EU
Posted
workers
Unemployment insurance for posted workers within EU
Social security coordination of posted workers is regulated in Article 12 of the EU regulation 883/2004.
What is a posted worker?
A "posted worker" is an employee who is sent by his employer to another EU country on a temporary basis:
- with the purpose of providing services to a business partner with whom the employer have a contract, or
- to work in a business which the employer owns in another EU country
Article 12 says that an employee or a self-employed professional can work temporarily as a posted worker in another EU country but remain covered by the social security system (including unemployment insurance) of the country where they worked before the posting (which most often is their home Member State).
Requirements for using Article 12
- the duration of such work does not exceed twenty-four months, and
- the posted person is not sent to replace another person, and
- the employer normally carries out its activities in the Member State from which the person is posted (this means that the employer must have a significant part of its business in the country), and
- the posted person performs work on the employer’s behalf during the posting period. This means that the employer/employee (chain of command) relationship must be maintained during the posting.
Must not replace another person
In Case C-527/16, Alpenrind and Others CJEU interpret the condition "not sent to replace another person" as meaning that "a worker cannot be replaced immediately by another newly posted worker, regardless of which undertaking or Member State from which the newly posted worker originates".
If that happens the posted person can not rely on the coordination rule in Article 12, and thus can not retain to be covered by social security in his/her home country, but must be covered in the country of work.
Keep social security coverage in your home country
As a posted worker, to continue to be covered by the social security system in your home country, your employer must request a Portable Document A1 (PD A1 form) from the social security institution in your home country and inform the host country´s authorities.
The PD A1 form is issued for a maximum period of 24 months.
You do not need to register with the social security authorities in the country where you have been posted, since you remain insured in your home country (where you are normally employed), and your employer has to pay social security contributions there.
If your home country has voluntary unemployment insurance (Denmark, Sweden and Finland) you must keep your membership during your posting.
You do not accumulate any additional social security rights such as pension rights or the right to unemployment benefits in the country where you have been posted.
Postings longer than 24 months
As your PD A1 form is valid for only 24 months, if your posting to another EU country lasts longer, you can either:
- switch to the social security system of your host country and pay contributions there or
- apply for an extension of your social security cover and remain covered in your home country
A social security cover extension is granted if a mutual agreement between the countries involved in your posting is reached and if the extension is in your interest. To request an extension, you and your employer must contact the competent authority that issued your PD A1 before it expires.
After the posting
When you return to your usual country of work you will be covered by the social security system there. You can be posted to another country but only after a certain period of time has elapsed since your return to your home country (two months is considered sufficient by many EU countries).
Self-employed
If you are self-employed, you must inform the social security institution in your host country in advance, and request a PD A1 form from the social security institution in your home country. To be eligible for the PD A1 form, you have to prove that the activities you intend to pursue abroad are similar to those you pursued in your home country. To meet this requirement, you must:
- have worked as a self-employed person in your home country. The time period required varies from one EU country to another, but it can be as little as two months.
- fulfil the requirements to continue working as a self-employed person upon your return to your home country.
Specific cases - are they posting?
Staff from a temporary or placement agency
Posting rules also apply when a temporary or placement agency sends workers to work in another EU country.
In this case the employment relationship is between the worker and the temporary or placement agency.
Business trips
According to the Posting of Workers Directive (Directive 96/71/EC) posting requires:
"the provision of services in the form either of performance of work by an undertaking on its account and under its direction, under a contract concluded between that undertaking and the party for whom the services are intended, or of the hiring-out of workers for use by an undertaking in the framework of a public or a private contract "
Hence, according to Directive 96/71/EC if workers are sent to another EU country on a business trip to attend conferences, meetings, fairs, training, etc, these workers are not posted workers. Such business trips do not fall under the rules for posted workers, since in this context workers do not provide a service in the host country.
However, posting is not defined in the Social security Regulation 883/2004, and the Regulation doesn’t state for how short periods of work abroad the certificate is required.
Some argue that "posting" in Regulation 883/2004 has a broader scope compared to Directive 96/71/EC - and that it include all situations where an employee is sent to another member state to do work (including business trips) for the employer.
Whether the country of work requires the A1 certificate in case of business trips varies.
Until the uncertainty about business trips is probably cleared in a coming revision of Regulation 883/2004 the employer must still inform the host country’s administration whenever possible in advance, and request the PD A1 form.
It should not be needed to apply for an A1 certificate for each separate business trip. Depending on the responsible country/authority, a more permanent A1 certificate may be applied for for persons who often goes abroad on business trips.
Drivers in the road transport sector
Directive (EU) 2020/1057 lays down specific rules for posting drivers in the road transport sector, and defines when drivers are considered as posted and when they are not. See factsheet from the European Commission.
Workers providing on-board services on international trains
The Dobersberger judgment (C-16/18) involved workers domiciled in Hungary working for a hungarian company (Henry am Zug) who provided services on a train (from Budapest to Munich and back) belonging to Österreichische Bundesbahnen. Henry am Zug had subcontracted with an austrian company to provide the on-board services for the passengers.
CJEU stated that the services provided when the train was in Austrian and German territory (before it returned to Budapest/Hungary) was of "very limited" scope, hence there was not a sufficient connection with that territory. As a result the workers could not be regarded as posted to Austria.
Posting of third country nationals
Regulation (EU) No 1231/2010 extends the coordination rules for social security laid down in Regulations (EC) No 883/2004 and 987/2009 to third-country nationals legally resident in the EU and in a cross-border situation.
This means that if a third country national resides and works legally in an EU Member State, the employer may post that worker to another Member State under the same conditions as an EU citizen.
However Denmark has an "opt-out" according to note 19 in Regulation 1231/2010 which means that companies in the EU cannot apply the EU regulations on social security to third-country nationals moving to and from Denmark.
Third-country-national workers posted to Denmark from a company established in another EU Member State are thus covered by the social security system in the country in which the employer is established.
Regulation 1231/2010 can also not be used by third country nationals in EFTA countries (Iceland, Liechtenstein, Norway and Switzerland), due to the fact that it has not been incorporated in the EEA-Agreement.
No work permit required for third-country nationals
In the case "Raymond Vander Elst v Office des Migrations Internationales", the CJEU ruled that Member States are precluded from requiring a work permit for third-country nationals posted by an undertaking established in another Member State where they are lawfully and habitually employed.
However in the majority of the EU countries third-country nationals still needs a temporary residence permit.
Source: European Union.
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- Social security coordination →
Posted workers
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Key points of EU Unemployment Insurance coordination
- Transferring periods of work and insurance between EEA countries As an EU citizen you can transfer acquired rights from Unemployment Insurance when moving between EU/EEA contries. In this way it may be easier to become entitled to unemployment benefit in the country you move to.
In the vast majority of the Member states the aggregation rule become fully applicable as soon as you starts to work in the country. However in Denmark, Belgium and Finland you must work some period there before you can use the aggregation rule.
You need a PD U1 document in the country you leave or if the involved countries use electronically exhange (EESSI) there will be issued a SED U002. The countries who issues the highest number of PD U1 documents are Germany, Austria, Switzerland and the Netherlands. The countries who receives most PD U1 documents are Lithuania and Italy. - Transferring unemployment benefits Under certain conditions you can go to another EU country to look for work and continue to receive your unemployment benefits from the country where you became unemployed. The period you can export your unemployment benefits varies from 3 to 6 months in the different Member states.
You have to apply for a PD U2 document in the country you leave, or if you haven't done that the institution in the receiving country must request a SED U008 from the competent institution in your last country.
The countries who issues the highest number of PD U2 documents are Germany, Switzerland, the Netherlands and Denmark. Poland is the country who receives by far most PD U2 documents. - Unemployment benefits coverage According to OECD the net replacement of income after 2 months of unemployment, for a single person without children whose previous in-work earnings were 67% of the average wage varies from 33 percent (Ireland) to 91 percent (Belgium). Read more here..
- Having residence in another EU country than where you work? According to EU social security coordination rules you must only be insured against unemployment in one country at a time. As a generel rule this country is where you work.
In Member states who have compulsory insurance, you will automatically be covered when you start working there.
However you may be insured by your country of residence if you are posted to a EU/EEA country or work in two or more EU/EEA countries at a time. In these situations you can not your self decide where to have unemployment Insurance, but you (or your employer) must apply for a PD A1 document which states in which country you are covered by social security, including Unemployment Insurance. Special rule also apply for cross-border workers ("frontier workers"). - Third-country Nationals working in EU/EEANON-EEA citizens are covered by Unemployment Insurance in the EU countries who have compulsory Unemployment Insurance. In countries with voluntary Unemployment Insurance (Denmark, Sweden and Finland) third-country nationals can become member of an Unemployment Insurance Fund.
In the most countries Third-country nationals can also use the EU Coordination rules when moving within EU/EEA (however not in Denmark, Iceland, Liechtenstein, Norway and Switzerland).
Third-country nationals in short-tem working relations often faces problems with actually get Unemployment benefits, even though they have contributed to the system. This is due to the fact that one normally need a residence permit which allow one to take any job, and also because of a qualifying period in most countries between 6-12 months.