Stricter EU Rules Ahead for Posted Workers

Stricter Conditions for Posting

The basic principle remains unchanged. Subject to certain conditions, an employee temporarily posted to another Member State may continue to be covered by the social security system of the home Member State, provided that the anticipated duration of the posting does not exceed 24 months. The rules on replacing posted workers are also being clarified – where a posted employee is replaced by another person, the total duration of work performed by all employees posted in this way in the Member State concerned may not exceed 24 months.

Under the new rules, an employee who is to be posted abroad will have to have been subject to the social security system of the Member State in which the employer is established for at least three months.

A two-month break following the maximum posting period is already applied in practice under the existing interpretative rules. The amendment will now expressly incorporate this requirement into the legislation: once the 24-month period has been reached, a new posting of the same person to the same Member State will generally only be possible after a break of at least two months.

A1 Certificates Will Need to Be Addressed Before Departure

One of the key changes for employers is the tightening of the rules concerning A1 certificates. Cross-border work will have to be notified to the competent institution in advance, and an application for an A1 certificate will have to be submitted before the posting begins.

If an A1 certificate cannot be issued immediately, the competent institution will automatically issue an acknowledgement of receipt of the application.

Exceptions will apply to certain defined business trips, such as business meetings, conferences and training, but not to the provision of services or delivery of goods. A further exception will apply to very short activities lasting no more than three consecutive working days within a 30-day period, although this exception will not apply to the construction sector.

For employers, this means ensuring that the actual work performed is consistent with the information provided in the application and maintaining accurate records of business trips and other short-term activities abroad. In practice, it will therefore be necessary to distinguish correctly between business trips, short-term activities and postings, and to comply with the relevant obligations in a timely manner.

Greater Emphasis on Compliance and Controls

The new rules also strengthen cooperation between the institutions of individual Member States and their ability to verify issued documents. Where doubts arise regarding the validity of an A1 certificate or the information on the basis of which it was issued, a formal review procedure may be initiated. If an error or fraud is identified, the certificate may be corrected or withdrawn, including with retroactive effect.

For employers, simply obtaining an A1 certificate will therefore not be sufficient. The declared circumstances must correspond to where and under what conditions the employee actually works. Proper record-keeping of cross-border work activities will consequently become even more important.

Cross-border cooperation between institutions is also being supported by the ongoing digitalization of social security coordination and the electronic exchange of information through EESSI. In parallel, the ESSPASS project continues to develop, focusing, among other things, on the electronic issuance and cross-border verification of A1 certificates.

Preparing for the New Rules

The legislative process has not yet been completed, and the new rules concerning posted workers will only start to apply after a two-year transitional period. Employers therefore still have time to review their internal policies for business travel and employee postings, their processes for obtaining A1 certificates, and their systems for recording work performed abroad.

Assessing individual cases correctly can be particularly challenging in the case of short-term and recurring cross-border activities. We will be happy to review your current arrangements, assess specific cases and help you prepare your internal processes for the new rules.

If you have any questions regarding the posting of employees or the coordination of social security systems, please do not hesitate to contact us.

Authors:

Gabriela Ivanco, Manager, Tax Department

Anna Klímová, Newsletter Editor