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Work from anywhere (WFA) in the IT industry

Cristina Ticu Jianu
Cristina Ticu Jianu
Diana Gaitan
Diana Gaitan

I. General aspects – premises

Given that the current circumstances (June 2021), regarding the development of labor relations, from the perspective of how to provide and deliver the service, are largely different from those of early 2020, the need arose to answer the question whether employees working in Romania can work, in telework, not only from home (work from home -WFH ), but from anywhere (work from anywhere- WFA).

Some of the current circumstances, found in practice, which we took into account when preparing this opinion, are the following:

(1) Carrying out work from home or from another physical place, it was found, in various studies conducted in the COVID 19 Pandemic from 2020-2021, that in many cases it was more productive. One of the practical examples can be found in the article Our Work-from-Anywhere Future[1] published by the Harvard Business Review, in which it is noted that WFA increased individual productivity by 4.4% regarding the case study analysed at the Patent and Trademark Office of United States (USPTO) which has several thousand WFA workers.
(2) Increased competition between employer companies that allow collaboration with employees in a more flexible way, more precisely, between employers who have developed a policy that allows remote work, e.g. through: work from home (WFH), or work from anywhere (WFA).
(3) Employee satisfaction, improvement of family life, comfort of family place, generated by geographical flexibility (i.e. living where they prefer) has increased.
(4) The costs of the employer related to the assurance of the work place for employees to carry out the activity decrease in the case of work from anywhere-WFA or work from home-WFH.
(5) However, the costs of employers with the security of data and information processed by employees have also increased.
(6) In the IT field, the risks of a work accident are quite low, if the norms and instructions for health and security at the work place.
(7) The intentions of employers and employees converge towards a more flexible approach (e.g. geographically) to labor relations, or in a hybrid version, more precisely, part of the working time to be carried out at the workplace provided by the employer, and another part, in telework regime (the physical place being at the employee’s choice).
(8) Basically, the trend that we found analyzing various public sources in the online environment at this time, is that, at least in the IT industry, labor relations are intended to be carried out in a share between 25-50 % of working time, in the manner with the physical presence of the employee at work provided by the employer, and the difference in WFH and / or WFA.

II. Legal regulations

Therefore, in this market context, we analyzed the applicable legislation in the matter, without claiming an exhaustive approach.

a) National legal regulations – Romania

The Romanian legislator has taken an important step in the sense that it has adopted a more permissive regulation regarding the performance of work from anywhere, by adopting Emergency Government Ordinance no. 36/2021[2]published in  the Official Gazzete in Romania no. 474/06.05.2021 that has amended, among others, two important regulations:

Law no. 81/2018 regarding telework activity, the amendment is the sense of repealing the provision (art. 17 para. 3) which provided for the obligation to include between the elements of the Employment Contract and the mention “c) the place / places of carrying out the telework activity, agreed by the parties;“ and

Law no. 319/2006 regarding safety and health at work, was in turn amended (art. 21 para. (4)[3] and para. (5) from the Law), in the sense that the proof of training by the employer in the field of safety and health at work of employees, can be made through electronic measures or on paper depending on the method chosen by the employer, established in the internal regulations.

Thus, the place of work performance, according to the labor legislation applicable in Romania, can be from anywhere (in Romania), if the specifics of the work allow it.

For example, we analysed the premise in which telework can be applied, respectively the case where an employer company has in its object of activity NACE Code: 6201 – Custom software development activities (customer-oriented software) and the employee’s position is of Engineer software system – COR Code 251205.

Like any freedom gained, a natural question arises, if the workplace could be anywhere, then it could be even abroad, as an example in Greece, or in other exotic destinations, non U.E., for example Maldives (in the current context of the least restrictive tourist places)?

In order to identify the answer, we evaluated the legislation from a double perspective, regarding both parts of the employment contract, thus:

The EMPLOYER is obliged to comply with the provisions regarding:

(1) the rights and obligations arising from the legal relationship of private law, for example the payment of the salary, the rest leave, etc., according to Law no. 53/2003 – Labor Code,
(2) the accessory rights and obligations, born from the legal relationship of public law of administrative-fiscal nature, such as (as a general rule) to pay the following mandatory contributions:
– C.A.S. (social security contributions – 25%),
– C.A.S.S. (health contribution – 10%),
– Income tax (10%), if the income tax exemption is not applicable to natural persons for income earned on salaries as a result of the “creation of computer programs” activities, in which case the employee may benefit from tax exemption on salaries and incomes similar to wages, provided at article 60[4] point 2 from Law no. 227/2015 regarding the Fiscal Code, if the conditions provided by Order no. 1168/2017 / 492/2018 / 3024/2018 / 3337/2017 regarding the framing the activity of creating computer programs, are cumulatively complied.
– C.A.M. (labor insurance for work -2,25%.) etc, and
(3) to follow the health and security legislation – Law regarding the health and security at work – Law no. 319/2006 .

The EMPLOYEE will benefit, in addition to the salary, from all social rights (eg) rest leave, medical leave, unemployment benefit, disability pension, etc., according to Law no. 53/2003 – Labor Code, Law no. 346/2002 on insurance for work accidents and occupational diseases, OU.G. no. 158/2005 on holidays and social health insurance benefits, Law no. 95/2006 on health care reform.

Health care in Romania.

Thus, if regarding the social insurance (pension), the income tax from salaries, they do not give rise to special application problems, regarding the risk that must be analyzed is in the situation where the employee suffers an accident at work during working hours (for example, a limb fracture) or it is found positive with Coronavirus, while being present on the territory of another state than Romania and will need, for example of emergency medical care, medical leave or disability pension grade 1-4, etc., these aspects must be carefully analyzed considering that the legislation mentioned above applies only on the territory of Romania.

The related costs for the medical care indicated above could be borne by the insurer, the Romanian State- National House for State Pension or the Ministry of Labor, Family, Social Protection and the Elderly, according with Law no. 346/2002 on insurance against accidents at work and occupational diseases[5] if the employee is on the territory of the Romanian state,  and if the COVID-19 infection is contracted as a result of work, would it be considered a labor damage or a work accident, as it results from the „The general provisions of the international labor standards relevant to the evolution of the COVID-19 pandemic”  published by the International Labor Organization[6].

If, for example, the Coronavirus infection is not the result of work, the employee could benefit from medical insurance under Article 222 para. 2[7] from Law no. 95/2006 on health care reform.

b) EU Legislation

(i) Medical care during the temporary stay in a EU member state

If the employee works telework, is in another EU Member State (for example, Greece) and will have an accident at work or will be positive for Coronavirus – and will be found to be an accident at work and will need medical leave, or, in the worst case, will die in the territory of the foreign state, and will need repatriation), the rights granted by the Romanian State under Law no. 346/2002, will operate only in the situation where the employee is on the territory of an EU member state, or a State with which Romania has concluded a Cooperation Agreement (for example, with Turkey[8]) from the employer’s disposition[9], so by delegation or secondment.

In practice, in order to be able to apply the rules on secondment (EU Directive 2018/957 of 28 June 2018 amending Directive 96/71 / EC on the posting of workers in the framework of the provision of services), the employer should have concluded a commercial contract with a partner, a company from the respective state (for example Greece – EU member state), in order to justify the secondment, and to resort to the A1 Certificate procedure.

One solution for telemarketers working in another EU Member State to benefit from medical services during their temporary stay is to request the issuance of a European Health Insurance Card (CEASS) in accordance with the provisions from art. 327[10] and the following from Law no. 95/2006 regarding reform in the health system.

Insured persons on the territory of Romania can apply for the European health insurance card, which grants them the right to the medical assistance that became necessary during their temporary stay on the territory of an EU member state.

Temporary residence means the movement of a person to one of the Member States of the European Union, for tourist, professional, family or study purposes, for a maximum period of 6 months.

If the Romanian citizen does not have his domicile or residence in Romania, he cannot benefit from the medical insurances from Romania.

(ii) Implications regarding the mandatory fiscal registration of the Romanian employee – if the place of work will be in an EU member state.

Considering the provision of article 6[11] from EU Directive 2004/38/CE from 29 April 2004 on the right of citizens of the European Union and their family members to move and reside freely within the territory of the Member States, which grants all EU citizens the right to reside in the territory of another Member State for a maximum period of 3 months.

Therefore, in order to avoid the fulfillment of additional conditions or formalities,  provided by Directive 2004/38/CE, point. 9-13[12] the period of time in which and employee can work thorugh telework from another state, it is necessary not to exceed the maximum duration of 3 months.

In the case the period of stay in a foreign country exceeds three months, the person in question is required to obtain a residency permit in that state and to register for tax purposes both the employer and the employee so that all contributions are paid in the foreign state according to the legislation of that state.

For a better understanding of the mechanism, we comparatively analyzed the situation of Romania, as an EU Member Stat, in the case of foreign citizens who have the citizenship of an EU Member State and who live in Romania for more than 183 days a year, or in successive periods together they accumulate more than 183 days in a calendar year, it is considered a resident person according to art. 7 para. 1 point 28 lit. c[13] from the Fiscal Code, and it is necessary to obtain a residence permit according to the Emergency Ordinance no. 194/2002 regarding the foreign’ regime in Romania as well as the obligation to registre for fiscal purposes according to the provisions of art. 59 para. 4[14] Fiscal Code,  pursuant to the provision from Order no. 3706/2016 for the approval of the Procedure for the registration of agreements concluded by non-resident employers who do not have their registered office, permanent establishment or representation in Romania and who owe mandatory social contributions for their employees, according to the provisions of applicable European legislation in the field of social security, treaties regarding social security to which Romania is a party, as well as other procedural aspects.

Also, the Romanian resident persons who live in another state for more than 183 days in a calendar year have to fulfill the obligations provided by art. 59 para. 5 and 7[15] regarding the change of the fiscal residency and the obligation to pay the tax from the obtained incomes.

Therefore, similarly, it is necessary to evaluate the legislation of the state where the activities are intended to be carried out by the employee.

c) International provisions.

If the employee wants a temporary job change in a telework regime in another non-EU state (for example, in Turkey / Maldives).

If the employee wishes to work in a telework regime in a third state (non-EU), it is necessary to keep in mind that EU legislation is not applicable in that state, so the legislation of each state must be analyzed. as well as if Romania has concluded bilateral agreements with the respective state.

For example, for the stay in Turkey, Romania concluded an agreement, Law no. 551/2002 for the ratification of the Agreement between Romania and the Republic of Turkey in the field of social security, signed in Ankara on July 6, 1999 in force since October 29, 2002 containing provisions regarding this subject.

III. Practical trends in other states about the application of telework.

In the analysis of the way in which the concept of telework or remote work is applied in other states, we identified several examples, of which we mention two interested examples.

In U.S.A., where in a city was developed, Tulsa- Oklahoma State, through a company –Tulsa Remote[16], which offers $ 10,000 to move to Tulsa, and through 36 Degrees North, offers a dynamic coworking space in downtown Tulsa.

In Europe, a recent example is Croatia, which, according to a recent article[17], named “How Croatia wants to attract digital nomads from all countries / The solution to combine telework and save the tourism industry” states the following:“ Croatia has amended the Foreign Act to allow non-EU nomads to obtain one-year residence visas and be exempt from income taxes.

Applicants must prove that they work remotely, that they have housing, health insurance and an income of more than 2,200 euros per month..”

IV. ALTERNATIVE SOLUTIONS

Considering that the analyzed legislation is applicable only on the Romanian territory, the companies interested from the IT industry, but also in other industries where the activity allows, can analyze for the period when the employee wants to carry out the activity abroad, regardless of whether it is EU member state or NON-EU, to use the the following alternative solutions:

a) To continue to provide the activiy in a telework regime

In this case, the employer continues to pay all social contributions due by the employee, but the period of stay cannot exceed 3 months in the EU.

In addition, it is useful for the employee to conclude a travel policy or a private medical insurance, which he will use when needed.

In case there will be a work accident / illness (expl. Coronavirus) / death, the insurances granted by the Romanian State insurer are difficult to obtain if the employee was not in delegation / secondment, but compensations can be obtained, care costs medical, repatriation costs in case of death, on the private insurance policy depending on the chosen insurance package.

At the same time, based on the European health card, the employee can benefit from medical services under the same conditions as in Romania in any EU member state.

b) Suspending the labour contract – conventional way.

In this case the employment contract can be suspended,  for exemple, for 30 sayd, pursuant to article 49[18] Labor code, and to continue to provide the IT services thorugh a legal entity (Authorized Person – P.F.A.), in which case:

– P.F.A. will be able to benefit from medical insurance services according to the provisions of art. 222 par. 3 of Law no. 95/2006 on health reform,

– natural person, holder of the P.F.A. will be able to additionally conclude a travel insurance policy (expl. with a private company) but also in this case some insurance companies provide coverage limited to 180 consecutive days for each trip during the validity period of the Policy.

Depending on the insurance conditions, the private insurer can support medical care, medical assistance in case of emergency, medical hospitalization, possible transport costs for returning to the country or repatriation in case of death.

For NON-EU States, e.g. Dubai / Maldives, or Turkey, medical indemnities / insurances can be obtained, etc., only if the employee is in delegation / secondment and if Romania has concluded bilateral agreements with the respective state. If he is not in the delegation, the employee can benefit from indemnities or settled medical services if the employee benefits from a private health insurance policy for the entire duration of the stay under the insurance conditions offered by the insurer.

V. CONCLUSIONS

In conclusion, we appreciate that, from the perspective of the Teleworking and the Security and Health in Work legislation, norms applicable in Romania, the employee can work in telework from anywhere, even outside Romania, but the presence of the employee on the territory of another state requires additional verifications regarding the legislation applicable in the respective state, both regarding the right of residence and regarding the taxation and social insurance regime.

Given that the evolution of technology is a real challenge from a legislative perspective, the current context can be a time for reflection to adapt legislation globally, in the more permissive sense of work in any place-work from anywhere (WFA), in the way of provision through telework, at least in the IT industry, but also in other fields where the activity allows the development of work through technology, more precisely through information and communication technology.


[1] https://hbr.org/2020/11/our-work-from-anywhere-future 
[2] Emergency Ordinance no. 36/2021 on the use of the advanced electronic signature or the qualified electronic signature, accompanied by the electronic time stamp or the qualified electronic time stamp and the qualified electronic seal of the employer in the field of labor relations, and for amending and supplementing some normative acts
[3] Art. 21 – (4) The proof of the training provided in art. 20 may be made in electronic format or on paper depending on the method chosen by the employer, established by the internal regulations.
(5) In case of using the method of electronic format provided in par. (4), the proof of training must be signed with an advanced electronic signature or qualified electronic signature accompanied by the electronic time stamp or the qualified electronic time stamp and the qualified electronic seal of the employer.
[4] Article 60. – Exemptions
The following taxpayers are exempt from paying income tax: (…)
2. natural persons, for the incomes realized from salaries and assimilated to the salaries provided in art. 76 para. (1) – (3), as a result of the activity of creating computer programs, under the conditions established by joint order of the Minister of Communications and Information Society, the Minister of Labor and Social Justice, the Minister of National Education and the Minister of Public Finance;
[5] Law no. 346/2002 on insurance for accidents at work and occupational diseases,
Art. 22. – (1) The insured have the right to medical services corresponding to injuries and illnesses caused by work accidents or occupational diseases, as follows:
a) emergency medical assistance at the scene of the accident, in specialized means of transport and in hospital units, as well as the related transport; 01/01/2018 – the letter was amended by Emergency Ordinance 103/2017
b) outpatient medical treatment, medical tests and medications, prescribed by a doctor;
c) medical services in hospitals or specialized clinics for occupational diseases;
d) treatment for recovery of work capacity in specialized units;
e) reparative surgery services;
f) balneoclimateric treatments;
g) specialized investigations and laboratory analyzes, necessary in order to establish the professional character of the diseases. (…)
(3) The funds necessary for the settlement of the benefits and services provided in par. (2) shall be borne by the state budget through the budget of the Ministry of Labor, Family, Social Protection and the Elderly.
[6] https://www.ilo.org/wcmsp5/groups/public/—europe/—ro-geneva/—sro-budapest/documents/instructionalmaterial/wcms_765782.pdf
[7] Art. 222. – (1) The following are insured, according to the present law:
(2) In the case of the persons provided in par. (1) which falls into the category of those who realize the incomes provided in art. 155 para. (1) lit. a) of Law no. 227/2015, with subsequent amendments and completions, the quality of insured in the social health insurance system and the right to the basic package is granted from the date of commencement of employment / service relations.
[8] Law no. 551/2002 for the ratification of the Agreement between Romania and the Republic of Turkey in the field of social security, signed in Ankara on 6 July 1999. In force since 29 October 2002
[9] Law no. 346/2002 – Art. 7. -01/01/2018 – Art. 7. – was amended by Emergency Ordinance 103/2017
(1) The provisions of art. 5 are also applicable to Romanian employees who work abroad at the disposal of Romanian employers, in accordance with the law and European Regulations or international agreements on the coordination of social security systems, as appropriate.
[10] Art. 327. – The European card contains the following mandatory set of visible information: […]
Art. 328. – (1) The European card is issued to the insured by the health insurance house where he is insured. […]
(6) In case exceptional circumstances prevent the issuance of the European card, the health insurance company will issue a provisional replacement certificate with a validity period established according to art. 330. […]
Art. 329. – The European card is issued only in case of travel of the insured for temporary stay in an EU member state. […] The European card and its replacement certificate shall entitle the holder to the same medical services.
Art. 330. – The validity period of the European card is 2 years from the date of issue.
Art. 331. – (1) The European card can be used by the insured persons from the Romanian social health insurance system only on the territory of the EU member states. […]
Art. 333. – (1) The European card confers the right for the insured to benefit from the necessary medical assistance during a temporary stay in an EU member state.
(2) The expenses occasioned by the medical assistance provided in par. (1) will be reimbursed by the health insurance company issuing the card, through CNAS.
(3) The medical assistance provided in par. (1) must not exceed what is medically necessary during the temporary stay. […]
Art. 334. – The European card is issued individually for each insured person who requests it.
Art. 335. – The European card does not cover the situation in which the insured person travels to an EU member state in order to benefit from medical treatment.
[11] Article 6 Right of residence for a period not exceeding three months
1. Citizens of the Union shall have the right to reside in the territory of another Member State for a period not exceeding three months without any other condition or formality other than the requirement to hold a valid identity card or passport.
2. The provisions of paragraph 1 shall also apply to family members who hold a valid passport, who are not nationals of a Member State and who accompany or join the citizen of the Union.
[12] (9) Citizens of the Union should have the right to reside in the host Member State for a period not exceeding three months, subject to no conditions or formalities other than the requirement to hold a valid identity card or passport. without prejudice to more favourable treatment of jobseekers, according to the case law of the Court of Justice.
(10) At the same time, persons exercising their right of residence should not become an excessive burden on the social assistance system of the host Member State during an initial period of residence. Therefore, the right of residence for citizens of the Union and their family members should be subject to certain conditions if the periods of stay exceed three months.
(11) The fundamental and personal right of residence in another Member State is conferred directly by the Treaty on citizens of the Union and does not depend on the fulfilment of certain administrative procedures.
(12) In the case of periods of stay exceeding three months, Member States should be able to require citizens of the Union to register with the competent authorities of the place of residence, as evidenced by a certificate of registration issued for that purpose.
(13) The obligation to have a residence permit should be limited to family members of citizens of the Union who are not nationals of a Member State, in the case of periods of residence exceeding three months.
[13] 28. resident natural person – any natural person who meets at least one of the following conditions:
c) is present in Romania for a period or more periods exceeding a total of 183 days, during any interval of 12 consecutive months, which ends in the calendar year concerned;
[14] Art. 59. – The scope of the tax […]
(4) The non-resident natural person who fulfilled during the stay in Romania the conditions of residence according to art. 7 pt. 28 lit. b) or c) will be considered resident in Romania until the date on which the natural person leaves Romania. This person has the obligation to complete and submit to the competent authority in Romania the form provided in art. 230 para. (7), 30 days before leaving Romania for a period or more periods of stay abroad exceeding a total of 183 days, during any interval of 12 consecutive months, and will no longer prove the change of tax residence in -another state.
[15] Art. 59. – The scope of the tax
(5) The Romanian resident natural person, domiciled in Romania, who proves the change of residence in a state with which Romania has concluded an agreement to avoid double taxation, is still obliged to pay income tax from any source, both in Romania , as well as from outside Romania, until the date of the change of residence. This person has the obligation to complete and submit to the competent authority in Romania the form provided in art. 230 para. (7), 30 days before leaving Romania for a period or more periods of stay abroad exceeding a total of 183 days, during any interval of 12 consecutive months, and will prove the change of tax residence in a another state.
(7) The Romanian resident natural person, domiciled in Romania, who proves the change of residence in a state with which Romania has not concluded a double taxation agreement is still obliged to pay income tax from any source, both in Romania , as well as from outside Romania, for the calendar year in which the change of residence takes place, as well as in the next 3 calendar years. This person has the obligation to complete and submit to the competent authority in Romania the form provided in art. 230 para. (7), 30 days before leaving Romania for a period or more periods of stay abroad exceeding a total of 183 days, during any interval of 12 consecutive months.
[16] https://tulsaremote.com/
[17] https://www.hotnews.ro/stiri-coronavirus-24828836-cum-vrea-croatia-atraga-nomazi-digitali-din-toate-tarile-solutia-pentru-imbina-telemunca-salvarea-industriei-turistice.htm-
[18]  Labor Code – Art. 49. – (1) The suspension of the individual employment contract may occur by law, by the agreement of the parties or by the unilateral act of one of the parties.
(2) The suspension of the individual employment contract has the effect of suspending the performance of work by the employee and the payment of salary rights by the employer.
(3) During the suspension, there may continue to be other rights and obligations of the parties than those provided in par. (2), if they are provided by special laws, by the applicable collective labor contract, by individual employment contracts or by internal regulations.


Cristina Ticu Jianu
Diana Gaitan

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