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Remote work in IT

The COVID-19 pandemic has accelerated technological change in enterprises. The technological revolution, the execution of which caused entrepreneurs problems, had to be implemented within a few months of 2020. In an instant, workers left their air-conditioned offices to move home with their company’s equipment. A real revolution broke out in the IT sector, where predominantly there are no logistical obstacles when it comes to working remotely. Certainly, because of this, and also partly due to the individualism of many experts in the field, this solution quickly gained popularity and many employees do not think about returning to the office at all.

It took everyone - employers, employees, but also legislators - to react to the pandemic situation. The Law of 2 March 2000 on special solutions related to preventing, counteracting, and combating COVID-19, other infectious diseases, and crises caused by them (“The Covid Law”) was introduced to the Polish law at the time of the pandemic, which comprised the first Polish regulations concerning the “real” remote work – alas, still incomplete and only temporary. Due to the still increasing popularity of remote work it became, obvious that it has to be permanently regulated in Polish legal system. This has happened in a way of revision of Polish labor code, dated December 1^st2022, which enters into force on April 7^th 2023.

How do we understand remote work according to the revision of the Labor code?

Article 67¹⁸ of revised Labor code defines remote work as working fully or partially in place indicated by the employee and agreed with the employer, including the place of residence of the employee, in particular using the means od direct distance communication.

Here we must make an important remark - labor code relates only to the employees - the legislator does not interfere how the work is being done by the self-employed. In b2b relationship, onsite work is more problematic than remote work.

As of April 7^th 2023, remote work formally replaces telework - which was not very popular and not very practical.

This post does not cover the details of introducing and cancelling of remote work. Here we concentrate on some general issues which should be taken into consideration when introducing remote work.

What should be considered when intoducing remote work?

Performing work while sitting on a Thai beach, in a cottage in the Polish countryside, or in a Parisian café is tempting and the idea has been quickly picked up by developers. However, this solution is fraught with a series of risks, which, in a nutshell, will be discussed below:

Firstly, the tax matters related to working abroad:
- a change in the employee’s place of residence may cause the employee's deductible expenses to be miscalculated, forcing the payer (i.e., the employer) to adjust the employee's advance income tax payments;
- there is a risk of a change in the employee's tax residency, which could, in turn, mean the obligation to pay income tax abroad and the necessity to register with the social insurance system of another country;
- the employee may also be affected by local tax obligations unknown in Polish legislation;
- the permanent performance of work abroad may be considered as the conduct of an entrepreneur's activities in the territory of that country. In this situation, there is a risk of tax establishment.
Secondly, the Social Insurance Institution (ZUS) issues related to working abroad: in principle, an employee shall be subjected to the social security of the member country, in which the work is performed. It may turn out that even the temporary performance of the work gives rise to social security obligations in a foreign country. The lack of in-depth analysis of the topic may cause that kind of employee to be taken as an uninsured person.
Thirdly, the Labor Code: the most pressing issue arising from the Labor Code is the subject of health and safety. An employer has many responsibilities associated with, for instance, accidents at work, which they are unable to fulfill when the employee is hundreds of miles away. Furthermore, an employer must be able to control meeting the premises and technical requirements of the remote worker, which is difficult to achieve in the case of mobile workers being far away from the employer.
Fourthly, security of information: employee and employer must continually comply with the requirements related to the processing of personal data, the security of the network through which the employee connects, and the security of equipment. Inevitably, such control in case of remote work is more difficult. The use of one's own private, or worse, third-party equipment (e.g., when company equipment has suffered a malfunction) is incompatible with data security requirements.
Fifthly, the GDPR: the provision of work by an employee will often lead to the employer authorizing the transfer of personal data outside the EEA, which in turn is generally forbidden.

The materials seen on television often portray remote work as convenient and attractive, not so rarely in a dreamy set-up on an island. However, these kinds of images are misleading and have little to do with legal reality.

The problems mentioned above also partially affect self-employed personnel. Although they are not affected by the regulations of the Labor Code, the risks concerning, for example, change of tax residence, the establishment of tax domicile, or violation of personal data processing rules are still present.