Workers travelling from one EU member state, the UK, Iceland, Norway, Liechtenstein or Switzerland and "posted" to another of those countries on a temporary basis need to carry an A1 Certificate. The obligation covers any economic activity, even if only for a short duration.
Why do employees need an A1 certificate?
In principle, all employees are covered by social security in the country where they work, unless they can show that they are covered by social security in their “home” country. To prove this, employees should have an A1 certificate. This document proves a traveller is subject to the social security rules of their home country and hence does not have to pay social security to a country they are working in temporarily.
The regulations (EC) No. 883/2004 and 987/2009 do not provide for any de minimis or any exceptions for business trips.
Inspections in several EU countries can be strict and can lead to a stressful situation for an employee and further consequences for the employee and employer if they are non-compliant.
The European Commission published a guide on the posting of workers in 2019. The document aimed to assist workers, employers and national authorities in understanding the rules on the posting of workers, as revised with the adoption of Directive 2014/67/EU and Directive 2018/957/EU. The guide confirmed that workers sent temporarily to work in another member state who “do not provide services” are not posted, workers. However, this applied to the administrative requirements and control measures set out in Article 9 of the Posted Workers Directive only and not to social security.
The guidance reiterated that, for social security purposes “every crossborder work-related activity (including 'business trips') the employer, or any self-employed person concerned, is under the obligation to notify the competent (home) Member State, whenever possible in advance, and obtain a portable document A1." And also “that obligation covers any economic activity, even if only of short duration. These regulations do not provide for any exceptions for business trips either”.
The guide provided that formalities regarding business trips were to be discussed under the revision of the EU Social Security Coordination rules. However, as it stands, an A1 certificate is required for a business trip as short as one day. This requirement has been confirmed by the International Postings Section of the Department of Social Protection.
Currently, the A1 certificate may have to be presented on any cross-border business trip including travel to trade fairs, business dinners, training events or meetings with colleagues from other company branches.
Employers should perform a review to determine if their company complies with the EU legislation in this area and assess the risks of non-compliance.
What are the risks of non-compliance?
- Fines on the employer or the company that hosts the employee (In Austria and in Luxembourg the penalties can be up to €10,000)
- Difficulties for employees trying to access their rights (e.g. health care)
- Reputational damage to the company
- Social security contributions will potentially be payable in both the home country and the host country.
Social security applications
If, as an employer, you answer “yes” to either of the following questions, the employee will likely require an A1 Certificate while working in the EEA or, for business travel within the EEA.
- Do your employees work abroad for any period of time?
- Do you have employees of an overseas company working on your premises?
Our Employment Tax & Global Mobility Services team in Mazars, Dublin can advise on and assist employers with, their social security requirements and applications for their employees on short term business travel or longer-term assignments, whether within the EEA or outside of the EEA.
If you have any questions in relation to the above, or if you would like to discuss this topic further, please contact a member of the Mazars team below: