Risks related to cross-border employee business travel
EMEA International Social Security Alert
Increased focus on assigned employees’ business travel
Many international assignees have duties which require them to work outside the country to which they are seconded. As long as these work-related visits to other countries remain occasional, the planned social security compliance position for both employer and employee should remain as originally intended.
However, if their business travel develops into a regular and permanent working pattern, individuals who are on assignment can be recategorised as having simultaneous employment in more than one EEA state. This would be the case if regular business travel to a country exceeds 5% of the employee’s overall working time.
Depending on the employees’ specific working pattern and their contractual arrangements, this could lead to a change of their, and their employer’s social security contribution regime.
Example: A Dutch employee who is on a two year assignment from the Netherlands to France resides with his/her family in Paris. The employee begins to work regularly for 4 days a month in Brussels. Because s/he has now become a ‘multi-state worker’ the applicable social security regime may shift from the Netherlands to France, as France has become – arguably – his/her place of habitual residence. Such a change would be highly significant from a cost and benefit entitlement perspective. Even if the applicable legislation does not change, at the very least a new A1 certificate is needed due to his having taken on a multi-state role.
Further complexities can apply to individuals with multiple contracts, which are often put in place to meet local legislative requirements, and for individuals seconded from non-EEA countries, but with regular business travel within the EEA.
Social security authorities across Europe are increasingly aware of the challenges that short term business travel creates for business, and are increasing their focus on employees’ travel patterns.
Business travel monitoring
Given this increased focus from the authorities and the increasing number of audits in several countries, it is strongly advisable to closely monitor working patterns of employees travelling across borders, whether seconded or home based. A thorough assessment of an employee’s travel calendar provides an indication of whether such travel could be regarded as regular, thereby impacting the applicable social security legislation and/or the relevant administrative formalities. Such assessment can be used to immediately flag and follow up on individual cases where there may be risks.
In addition, our advice is that employers should proactively assess the anticipated working pattern of seconded employees in order to avoid unexpected liabilities and to manage any risks. The host entities involved and the individuals themselves should also be made aware of the risks and reminded of their obligations to monitor such travel.