A Global Workforce and Covid-19: Insights from Germany

Written on 8 Sep 2020

The Covid-19 pandemic caused great disruption for a workforce used to travelling, living and working in in multiple jurisdictions across the globe. With countries closing their borders and air travel widely suspended, this suddenly came to a halt. For example, US employees might have found themselves stuck in Germany, or unable to start work there.

This situation issues ranging from expiring visas and residence permits to social security and tax considerations, as well as local regulations regarding deputation for employees now working remotely. In this Insight, we explore two scenarios: US employees working remotely from Germany for their US employer; and planned deputations to Germany from the US.

Suddenly on deputation to Germany

After the initial shock caused by Covid-19 had passed, a lot of employers enabled their employees in Germany to work remotely. Each of us learned that working from home was possible. From a legal perspective, these employees were suddenly 'on deputation' to Germany. This entails a number of legal issues and risks that need to be addressed.

Immigration

First and foremost are the considerations in relation to visa and residence permits. US citizens may enter Germany visa-free for touristic purposes for a period of up to 90 days, but require a residence permit beyond that, or if they want to work in Germany. In the beginning of the pandemic, German Immigration Authorities easily granted extensions of the visa-free stay as there were no flights available for US citizens to travel back home. This has now changed and foreign citizens are required to use the standard procedure again. This means that they need to apply for an extension or a residence permit with the local German immigration authorities.

A residence permit is also necessary where an employee performs their work within the territory of Germany irrespective of the nationality of the company the employee works for. The visa-free stay does not suffice in case work is being performed in Germany. Since air travel has slowly picked back up, the regular procedure must be followed once again: Employees may either work in Germany on a deputation or conclude a local employment contract, for example with a German subsidiary of a US enterprise.

Social security

Employees working remotely from Germany may become subject to German social security rules. This means that employees might be required to contribute to German statutory health, pension and unemployment insurance. In relation to a deputation, this may be avoided by filing an application for a certificate of coverage proving that the employee will remain subject to US social security under the Social Security Agreement concluded between Germany and the US.

Minimum employee protection

German law demands a certain level of employee protection to be extended to employees on deputation to Germany irrespective of the law applicable to the employment relationship as a whole. This includes maternity protection, maximum working hours, minimum paid vacation and continued remuneration in case of illness. This does, however, not extend to the notorious rules on general protection against dismissal. Nevertheless, special protection against dismissal of pregnant and disabled persons is applicable.

Travel bans

As travel bans remain in place, entry to Germany from non-EU countries remains highly restricted, meaning that trips to Germany are only possible in exceptional circumstances at the moment. The Federal Ministry of the Interior has named certain countries whose citizens may again enter Germany freely – the US is not amongst them.

Thus, only highly qualified skilled workers from the US may enter and even then only if it is absolutely necessary and the tasks may not be performed from abroad or at a later stage. If that is the case, it is advisable to obtain a letter from the German mission abroad stating that the employee in question does fulfil these exceptional prerequisites. It is unclear when these travel restrictions will be lifted.

Protecting your workforce

At the outset of the Covid-19 pandemic, the priority for businesses was to ensure that their workers were safe, and that operations could continue with staff working remotely from wherever they happened to be at the time. As the situation has moved on, it is important to ensure that those who are working in jurisdictions that differ from their usual local abide by immigration rules, and that the business complies with the relevant social security and employee protection provisions. Please get in touch if you would like to discuss how we can help protect your business and its workforce.