unchanged.

Does a Company Need an A1 Certificate for Workation?

For temporary work within the EU, EEA, or Switzerland, companies should generally assess whether an A1 certificate is required.

The certificate serves as proof of which country's social security legislation applies.

Is the 183-Day Rule Sufficient for Workation?

No. The 183-day rule is only one aspect of the tax assessment.

Other relevant factors may include which entity bears the remuneration costs, permanent establishment risks, national tax regulations, and applicable double taxation agreements.

Which Countries Are Particularly Critical for Workation?

Countries outside the EU and EEA often require particularly careful assessment because visa requirements, residence permits, work permits, data protection standards, and local tax regulations must be reviewed individually.

What Role Does Data Protection Play in Workation?

Data protection is essential when employees process personal, confidential, or business-critical information.

Secure access, clear device requirements, VPN usage, and rules for transporting documents are necessary safeguards.

Should Workation Be Communicated as a Recruiting Benefit?

Yes, provided the arrangement has been legally assessed and is supported by reliable organizational procedures.

Unclear or exaggerated promises can create expectations that the company may later be unable to fulfill.

Workation is neither a guaranteed success nor merely an employee benefit.

Companies must systematically assess social security, taxation, immigration and employment law, as well as data protection and IT security.

For HR, the central responsibility is to structure flexibility professionally and replace discretionary individual decisions with clear rules.

Legally compliant workation arrangements can strengthen employer attractiveness when they align with the role, the organization, and the company's risk profile.