Since 7 April 2023, new provisions of the Labor Code on remote work have been in force. They impose specific duties on both employers and employees. Employers are primarily responsible for covering the costs of remote work and providing tools. Employees, in turn, must follow the rules set out in the remote work policy. Below is a full overview of what each party must provide, agree and implement, with duties separated by role.
Who should read this article?
If you employ people under employment contracts and allow or plan to allow remote work, this article applies to your company. It also applies if you work remotely as an employee and want to know what you may require from your employer.
Employer responsibilities for remote work
The Labor Code requires employers to cover the costs of remote work. The rules allow two ways to meet this obligation, depending on what the parties agree, for example in an agreement on remote work.
Model 1: The employer provides tools and infrastructure
Under this model, the employer directly provides the employee with:
- installation of work tools, including technical equipment needed for remote work,
- service and maintenance of those tools,
- consumable materials needed to perform the work.
Model 2: The employer covers costs or pays a cash equivalent
Under this model, the employee uses their own tools and materials, and the employer:
- covers necessary costs connected with installing, servicing, using and maintaining work tools,
- or pays a cash equivalent instead of covering those costs.
The amount of the cash equivalent is agreed individually with the employee.
When a lump sum may be used
You may use a lump sum instead of a cash equivalent if you agree with the employee that they will themselves provide:
- materials and tools for remote work,
- their installation, servicing, use and maintenance.
How to calculate a lump sum or cash equivalent
When calculating a lump sum or cash equivalent, take the following into account:
- Materials used: the type and quantity of consumable materials.
- Work tools: the degree of wear on the employee’s privately owned equipment.
- Documented market prices: current market prices for tools and materials.
- Electricity consumption standards: the actual electricity costs incurred by the employee in connection with remote work.
Tax treatment of the cash equivalent and lump sum
Covering costs of remote work, whether by paying a cash equivalent or a lump sum, does not constitute income within the meaning of the Personal Income Tax Act. This means no advance payment of PIT is due, and no ZUS contributions are payable on these amounts.
Employee responsibilities for remote work
The employee’s responsibilities should be set out in detail in the remote work policy or in an individual agreement with the employer.
An employee working remotely is required in particular to:
- Follow occupational health and safety rules: comply with arrangements on health and safety at the place where remote work is performed.
- Organize the workspace: ensure that the conditions at the workplace and the technical setup meet the employer’s requirements.
- Protect data and confidential information: follow the employer’s procedures for personal data protection and confidential information.
- Confirm presence and availability: follow the agreed arrangements for contact and confirming that work is being performed.
- Take care of entrusted tools: use tools and materials provided by the employer properly.
Employer checklist: what to implement
If you plan to introduce remote work or already use it, check that you have prepared:
- a remote work policy or an agreement with the trade unions,
- individual agreements with employees on remote work conditions,
- an agreed cost coverage model, with tools provided by the employer, a cash equivalent or a lump sum,
- the amount of the lump sum or cash equivalent and its calculation method,
- personal data protection procedures for remote work,
- health and safety rules adapted to remote work,
- an employee statement confirming that they have read the health and safety and data protection rules.
Choosing a model
- If your company provides equipment to all employees: choose Model 1, where the employer supplies the tools. This gives you full control over infrastructure and data security.
- If employees use their own equipment: choose Model 2 with a cash equivalent or lump sum. Set the amount using actual costs and document the calculation.
- If you want simpler accounting: a lump sum is simpler to administer than a cash equivalent, but it must be agreed with the employee and supported by a documented calculation basis.
Summary
Remote work requires both parties to the employment relationship to meet specific duties under the Labor Code. As an employer, you must primarily regulate costs, tools and health and safety rules. As an employee, you must follow the arrangements on work organization, data protection and care of the equipment entrusted to you.
The key point is not to leave these matters without formal arrangements. Without a remote work policy or an agreement on costs, you risk a dispute with the employee and a retroactive claim for a cash equivalent.
Frequently asked questions
Must an employer cover the costs of remote work under the Labor Code changes? Yes. The Labor Code requires employers to cover costs of remote work. They can do this in two ways: provide tools, service and consumable materials directly, or cover costs incurred by the employee or pay a cash equivalent. If costs are not arranged, a dispute and a retroactive claim for a cash equivalent may follow.
What is the difference between a cash equivalent and a lump sum for remote work? You pay a cash equivalent when the employee uses their own tools and you cover the actual costs of installing, servicing, using and maintaining them. You use a lump sum when you agree that the employee will provide the materials and tools and handle their installation, service, use and maintenance. A lump sum is simpler to account for, but it must be agreed with the employee and have a documented calculation basis.
How should an employer calculate a lump sum or cash equivalent for remote work? Take four elements into account: the type and quantity of consumable materials, the degree of wear on the employee’s privately owned equipment, documented market prices for tools and materials, and the actual electricity costs the employee incurs in connection with remote work. Set the amount using these data and document the calculation method. This is your protection in the event of a dispute or inspection.
Are a cash equivalent or lump sum for remote work subject to tax and social security contributions? No. Neither a cash equivalent nor a lump sum for remote work constitutes income within the meaning of the Personal Income Tax Act. No advance payment of PIT is due, and no ZUS contributions are payable on these amounts.
What documents and procedures should a company implement to introduce remote work? Prepare a remote work policy or an agreement with the trade unions, individual agreements with employees, an agreed cost coverage model and a documented calculation for the lump sum or cash equivalent, personal data protection procedures, health and safety rules adapted to remote work, and an employee statement confirming that they have read the health and safety and data protection rules. Without these documents, you risk a dispute with the employee and a retroactive claim for a cash equivalent.
