Goodwin Insights August 01, 2022

Luxembourg AIFMs — Post-Pandemic Teleworking Practices

The COVID-19 agreements regarding taxation and social security legislation for cross-border workers working remotely enacted by Luxembourg with Belgium, Germany and France ended on 30 June 2022.

What is the legal framework from the 1st of July 2022?

From the 1st of July 2022, teleworking for alternative investment fund managers (“AIFMs”) is regulated by the following : 

  • The convention on teleworking of 20 October 2020, declared a general obligation under the Grand-ducal Regulation of 22 January 2021; 
  • The Luxembourg Labor Code’s teleworking provisions; and
  • The circular of the Commission de Surveillance du Secteur Financier (the “CSSF”) 21/769 (the “Circular”) amended by the circular CSSF 22/804 for entities supervised by the CSSF.

Furthermore, teleworking days linked to the COVID-19 crisis will not be taken into account for the determination of the social security legislation applicable to cross-border workers until 31 December 2022.

How to telework in practice?

The conditions provided by the Circular for teleworking of AIFMs from the 1st of July 2022 are the following:

  • The maintaining of a strong central administration (“decision-making center”) and sufficient substance in Luxembourg;
  • A teleworking policy setting the framework and the limits under which remote work is allowed and ensuring that the regular operational functioning of AIFMs is not jeopardized (i.e. baseline requirements: number of workers who may work remotely and the minimum number of workers required to work at the same time in the AIFM premises in Luxembourg, working duration, etc.);
  • A teleworking security policy to secure the privacy, availability and integrity of entity’s data and information and communication technology (ICT) systems when workers are teleworking;
  • The conclusion of mutual agreements with the workers who telework; and
  • The compliance with all other legal provisions (labor and tax law, as well as company law, professional secrecy, and social security requirements).

The CSSF will monitor the compliance of the teleworking practice with the Circular. Given the oversight, it is thus recommended that AIFMs monitor and maintain a record of compliance with the telework policy.

Feel free to get in touch with us for any further information. 

Esbelta de Freitas and Jessica Laglasse were contributing authors to this Insights post.