…but not without boundaries?

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The pandemic has increased the demand of employees to work from anywhere. In the past, there were few employees that made a demand to work from a foreign country, but in light of quarantine regulations, closed borders, and lockdowns, employees feel a bigger desire to choose their place of work irrespective of geographic boundaries. Reasons may be vast from family needs to the desire of better weather during the lockdown. With mobility having become easily available for the majority of employees and visa treaties being in place for tourism in a lot of countries, employees may lack the understanding of the complexity for employers involved.

The main areas that employers will need to look at are:

  • Corporate tax
  • Income tax
  • Social Security contributions
  • Employment law
  • Immigration law

So overall, five areas that require compliance in order to facilitate the possibility for an employee to work abroad for personal reasons while not exposing the employer to compliance risks. This article will focus on the impact of immigration and employment law on these set-ups.

Immigration Law

Generally, employees do not consider this area as problematic as it does turn out to be in the actual constellation. Employees are used to traveling freely to most countries for touristic or even business purposes. However, the activities performed in most scenarios of remote work do not fall under these exceptions from visa or permit requirements. In most countries as soon as a person performs productive duties a work visa/permit will be required.

Now, one may say that a company is willing to fulfill this requirement for their employees. However, the framework to apply for a work visa/permit may be subject to conditions that restrict the ability to provide the support that you would be willing to give as an employer. To outline how your capacity as an employer may be impacted by immigration regulations, we will provide examples of legal restrictions to support the application for a work visa / permit in Germany and the U.S.A.


In general, in order to sponsor a work visa/permit for a non-EU national, a local German employment agreement is required for all but two visa types. As such, you would require an entity in Germany willing to provide an employment agreement for the duration of the remote working term. Of the visa/permit categories that do not require a local employment contract, the only category that would allow an employee to work remotely from Germany only for personal reasons is § 26 BeschV (Beschäftigungsverordnung – Ordinance on the Employment of Foreigners). Only this visa category allows a foreign entity without any ties to Germany to apply for a work and residence permit for nationals of certain countries. As such, as an employer you would only be able to provide this opportunity to nationals of Andorra, Australia, Canada, Israel, Japan, Republic of Korea, Monaco, New Zealand, San Marino, the United Kingdom, and the United States.

Another common misconception of employees is that their Blue Card EU would allow them to work anywhere within the E.U. Employees believe that the Blue Card EU allows this because of the suffix EU and the availability of this title in other E.U. countries as well. But the Blue Card EU is based on an E.U. directive from 2009, which had the aim to attract highly qualified talent to the E.U. The directive set forth that applicants must have a work contract for one year with 1,5 times the average salary of the E.U. country concerned and a proof of necessary qualification and a valid travel document. Now this being said, the example below can outline, why the Blue Card E.U. from its concept cannot be the basis to work from different E.U. countries.


Eliza Example, a South African national, works for a start-up in Barcelona in marketing and is in possession of a Blue Card E.U. While out one night in Barcelona, Eliza meets her new boyfriend, a German national resident in Berlin. She hears about all the great parties and clubs in Berlin and decides, she now wants to move to Germany to be with her new boyfriend. Eliza completed a three-year training in South Africa and has a salary of EUR 45,000 gross per year.

In Spain, a Blue Card E.U. holder can either be in possession of a university degree or a three-year training or have 5 years of work experience in the field of employment. The salary threshold is EUR 33,908 gross per year.

In Germany, on the other hand, the salary threshold is EUR 56,800 gross per year and the applicant is required to have a recognized university degree in his field of employment. As such, the requirements to be met are a lot higher.

If Eliza would now move to Germany and work remotely for her Spanish start-up, she would be in violation of immigration regulations. She neither has the required degree to qualify for a Blue Card E.U. in Germany nor the salary.

United States of America

While employees of certain nationalities are exempted from a visa under the visa waiver program, the entry under the visa waiver program and/or the B-1 (business)/B-2 (tourist) visa is limited to temporary stays. In order to be allowed to enter and stay in the United States for a limited period of time, the employee must show that he has a residence outside the US, which he intends not to abandon, will only be in the U.S. for a limited period, and only seeks admission for legitimate activities related to business or pleasure. Permitted activities without a work visa do not have a clear definition, but can generally be considered as such, when the principal place of business and the actual place of accrual of profits, if any, is in the foreign country. A definition of this was made in the Hira Ruling, which stated that a tailor coming to the U.S. to take measurements of customers to be able to manufacture custom suits in Japan for his clients, would be a permissible business traveler activity. Most of the examples of proper B-1 activities relate to the so-called Hira Ruling as they relate to activities that are incidental to work that will principally be performed outside of the United States, such as:

  • engaging in commercial transactions, which do not involve gainful employment in the United States (such as a merchant who takes orders for goods manufactured abroad);
  • negotiating contracts;
  • consulting with business associates;
  • litigating;
  • participating in scientific, educational, professional, or business conventions, conferences, or seminars; or
  • undertaking independent research.

For this purpose, let us review another two cases to show the clear distinction required on activities to establish whether a B-1 visa (waiver) or a work visa would be applicable.


Daniela Deutschland, a German national, wants to spend 8 weeks working from New York in order to enjoy Christmas shopping in the Big Apple and take advantage of some Black Friday deals. Daniela works as an UX Designer for a German marketplace website. While she is in New York for 8 weeks, she will review the websites of other U.S. marketplace websites. She will not complete any programming, but solely conduct research on competitor websites and customer acceptance. Only when she returns to Germany, will she start designing for her employer. Her boyfriend will remain in Germany for these 8 weeks and live in their apartment. She will continue to receive her salary to her German bank account from her German employer and is living in a hotel for the entire stay.

This activity as it is solely preparatory in nature should be permitted at the discretion of the Customs and Border Protection Officer when entering the U.S. As a German national, Daniela will not require a visa, but can enter on ESTA.


Once again, Daniela Deutschland from the example above, would like to travel to New York for 8 weeks. She still has the same position with her employer. However, this time, she would like to receive her salary on an U.S. bank account in order to rent an apartment in New York. She will also start programming the website for her employer. She will also receive support from an U.S. design agency and work with them at their offices for a few days to finalize the website design.

Just by a slight variation of the activities, this example will require Daniela to apply for a work visa prior to traveling to the United States, as the activities can no longer be considered preparatory.

U.S. Work Visas

While there is not a strong focus on having an U.S. employer for several work visas in the United States, most visas will require a U.S. petitioner to sponsor a work visa in the United States. This sponsor must be in the United States. This could be a U.S. entity of the foreign employer or a business partner. However, this sponsor will also be liable for any immigration violations by the employee.

While in all three scenarios, there is little argument on how the activity could impact the respective labor markets, both countries have decided to restrict the permissible activities without a work authorization to a very limited scope to avoid any misconduct.

Employment Law

While in principle, there is the possibility to choose the applicability of law in international contracts, employment contracts are subject to certain restrictions. The Hague Principles explicitly excluded the choice of law to freely extend to consumer and employment contracts. The reasoning for this was that one party has a weaker bargaining position. The exclusion clearly states that this applies to induvial and collective employment agreements.

European Union

Within the European Union, cross-border employment relationships can reference the Rome-I regulation in regard to applicability of law and limitations in regard to the choice of law. In general, the law of the country of performance will find applicability. However, the parties are free to agree to the applicability of a different employment law. The choice of law is restricted by the mandatory provisions of the country that the employee is actually performing their work in. This means that any laws that have a protective character will still extend to the employee. What laws have a protective character may vary by country and the scope of these as well. In general, working hours, statutory holidays, and vacation regulations, will have protective character.
Furthermore, some newer regulations have protective character as well, which can extend to employees working remotely. Such a newer regulation may be “the right to disconnect.” This protective legislation has been introduced in France (January 2017), Ireland (April 2021), and Portugal (November 2021).

These regulations can impact an organization’s ability to complete their work in a remote work set-up based on time difference or respective capacity planning. To illustrate how this can impact the ability to work in a cross-border set-up, we would like to outline one example:

Working Hours

An employee working in Germany wants to work remotely in Copenhagen for 4 weeks. He is staffed on a project, which has been planned for several months. The deadline is fixed and his efforts have been clearly calculated to be 40 hours per week as permissible in Germany. However, when he is in Denmark, he is only allowed to work for 37 hours per week. This means the project manager is now lacking 12 hours of capacity per week by allowing this employee to work from Denmark.

Right to Disconnect

An employee, who is a Portuguese national, who regularly works for his IT employer in San Francisco decides to work on his home leave in Lisbon. Due to the time difference, his employer would always be reaching out to him during night hours if he respected the right to disconnect. Exceptions may be applicable under narrow circumstances. However, if these are not observed the employer may be subject to fines.

International Context

As long as there is no uniform law in place regulating the applicability of labor regulations, countries are free to decide on the scope of applicability of their local employment laws to cross-border work. Most countries are receptive to the choice of law, but reserve the right to apply protective legislation to employees working in their country. Specifically, Canadian courts have repeatedly held that a court can override a choice of law clause if the local law is procedural and the nature of the law is of a protective nature and should be applied. In a 2018 ruling, an Ontario court held a longer notice period is to be applicable to an employee with an employment agreement containing a choice of law clause for the U.S., for the reason that the choice of law must be “bona fide and legal, and there is no reason for avoiding the choice on the ground of public policy” in order to govern the contract. As the employee was older and had lower chances of receiving future job opportunities on the job market, Canadian employment law sought to give longer notice periods that were not observed by the choice of law clause. Based on a matter of public policy, the court found that the longer notice period needed to be observed.


As such, overall, it can be said that creating compliant policy allowing remote work bears quite some complexity for the employer. It is not only legally challenging, but can also pose practical restrictions on an employer on the day-to-day activities. It is questionable whether governments globally will adapt their policies and regulations to meet the demands of the young remote workforce.


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