<h3>1. Introduction</h3>
<p>The global COVID-19 pandemic has given a real boost to remote working and, in particular, to  the working from home model. Even though the pandemic is slowly coming to an end,  working from home has remained and become an integral part of modern working life. When employees no longer work 100% on-site at the Swiss company, questions arise in cross-border situations regarding labor law, tax law and social security law.</p>
<p>On December 22, 2022, Switzerland and France enacted new agreements regarding the taxation of French residents employed by Swiss companies that work remotely and in particular work from home. On January 1, 2023, the new agreements came into force. Under the new agreements, French residents working for Swiss employers may work from home up to 40 percent of the time each calendar year without affecting their current tax status. The tax status of employees still varies from canton to canton.</p>
<p>Working 40 percent of the time in France does not currently subject workers to French social security obligations, however, because of temporary EU accommodations in place until June 30, 2023 to account for remote work.</p>
<p>The new  work-from-home agreements update the tax regulations in light of the increase in remote working.</p>
<h3>2. Tax and Social Security Regime relating to Home Office for French Residents</h3>
<p>Generally, whether income from employment French resident cross-border commuters earn from their Swiss employer is subject to Swiss wage tax withholding depends on the canton in which the employer is situated.</p>
<p>As a result of the agreements entered into between Switzerland and France on December 22, 2022, which apply since January 1, 2023, employers need to take an additional factor into consideration when determining the applicable tax rules. Namely, the deduction of Swiss wage tax withholding on such income depends on the worktime the employee spends working from home in France. In contrast to tax law, the employee&#8217;s social security status generally depends on whether the work is carried out in Switzerland or France and the work time spent in either of these states (the canton where the employer is situated is of no relevance).</p>
<h3>3. Income tax</h3>
<h4>3.1     Employers situated in the cantons of Bern, Solothurn, Basel-Stadt, Basel-Land, Vaud, Valais, Neuchâtel and Jura</h4>
<p>Income from employment earned by a French resident cross-border commuter who is employed by a Swiss employer situated in any of these eight Swiss cantons is not subject to Swiss wage tax withholding. Rather, such income may only be taxed by France i.e. the country of residence of the employee. France compensates Switzerland financially with 4.5% of the total annual gross remuneration earned by the French cross-border workers.</p>
<p>Pursuant to the agreement signed by Switzerland and France on December 22, 2022, French workers commuting daily between France and these eight Swiss cantons can perform up to 40% of their work from their French home without jeopardizing their cross-border status or impacting the right of France to tax their income. The 40% of work conducted in their French home office is computed on an annual basis (January to December).</p>
<p>Without this new agreement, cross-border workers working from their French home office would have lost their cross-border worker status for tax purposes and would, as a rule, have been taxed on their employment income at their place of work in Switzerland and become subject to Swiss wage tax withholding. If they worked in both Switzerland (e.g. 60%) and France (e.g. 40%), Switzerland would have, generally speaking, levied withholding taxes on the part of the income for work physically conducted in Switzerland (e.g. on 60%).</p>
<h4>3.2       Employers situated in other Swiss cantons</h4>
<p>Income from employment earned by a French resident cross-border commuter who is employed by a Swiss employer situated in any Swiss canton with the exception of one of the eight cantons listed in 4.1. above is subject to Swiss wage tax withholding to the extent that the employment is physically conducted in Switzerland and the respective canton, respectively. Generally, a French resident border commuter who physically conducts 40% of the employment in France and the other 60% in Switzerland is subject to Swiss wage tax withholding on 60% of the employment income.</p>
<p>Pursuant to the new agreement signed by Switzerland and France on December 22, 2022, cross-border commuters between France and any Swiss canton with the exception of one of the eight cantons, can perform up to 40% of their work from their French home without jeopardizing their cross-border status, nor impacting the right of Switzerland to tax 100% or their employment income (i.e. the employee is deemed to perform 100% of the work physically in Switzerland). Similar to the agreement reached with respect to the eight Swiss cantons, the 40% of work conducted in the French home office is computed on an annual basis (January to December).</p>
<h3>4. Social security</h3>
<p>Generally, an EU or EFTA (or Swiss) national who is a resident of France and who is employed by a Swiss employer and who normally pursues employment in Switzerland and France is subject to the Swiss social security system, unless the employee pursues at least 25% of the employment in France. Therefore, an employee who pursues 40% of the employment in the French home office and 60% on site at the company in Switzerland is subject to the French social security system on 100% of the income.</p>
<p>Taking into account that telework has now become established throughout Europe, the members of the EU Administrative Commission for the Coordination of National Social Security Systems agreed on June 14, 2022 to extend the flexible application of the rules on the coordination of social security introduced during the covid pandemic during a transitional phase until December 31, 2022. This deadline was extended again in mid-November until June 30, 2023. The flexible application of the subordination rules is also extended accordingly within the framework of the agreement on the free movement of persons with the EU and the EFTA Convention and applies to Switzerland.</p>
<p>Consequently, until June 30, 2023, a French cross-border worker conducting work in the French home office continues to be subject to the Swiss social security legislation in respect of 100% of the employment income, even if the employee carries out the activity from the French home office of more than 25% of the employment. It may be that, following the expiration of the special regulation on June 30, 2023, the coordination rules will be set or interpreted such that telework exceeding the 25% threshold may be carried out in France without changing the authority of Switzerland to impose social charges, i.e. the French home office worker would continue to be insured in the Swiss social security system.</p>
<h3>5. Employment Law: Working from Home and Equal Treatment</h3>
<p>In light of the above mentioned new agreement between Switzerland and France, and the tax and social security regulations that apply to French-resident employees, Swiss employers may want to treat French-resident cross-border workers differently from Swiss-resident employees regarding home office. The different treatment should assist in avoiding avoid additional administrative burden and financial risks for the employer. The question arises as to whether such unequal treatment is legally permissible.</p>
<p>Under Swiss employment law there is a general obligation to treat all employees equally (<em>see </em>art. 328 Swiss Code of Obligations). However, treating French-resident employees differently from Swiss-resident employees for purposes of working from home does not violate the principle of equal treatment provided (i) that the unequal treatment is objectively reasonable and (ii) the unequal treatment complies with mandatory employment and public labor laws, such as the Equal Treatment Act (<em>Gleichstellungsgesetz</em>). The different legal framework between French and Swiss residents may constitute such an objective reason for unequal treatment of employees. Accordingly, French-resident employees might only be permitted to work less than 25 percent of the time from home (or 40 percent during the temporary extension of the COVID-19 -regime until June 30, 2023), whereas Swiss-resident employees are permitted to work more or all of the time from home. It would also be justifiable in our view to prohibit French-resident employees working from home entirely to avoid any administrative and financial risk. Additionally, and also acceptable from the perspective of equal treatment, it is also possible for the employer to conclude individual agreements with the employees regarding home office (e.g. by means of an addendum to the employment contract).</p>


Coins

New Cross-Border Regulations With France for Work From Home

Gesellschaftsrecht / M&A

Kapitalmarkt

Finanzierungen und Anlageprodukte

Steuern

Arbeitsrecht und Vergütung für Führungskräfte

Dufry_bw

<p>On February 3, 2023, Dufry AG (SIX: DUFN) announced that it successfully closed the transfer of the 50.3% stake in Autogrill S.p.A (XMIL: AGL) held by Edizione S.p.A (through a wholly owned subsidiary) to Dufry.</p>
<p>Dufry will launch a mandatory public exchange offer for the remaining Autogrill shares (excluding treasury shares) at the same terms as Edizione and with a cash alternative of EUR 6.33 per Autogrill share.</p>
<p>Dufry expects to complete the full transaction including the mandatory exchange offer settlement by the end of Q2 2023.</p>
<p>Homburger acts as transaction counsel to Dufry. The Homburger team comprises Andreas Müller, Frank Gerhard, Oliver Kneubühl and Carlo Sulser (all Corporate / M&amp;A; Capital Markets), Jürg Frick, Eduard De Zordi, Alexander Wherlock and Nathalie Scherrer (all Financing and Investment Products / Capital Markets), Dieter Grünblatt and Reto Heuberger (both Tax), and Nicole Hilpert and Angela Casey (Employment and Executive Compensation).</p>


Homburger advises Dufry on the successful closing of its strategic combination with Autogrill

Wettbewerb

Regulierung

phoenix pharma

<p>On October 18, 2022, PHOENIX Pharma Switzerland, a subsidiary of the family-owned PHOENIX group, and Voigt Holding announced that they agreed to establish a 50/50-joint venture to combine their pharmaceutical distribution services and pre-wholesale activities. The closing of the joint venture is subject to the approval by the Swiss Competition Commission.</p>
<p>Homburger advises PHOENIX Pharma Switzerland on the transaction. The Homburger team is led by partner Frank Gerhard (Corporate / M&amp;A) and comprises counsel Andreas Burger (Competition, Regulatory) as well as associates Marc Schamaun, Patrick Schmidt (both Corporate / M&amp;A), Allegra Arnold, Daniel Lütolf (both Competition, Regulatory), Angela Casey, Nicole Hilpert (both Employment and Executive Compensation), and junior associate Nicolas Wetzel (Corporate / M&amp;A).</p>


Homburger advises PHOENIX Pharma Switzerland on its joint venture with Voigt Group

Immobilien

Kimberley Clark

<p>On April 30, 2021, Kimberly-Clark completed the sale of its subsidiary Kimberly-Clark GmbH, including its paper mill in Niederbipp (Canton of Berne) as well as the «Tela» brand, to an entity owned by the Queck family, a German family of entrepreneurs which already owns several paper producers. The entity operating the paper mill has assumed the new name Tela GmbH.</p>
<p>Homburger advised Kimberly-Clark on the transaction. The Homburger team was led by partners Daniel Hasler and Daniel Häusermann (both Corporate / M&amp;A) and included partners Richard Stäuber (Competition) and Stefan Gäumann (Real Estate), counsel Peter Müller (Tax), and associates Stefan Luginbühl (Corporate / M&amp;A), Yves Bianchi (Competition) and Nicole Hilpert (Employment and Executive Compensation).</p>


Nicole
Hilpert

Homburger advises Dufry on the successful closing of its strategic combination with Autogrill

Homburger advises PHOENIX Pharma Switzerland on its joint venture with Voigt Group

Kimberly-Clark closes sale of paper mill in Niederbipp (Switzerland)

New Cross-Border Regulations With France for Work From Home

Employment & Labour Law 2023: Switzerland

Employment & Labour Law 2022: Switzerland

Employment & Labour Law 2021: Switzerland

Join the Team

Nicole Hilpert

Karriere

Sprachen

Zulassung

Teams

NicoleHilpert

Homburger advises Dufry on the successful closing of its strategic combination with Autogrill

Homburger advises PHOENIX Pharma Switzerland on its joint venture with Voigt Group

Kimberly-Clark closes sale of paper mill in Niederbipp (Switzerland)

New Cross-Border Regulations With France for Work From Home

Employment & Labour Law 2023: Switzerland

Employment & Labour Law 2022: Switzerland

Employment & Labour Law 2021: Switzerland

Join the Team

Nicole Hilpert

Karriere

Sprachen

Zulassung

Teams

Nicole
Hilpert