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Practical guide

Practical Guide: Determining Applicable Law for Workers in

the European Union (EU),

in the European Economic Area (EEA) and in Switzerland

August 2012

PART I: POSTING OF WORKERS

1. What is the social security system for workers posted to other Member States?

2. How is posting of workers defined in specific Community legislation?

3. What criteria are used to determine whether an employer usually works in the “posting state”?

4. When can one speak of a labor law bond between the posting company and the posted worker?

5. What are the rules for workers hired in one Member State for the purpose of posting to another?

6. What happens if an employee is posted to work for several companies?

7. Are there cases where it is absolutely impossible to apply the posting rules?

8. What are the rules for self-employed who work temporarily in another Member State?

9. What criteria are used to determine whether a person is habitually self-employed in a Member State?

10. What does a “similar activity” mean?

11. What are the procedures for posting?

12. Agreements on exemptions from the posting rules

13. When can a new posting be requested after the posting has expired?

14. How are postings that have been approved and started under Regulation 1408/71 treated? Will these periods be on the

24 months taken into account that are permitted under Regulation 883/2004?

15. Suspension or interruption of the posting period

16. Notification of changes during the posting period

17. Obligation to provide information and review of the legality of postings

PART II: EXERCISING AN EMPLOYMENT IN TWO OR MORE MEMBER STATES

1. What social security law applies to people who usually work in two or more Member States?

2. When can it be assumed that a person is usually employed in two or more Member States?

3. How is “essential gainful employment” defined?

4. Substantial employment and employees in international transport

5. Over what period of time should the assessment of substantial employment extend?

6. What should happen if the work schedules or working conditions change?

7. Establishing the registered office or domicile

8. What procedures do people have to follow when working in two or more Member States?

9. How are self-employed persons treated, who are usually self-employed in two or more Member States?

10. When can it be assumed that a person is usually self-employed in two or more Member States?

11. How is the “essential part of self-employment” defined?

12. What procedural rules do self-employed workers have to comply with if they are employed in two or more Member States?

13. What are the criteria for determining where the center of activity is?

14. What is the situation for people who are employed and self-employed in different Member States?

15. Are there special rules for a person who is gainfully employed in several Member States if a decision has already been taken on the applicable legal provisions in accordance with Regulation 1408/71?

16. From what date do the applicable legal provisions apply if a person to whom the transitional agreements apply applies for an assessment under Regulation 883/2004?

introduction

Why this guide?

According to Article 76 of Regulation 883/2004, Member States1 are obliged to inform each other and to facilitate the uniform application of Community law, in particular by promoting the exchange of experience and the dissemination of best administrative practice. This principle is underpinned by the principle of an efficient exchange of information between the institutions and the obligation of citizens and employers to inform them precisely and promptly.

This guide is intended to provide a suitable working tool at the various practical and administrative levels involved in the application of specific Community provisions, to help institutions, employers and citizens to determine the law of which state is applicable.

The regulations at a glance

The guiding principle is that persons to whom this Regulation applies are subject to the legislation of only one Member State.2 In the case of employees and self-employed persons, the legislation of the Member State in which they carry out their activities usually applies. This principle is called lex loci laboris designated. Persons temporarily receiving certain cash benefits as a result of their employment or self-employment are also subject to the legislation of the Member State of their professional activity. For all other persons, the legislation of the Member State of residence applies.

In some very specific cases, however, criteria other than the location of the actual activity may be justified. These cases include the temporary posting of workers to another Member State, the activity of one person in two or more Member States and certain categories of workers, such as: B. Officials.

The rules for determining the Member State whose legislation applies are set out in Articles 11 to 16 of Regulation 883/20043 and the relevant implementing rules are set out in Articles 14 to 21 of Regulation 987/20094 (hereinafter "the Regulations"). These rules are also interpreted in Decision A2 of the Administrative Commission for the Coordination of Social Security Systems (hereinafter referred to as the "Administrative Commission").

This guide has two parts:

  • Part I: Posting of Workers

  • Part II: Carrying out an activity in two or more Member States

PART I: Posting of workers

1. Which social security system applies to other Member States?

posted workers?

Sometimes an employer in one Member State (the “Sending State”) wishes to post an employee to another Member State (the “Employing State” )6. Such workers are known as posted workers. According to the Community regulations, employees who move to and from the European Union are only subject to social security regulations

of a Member State7. According to the regulations, people who move from one Member State to another for work-related reasons are generally subject to the social security system of the new country of employment. In order to promote the free movement of workers as much as possible and to avoid costly administrative complications that are not in the interests of workers, companies and institutions, the current EU legislation provides for some exceptions to this general principle. The most important exception is the provision that the employee must continue to belong to the social security system of the state in which the company usually operates (posting state) if the employee is posted by this company to another member state (employment state) for a period of time, which is limited from the start (maximum 24 months), provided that certain conditions are met, which are discussed in more detail below. These facts that result in an exemption from paying insurance contributions in the country of employment - better known as Posting of workers - are regulated in Article 12 of Regulation 883/2004. The regulations that apply to both employees and the self-employed are described below.

2. How is the posting of workers in the specific

Community legislation defined?

According to the aforementioned provisions of the Regulation, a person who works in a Member State on behalf of an employer, who usually works there, works and who is posted by this employer to another Member State to work there for this employer continue to comply with the legislation of the sending State if the following conditions are met:

  • The expected duration of the posting is no more than 24 months.

and

  • The worker is not posted to another posted person

replace.

The posting rules are intended as a relief for employers who have to use workers temporarily for work in another country (and for employees). Accordingly, they may not be used to provide employees for companies or assignments by repeatedly posting different employees to the same position and for the same purposes. Thus, in addition to the temporary nature of the posting and the fact that it is not intended to replace another posted worker, various important points must be observed: First, the employer in the posting state must usually be active. Second, the rule that the employee “works for the account of an employer” means that for the entire duration of the posting binding under labor law exists between the posting company and the posted worker.

3. What criteria are used to determine whether an employer usually works in the “posting state”?

An employer “who usually works there” is understood to mean a company that has a "NoteworthyBusiness activity“Exercises. If the company's activities are limited to purely internal administrative activities, it is not considered to be an employer who normally works in that Member State. In order to determine whether an employer carries out a significant activity in the territory of the Member State in which he is established, it is necessary to take an overall view of all the activities of that employer. The criteria must be based on the particular characteristics of the company in question and the activities actually carried out

be coordinated. Whether or not there is a significant business activity in the sending state is

verifiable on the basis of a number of objective criteria. The following criteria are of particular importance: It should be noted that this list is notis complete, as the criteria must be coordinated in each individual caseand the type of activity to be taken into account is that the company is in its stateBranch. Under certain circumstances - depending on the specifics of aof each employer and the nature of those exercised in the state in which he is basedActivities - other criteria must also be taken into account:

  • the place where the posting company has its headquarters and administration;

  • Corresponding structure of the workforce of the posting company in the posting state and in the employing state (if the posting state only has administrative staff, it is already excluded that the company falls under the posting regulations);

  • the place where the posted workers will be employed;

  • the place where the majority of contracts with customers are made;

  • the law governing the contracts that the posting company concludes with its employees or with its customers;

  • the number of contracts concluded in the sending state and in the employing state

  • the turnover achieved by the posting company during a sufficiently characteristic period in the posting state and in the employing state. (For example, a turnover of 25% of the total turnover could be a sufficient indication; cases in which the turnover is less than 25% should be subjected to an individual examination) 8;

  • the duration of the establishment of a company in the sending state.

When deciding whether there is any significant business activity in the posting state, the competent institutions must also check whether the employer requesting the posting is also the actual employer of the workers to be posted. This is especially important in situations where an employer uses a combination of permanent and temporary workers.

Example:

Company A from Member State X has a contract for painting work in Member State Y. The work should take two months. In addition to seven permanent employees, company A needs three temporary workers from temporary employment agency B for posting to Member State Y; these temporary workers are already working in company A. Company A demands

Temporary employment agency B to post these three temporary workers together with its own seven employees to Member State Y. Provided all other conditions for posting are met, the law of Member State X continues to apply to temporary workers - just as it does to permanent staff. The employer of the temporary workers is, of course, temporary employment agency B.

4. When can one of a labor law bond between the

posting company and the posted worker

speak?

From an interpretation of the legal provisions and European case law as well as from daily practice, various indications can be derived as to whether a binding under labor law exists between the posting company and the posted worker, in particular:

  • the responsibility for recruiting;

  • the contract must continue for the entire duration of the posting between the same persons according to whose will the employment contract was concluded that led to the recruitment;

  • only the posting company is entitled to terminate the employment contract by giving notice;

  • the posting company must continue to determine the "type" of the work to be carried out by the posted worker, whereby this does not mean the authority to regulate the type of work to be performed and the associated type of work execution down to the smallest detail, but rather the Authority to generally decide which end product is to be manufactured or which service is generally provided;

  • the company that signed the employment contract is responsible for the remuneration. This applies without prejudice to any agreements between the employer in the posting State and the company in the employing State on the form of the actual payments to the employee;

  • the power to impose disciplinary measures remains with the posting company.

Some examples:

a) Company A based in Member State A temporarily posts an employee abroad to work at Company B based in State B. The employee is contractually bound exclusively to company A, from which he is also entitled to remuneration.

Solution: Company A is the employer of the posted worker, as the entitlement to remuneration only applies to company A. This also applies if company B reimburses part or all of the remuneration to company A and deducts it from the tax in Member State B as operating costs.

b) Company A based in Member State A temporarily posts an employee abroad to work for Company B based in State B. The employee still has a contract with company A. They are also entitled to remuneration from company A. However, the employee concludes an additional employment contract with company B and is also paid by company B.

Solution a): The employee has two employers for the duration of his employment in Member State B. If he works exclusively in Member State B, he is subject to the legislation of Member State B in accordance with Article 11 (3) (a) of Regulation 883/2004.

Solution b): If the employee also works in Member State A from time to time, it must be determined in accordance with the provisions of Article 13 (1) of Regulation 883/2004 whether he is subject to the legislation of Member State A or of Member State B.

c) Company A based in Member State A sends an employee abroad for a limited period to work for Company B based in Member State B. The employment contract with company A is suspended for the duration of the employee's activity in Member State B.The employee concludes an employment contract with company B for the duration of his activity in Member State B and receives his remuneration from this company. Solution: There is no posting because a suspended employment relationship does not constitute a sufficient binding under labor law to justify the continued application of the legislation of the posting state. According to Article 11 (3) (a) of Regulation 883/2004, the employee is subject to the legislation of

Member State B. If the legal provisions of Member State B apply, in both cases (Examples 2 and 3), taking into account the fact that the employment in Member State B is limited in time, an exception in accordance with Article 16 of Regulation (EC) No. 883 / 2004 to be agreed if this is in the interests of the employee and a corresponding application has been made. Such an agreement requires the consent of both participating Member States.

5. What rules apply to employees working in a Member State for

Purpose of posting to be hired in another?

The rules on posting of workers may also apply to a person who is recruited with a view to posting to another Member State. However, the regulations require that the worker posted to another Member State is already affiliated to the social security system of the Member State in which, immediately before starting employment

his employer is established 9. A period of one month is considered sufficient to meet this requirement. If it is shorter, a case-by-case examination must take place, taking into account all relevant factors10. Employment with any employer in the sending country fulfills this requirement. It is not necessary that the employee worked for the employer who requested the posting during this period. The requirement is also met for students, pensioners or other persons who are insured due to their place of residence and who belong to the social security system of the sending country. All the regular requirements for posting workers in general also apply to these groups of people. A few examples are intended to make it clear what the concept of joining the social security system “immediately before” the start of work means in individual cases:

a) On June 1, employer A based in Member State A posts inter alia. Workers X, Y and Z go to Member State B for a period of ten months to carry out work on behalf of employer A.

b) Employee X started working for employer A on June 1st. Immediately before starting his employment, he lived in Member State A and was subject to the legislation of Member State A because he was studying there.

c) Employee Y also started working for employer A on June 1st. He lived in Member State A immediately before starting work; he was a frontier worker and as such was subject to the legislation of Member State C.

d) Employee Z, who also started working for employer A on June 1st, has been working in Member State A since May 1st. Because of his employment, he was subject to the legislation of Member State A. However, immediately before May 1st, employee B was subject to an employment relationship for ten years in accordance with the legislation of Member State B.

Solution: One of the conditions for the continued application of the legislation of the posting state is that the worker was subject to the legislation of the posting state on social security immediately prior to the posting. However, it is not necessary that the employee was employed by the posting company immediately before his or her posting. Workers X and Z were subject to the legislation of Member State A immediately before June 1 and thus meet the requirements for continued application of the legislation of the sending country in this regard. However, immediately before June 1, worker Y was subject to the legislation of Member State C. Since he was not subject to the legislation of the posting state immediately before his posting, the legislation of Member State B in which he actually works applies to him in principle.

6. What if a worker is posted to work for several

Company to work?

The fact that a posted worker works for several companies in the country of employment at different times or during the same period does not mean that the posting rules cannot be applied. The decisive factor in this case is that the activity continues to be carried out on behalf of the posting company. As a result, it must always be checked whether there is a legal bond between the posted worker and the posting company and whether it remains in place throughout the period of the posting. If a worker is posted to several Member States in immediate succession, there is always a new posting within the meaning of Article 12 (1). The posting rules do not apply if a person is usually employed in different Member States at the same time. In such cases, the provisions of Article 13 of the Basic Regulation apply.

7. Are there cases where it is absolutely impossible to apply the posting rules?

There are a number of situations in which the community precludes the application of the posting rules.

This is especially true in the following cases:

  • The company to which the employee is posted leaves him / her

another company in the Member State of its establishment.

  • The company to which the employee is posted leaves him / her

another company in another Member State.

  • The employee is hired in a Member State in order to be employed by a

Company established in a second Member State to become a

Company to be posted in a third Member State without the

Requirement for connection to the social security system of the

Sending State is fulfilled.

  • The employee is hired in a Member State by a company

resident in another Member State to take up an activity in the first

Member State to execute.

  • The worker is posted to replace another posted person.

  • The employee has one with the company to which he is posted

Contract concluded.

It is obvious why posting is expressly excluded in these cases: the relationships established by such facts are extremely complex and offer no guarantee of the continuation of the labor law binding between the employee and the posting company; They are also in stark contrast to the fundamental aim of posting rules - to avoid administrative complications and interruptions in the insurance process. Abuse of the posting rules must also be prevented. In exceptional cases it may be possible to replace a person who has already been posted,

if the maximum permissible duration of the posting has not yet been reached. This would be the case, for example, if an employee posted for 20 months falls seriously ill after 10 months and has to be replaced. In this case it would be appropriate to allow another person to be posted for the remaining 10 months of the agreed period.

8. Which provisions apply to self-employed persons who temporarily have a

Work in another Member State?

Sometimes a person who is usually self-employed in one Member State (the “Sending State”) may wish to work in another Member State (the “Employing State”) for a limited period of time. As with posted employees, there would be administrative problems and confusion if a self-employed person who worked for a limited period in another Member State were to be subject to the legislation of the country of employment. It could also affect his entitlement to benefits.

The regulations therefore provide for a special arrangement for self-employed persons who work temporarily in another Member State. It is similar to, but not identical to, the scheme for posted employees. It states that a person who usually one in one Member Stateis self-employed and the one similar Activity in one

other Member State continues to be subject to the legislation of the first Member State, provided that the expected duration of this activity does not exceed 24 months11.

9. What criteria are used to decide whether a person is usually in

is self-employed in a Member State?

The Regulations define a person “who is habitually self-employed in a Member State” as a person who is customarily engaged in significant activities in the territory of the Member State in which he is established. In particular, the person must

  • have worked for some time before moving to another Member State and

  • continue to meet the requirements necessary to carry out their work in the Member State in which they are resident in order to be able to continue their work on their return.

In order to determine whether a person is usually self-employed in the sending country, it is necessary to check whether the above criteria are met. For example, it can be checked whether this person:

  • still has business premises in the sending state;

  • pays taxes in the sending state;

  • still has a VAT number in the sending country;

  • is registered with a chamber of commerce or a professional association in the sending state;

  • holds a professional card in the posting state.

The ordinances stipulate that self-employed persons who would like to take advantage of the posting provisions have “already carried out their work for some time” before the posting. A period of two months is considered sufficient to meet this requirement. If it is shorter, a case-by-case examination must take place12.

10. What does a “similar activity” mean?

In order to determine whether a person is planning to pursue an activity “similar” to that in the sending state in another Member State, the type of activity actually carried out must be taken into account. It does not matter how this activity is classified in the country of employment, i. H. whether it counts as dependent employment or self-employment. In order to decide whether the activity is “similar”, it must be determined in advance, before leaving the sending country, which activity the self-employed person will carry out. He should do this, e.g. B. by submitting appropriate contracts, can prove. In general, self-employment in the same industry is considered a similar activity. However, it must be taken into account that the activities can also be very diverse within an industry and that this general rule may not always be applied.

Examples:

a) A person who usually works as a self-employed carpenter in State X moves to State Y to work as a self-employed butcher there. This would not qualify as a "similar activity" as the activity in State Y bears no resemblance to its activity in State X.

b) B operates a construction company in country X and takes on orders for the laying of pipes and lines. B has signed a contract in country Y for the laying of the line and the repair of the foundation.

c) B can claim the application of the provisions of Article 12 (2) as he / she intends to take up a similar activity, i.e. H. to move to country Y for an activity in the same sector (construction).

d) C is self-employed in state X, which consists of the provision of transport services. C is temporarily going to State Y to carry out a contract to lay the pipes and repair the foundation. Since the activity carried out in country Y is different from the activity carried out in country X (different sectors: X - transport, Y - construction), C cannot claim the application of the provisions of Article 12 (2) of the basic regulation.

e) D is an independent lawyer specializing in criminal law in State X. He is commissioned in State Y to advise a large company on corporate governance issues. He is thus active in a different area, but still works in the area of ​​law and can therefore make use of the posting rules.

11. What are the procedures for posting?

A company that posts an employee to another Member State, or - in the case of a self-employed person - the person himself / herself must contact the competent institution in the posting state. If at all possible, this should be done before the posting. The competent institution in the sending country immediately informs the institution in the country of employment about which legal provisions are to be applied. The competent institution in the posting state must also inform the person concerned or - in the case of an employee - their employer of the conditions under which they are still subject to the legal provisions of the posting state and inform them that compliance with these conditions will be monitored during the posting period can. An employee or self-employed person who is planning to be posted to another Member State, or his employer, receives a form A1 (formerly form E 101) from the responsible institution. This certifies that the employee is subject to the special regulation for posted workers up to a certain date. If necessary, it should also be noted under which conditions the employee is subject to the special regulations for posted workers.

12. Agreements on exemptions from the posting rules

The ordinances stipulate that a posting may not exceed a period of 24 months. However, according to Article 16 of Regulation 883/2004, two or more Member States may, by mutual agreement, provide for exceptions to the provisions on the legislation in force, including those already mentioned special provisions related to the posting of workers. Article 16 agreements require the consent of the institutions of both participating Member States and can only be concluded in the interests of one person or group of people. Such agreements between Member States can certainly lead to administrative simplification, but this must not be the only reason to conclude such agreements. The interests of the data subject must always be decisive

be. For example, if it is known that the posting of a worker is expected to take more than 24 months, the posting state and the employing state (s) must conclude an agreement if the worker is to remain subject to the legislation of the posting state. Article 16 agreements can also be used to make a posting retrospectively

to be approved if this is in the interests of the employee concerned, e.g. B. if the law of the wrong Member State has been applied. However, retrospective approval should only be granted in rare exceptional cases. If it is foreseeable (or it becomes clear after the start of the posting period) that the activity will last longer than 24 months, the person concerned must immediately submit an application to the competent authority of the Member State whose legislation they wish to be subject to. This request should be made in advance if at all possible. If no application is made to extend the posting period to more than 24 months or if the states concerned do not conclude an agreement in accordance with Article 16 of the Regulation on the extension of the application of the legislation of the posting state, the legislation of the Member State in which the Employee actually works.

13. When can a new posting be requested after the posting has expired?

If the posting of a worker has expired, another posting for the same worker, the same company and the same Member State can only be authorized after at least two months after the end of the previous posting period. However, this principle can be deviated from under special circumstances13.If the posted employee cannot complete his or her job due to unforeseen circumstances, he or his employer can request an extension of the originally planned posting period until the job is completed (up to a total of 24 months) without taking into account the necessary interruption of at least two months. Such an application must be submitted before the end of the previous posting period and accompanied by the necessary evidence.

Examples:

a) Worker A is posted from Member State A to Member State B for 12 months. During this period, he is absent for three months due to a serious illness and cannot continue or complete the planned work in Member State B. Since he was unable to complete the work due to unforeseen circumstances, he or his employer can request an extension of the original posting period by three months immediately after the end of the originally planned 12 months.

b) Worker B is posted from Member State A to Member State B for 24 months to carry out construction work. During this period it turns out that due to difficulties with the project, the work cannot be completed by the end of the 24 months. Even if employee B is unable to complete the work due to unforeseen circumstances, the posting state cannot approve an extension of the posting period immediately after the 24 months have expired. The only way to achieve this is through an Article 16 agreement

13 See also resolution A2 of the Administrative Commission. between the responsible institutions (see point 12). If no such agreement is concluded, the posting ends after 24 months.

14. How are postings that have been approved and started under Regulation 1408/71 treated? Do these periods count towards the 24 months allowed under Regulation 883/2004?

Regulation 883/2004 does not contain any explicit provisions on the aggregation of posting periods according to the old and the new regulation. However, it was the clear intention of the legislature to limit the maximum possible duration of the posting to 24 months. Therefore, under the new regulations, after a posting period totaling 24 months has ended, no new posting period can be authorized for the same worker, the same company and the same Member State (except in the context of an agreement under Article 16 )14. The following examples illustrate how posting periods, to which both Regulations apply, should be handled.

a) Issue of posting form E 101 for the period from May 1st, 2009 to April 30th, 2010 → further posting according to Regulation No. 883/2004 is possible until April 30th, 2011.

b) Form E 101 is issued for the period from March 1, 2010 to February 28, 2011 → further posting according to Regulation No. 883/2004 is possible up to February 28, 2012.

c) Issue of posting form E 101 for the period from May 1st, 2008 to April 30th, 2009 and Form E 102 for the period from May 1st, 2009 to April 30th, 2010 → no further posting is possible in accordance with Regulation No. 883/2004, because the maximum posting period of 24 months has already expired.

d) Issue of posting form E 101 for the period from 1.3.2009 to 28.2.2010 and of form E 102 for the period from 1.3.2010 to 28.2.2011 → no further posting is possible in accordance with Regulation No. 883/2004, because the maximum posting period of 24 months has already expired.

e) Application for posting from April 1st, 2010 to March 31st, 2012. For this period, the provisions of Regulation 1408/71 cannot be applied as it is longer than 12 months. An agreement under Article 16 is therefore necessary.

15. Suspension or interruption of the posting period

The suspension of the work during the posting period - for whatever reason (vacation, illness, training courses at the posting company, etc.) - does not constitute an interruption of the posting, which is an extension of the 14 See also decision A3 of the Administrative Commission. Would justify posting by an appropriate period of time. The posting period ends exactly on the planned date, regardless of the number and duration of the events that led to the suspension of the activity. Under special circumstances, however, in accordance with Resolution A2, this principle can be deviated from if the total posting period is no longer than 24 months (see point 13). In the case of illness lasting one month, a posting that was originally planned for a period of 24 months cannot be reduced to 25 months

The start of the posting can be extended. In the event of a longer suspension of work, the persons concerned are free to either keep the planned duration of the posting or to end the posting in order to - taking into account the necessary interruption of at least two months - the same person, as described under point 13, or a to induce another person.

16. Notification of changes during the posting period

The posted worker and his employer must inform the authorities in the posting state of any changes that occur during the posting period, in particular:

  • if the posted posting ultimately did not take place or ended earlier than planned;

  • if the activity has been interrupted and it is not a matter of short interruptions due to illness, vacation, courses, etc. (see points 13 and 15);

  • if the posted worker is from his employer to another

Company in the posting state, especially in the case of one

Merger or transition of companies.

The competent institution in the sending country should, if necessary and upon request, inform the authorities in the country of employment if one of the above-mentioned cases occurs.

17. Obligation to provide information and review of the legality of postings

In order to ensure the correct use of the posting instrument, the competent institutions of the Member State whose legislation continues to apply to workers are obliged to inform the employer and posted workers (e.g. through information brochures and websites) about the conditions of their posting to inform them and also to point out that controls may be carried out to check whether the conditions on the basis of which the posting was authorized are still met. The responsible bodies in the sending state and the employing state guarantee companies and employees in every respect that obstacles to free movement and the free movement of services are avoided, but they also take every possible initiative, individually or jointly, to check whether the relevant conditions for the posting are met are fulfilled and continue to exist (employment law binding, carrying out a significant business activity in the sending country, carrying out a similar activity, practical guide: the determination of the applicable law for employees in the European Union (EU), in the European Economic Area (EEA) and in Switzerland August 2012 18/36 Maintaining the infrastructure required for self-employment in the country of establishment, etc.). The procedures to be used if the competent authorities cannot agree on the legality of the posting conditions or the legal provisions to be applied in individual cases are set out in resolution A1 of the Administrative Commission.

Part II: Carrying out an employment in two or more

Member States

1. Which social security law applies to people who are usually in two

or more member states are working?

There are special rules for people who usually work in two or more Member States17. The aim of this rule, as with all rules for determining the applicable law, is to ensure that only the social security law of a single Member State applies. Accordingly, the regulations stipulate that a person who is usually employed in two or more Member States

is subject to the following legal provisions:

i) the legal provisions of Member State of residence18if she works for one employer19 in different Member States and one essential part of their work20 exercises in the Member State of residence;

Example:

Mr X lives in Spain. His employer is based in Portugal. Mr X works two days a week in Spain and three days in Portugal. Since Mr X works two out of five days in Spain, he carries out a “substantial part” of his work in Spain. Spanish legislation applies.

ii) the legislation of Member State of residencewhen he is at different companies or different employers is employed whose registered office or domicile is in different

Member States is located;

Example:

Mr. Y lives in Hungary. Mr. Y has two employers, one in Hungary and one in Romania. He works one day a week in Hungary; on the other four days in Romania. Since Mr Y works for different employers who are based in different Member States, Hungary, as the Member State of residence, is the responsible Member State.

iii) the legislation of Member State in which the employer's registered office or domicile is located is locatedthat employs the person If you does not carry out a substantial part of their work in the Member State of residence.

Example:

Ms. Z is employed by a company in Greece. She works one day a week at home in Bulgaria and the rest of the time in Greece. Since one day of the week corresponds to a share of 20% of employment, Ms. Z does not carry out a “substantial part” of her job in Bulgaria. Therefore the Greek legislation applies.

iv) If a person works as an employee in two or more Member States for an employer who has his seat outside the territory of the European Union and if that person is domiciled in a Member State in which he does not carry out a substantial part of his work , it is subject to the legislation of the Member State of residence.

Example:

Ms P lives in Belgium. Your employer's company is based in the United States. Ms P usually works half a day a week in Italy and three days a week in France. She also works one day a month in the United States. For professional activity in Italy and France, the Belgian legislation applies in accordance with Article 14 (11) of Regulation 987/2009.

These rules are similar in essence to the rules in Article 14 of Regulation 1408/71, but are kept simpler. In particular, due to the amended regulations, the special provisions of Regulation 1408/71, which relate to driving or flying personnel, are no longer applicable, and the term “essential part of the activity” is introduced. These regulations therefore apply to a large number of employed persons - including the self-employed (see point 9). For example, airline employees and international drivers fall

Long-distance haulage, train drivers, international courier staff, computer specialists and other professionals who work, for example, two days a week in one Member State and three days in another Member State, all under these rules. If the domicile of a person who works in more than one Member State and the domicile or domicile of that person's employer are in the same Member State, the legislation of that Member State will always apply. In this case it is not necessary to determine whether or not a substantial part of the activity is carried out in the Member State of residence.m According to Article 11 (2) of Regulation 883/2004, persons who receive cash benefits as a result of their activity as employed or self-employed21 or

as a result, assume that they are performing the activity in question. If a person receives short-term benefits from one Member State and carries out an activity in another Member State at the same time, it must be assumed that this person carries out two activities in two different Member States to which the provisions of Article 13 apply. If the benefit paid in the Member State of residence is due to "a substantial part" of the activity of the person concerned, that person is subject to the legislation of the Member State of residence. However, the Member States agreed that persons who receive unemployment benefits in their Member State of residence and at the same time work part-time in another Member State are subject exclusively to the legislation of the first State, both with regard to the payment of contributions and the granting of benefits, 22 and recommended that agreements should be concluded for this solution in accordance with Article 16 (1) of Regulation 883/2004. In the case where a person is receiving long-term benefits23 from one Member State and working in another Member State at the same time, this is not to be regarded as an activity in two or more Member States and the applicable legislation is in accordance with the provisions of Article 11 (1) 3 of Regulation 883/2004.

2. When can it be assumed that a person is habitually employed in two or more Member States? 24

The regulations stipulate that a person "habitually employed in two or more Member States" means a person who:

a) maintains an activity in one Member State and at the same time carries out a separate activity in one or more other Member States, regardless of the duration or nature of that separate activity;

b) continuously alternates activities, with the exception of insignificant activities, in two or more Member States, regardless of the frequency or regularity of the change.

This provision was adopted to take account of the various cases already dealt with by the European Court of Justice. The intention is to cover all conceivable cases of multiple activities with a cross-border character and to distinguish between activities for a single employer and activities for two or more employers whose head office or residence is in the territory of different Member States.

The first case (Letter a) covers those cases in which additional employment relationships exist in different Member States at the same time, as several employment contracts exist at the same time. The second or additional job could be done during paid vacation periods or on weekends, or in the case of part-time jobs, two different jobs for two different employers could be performed on the same day. For example, a retail salesperson in one Member State would be covered by this provision even if he worked as an employed taxi driver on weekends in another Member State.

The second case (Letter b) refers to persons with a single employment contract who usually work for their employer in the territory of several Member States. It does not matter how often this change occurs. However, in order to avoid possible manipulation of the applicable legal provisions, insignificant activities should be excluded. This counteracts abuse if, for example, an employer only employs a person in one Member State but, in order to apply the legislation of another Member State via Article 13 of Regulation 883/2004, obliges the person concerned to work in another for a short period as well Member State to work. In such cases, the insignificant activity does not need to be taken into account when determining the applicable legal provisions.

For activities on an insignificant scale these are activities that are carried out on a long-term basis, but are insignificant in terms of time expenditure and economic return. As an indicator, it is proposed to consider activities that make up less than 5% of the employee's regular working hours25 and / or less than 5% of his total remuneration as insignificant activities. The nature of the activities, for example activities that are of a supportive nature, that are not carried out independently, that are carried out at home or in the service of the main activity, can also be used as an indicator that these are insignificant activities.If a person carries out an "insignificant activity" in one Member State and works for the same employer in another Member State, he is not considered to be a person who is habitually active in two or more Member States and is therefore not covered Article 13 (1) of Regulation 883/2004. In such a case, the person will in determining the applicableLegislation treated as if they carried out an activity in only one Member State. If the insignificant activity results in a social security obligation, the contributions are to be paid from the total income from all activities in the responsible Member State. Not specifically mentioned is the case where a person carries out several different activities, but one after the other and not at the same time, and it is clear that these activities are only very short-term, alternating activities that are carried out regularly. Example: a singer works on a long-term contract in her Member State of residence but works on a fixed-term contract at an opera house in another Member State during the summer season. After this temporary engagement, she signs a new contract with an opera house in the Member State of residence. If it is recognized that she usually carries out such temporary work abroad and then returns to work in the Member State of residence, such cases can also be classified as work in several Member States; the applicable legal provisions are accordingly to be determined in accordance with the provisions of Article 13 of Regulation 883/2004 in conjunction with Article 14 paragraph 10 of Regulation 987/2009. For the Differentiation between multiple jobs and posting the duration and nature of the activity in one or more Member States are decisive (permanent or of short-term or temporary duration26).

3. How is “essential gainful employment” defined?

A "essential part of employment“Which is carried out in a Member State means that a quantitatively significant part of all activities of a worker are carried out there, which does not necessarily have to be the greater part of his activity. In order to determine whether a significant part of a worker's activity is carried out in a Member State, the following criteria should be used as a guide:

  • the working hours28 and / or

  • the wages.

If, in the course of an overall assessment, it is found that a person spends at least 25% of their working hours in the Member State of residence and / or that at least 25% of the person's remuneration is received in the Member State of residence, this is deemed to be indicator, the existence essential part of all activities of the employee is exercised in that Member State. Although working hours and / or wages must be taken into account, this list does not claim to be complete and further criteria can be taken into account if necessary. It is the task of the designated institutions to take into account all relevant criteria and to carry out an overall assessment of the circumstances of the person concerned before a decision is made on the legal provisions to be applied. In addition to the criteria listed above, the presumed situation in

the following twelve calendar months imperative must be taken into account.29 The previous course of the employment relationship is also a reliable measure of future behavior; If a decision cannot be based on planned working conditions or work schedules, it would be useful to look at the situation over the past twelve months and to use this period to assess a significant activity. If a company has only recently been established, this assessment can be based on a shorter period of time.

Examples:

Mr. X is an IT consultant. He works for a Belgium based company in Austria and Belgium. He lives in Austria, where he carries out a substantial part of his work, i. H. he carries out at least 25% of his work there and / or receives at least 25% of his remuneration from it. Since he lives in Austria and fulfills the requirement that a substantial part of his work is carried out in Austria, the legal provisions of this country apply (see point 1.i)). If, on the other hand, less than 25% of his activities were carried out in Austria (or his wages were received there), the legislation of the Member State in which the company is domiciled or domiciled would apply. Ms. Y is a lawyer. She works in Austria for a law firm based in Austria and in Slovakia for another law firm based in Slovakia. She lives in Hungary. In this case, the Hungarian legislation applies (see point 1.ii)). Ms. Z is a lawyer. She works for two different law firms, one in Italy and one in Slovenia, the state where she lives. Most of her work is carried out in Italy and she does not meet the “essential work” requirement in her country of residence. However, the legislation of her country of residence applies, as she is employed by different companies based in different Member States. See Chapter 1 ii) above. Mr P is a pilot. He works for a company that is based in France and from which he receives his wages. He lives in Spain, where he does not, however, carry out a substantial part of his work. French legislation applies (see point 1.iii)). Mr T works for a company whose headquarters are in the Netherlands. Mr T has never worked in the Netherlands. The company provides truck drivers for various international transport companies. The employee does not work in the Netherlands or in his country of residence, Poland. Since he does not carry out any part of his work in his Member State of residence, the legislation of the Netherlands applies.

4. Substantial employment and workers in international

Transportation

As already indicated, the special regulations applicable to employees in international transport in Regulation 1408/71 have not been incorporated into the new regulations. As a result, the same general rules that apply to those working in two or more Member States also apply to workers in international transport. This chapter of the guide is intended to provide assistance in dealing with the special employment contracts that apply in the international transport industry. However, if an initial assessment clearly shows that a worker carries out a substantial part of his work in his Member State of residence, the institutions should no longer need to apply the special criteria listed in the following chapters. In the Assessment of the "essential part of gainful employment" for this group of employees it is assumed that the working time is the most suitable criterion for a decision. At the same time, however, it is taken into account that the division of work between two or more Member States may not always be as easy for transport workers as it is for "normal" jobs. Therefore, a more detailed study of the employment contract may be necessary in order to identify the applicable legislation in those cases where it is difficult to estimate the working time in the Member State of residence. Some employees in the transport industry have fixed working conditions, driving routes and planned driving times. Anyone seeking a decision on the applicable legal provisions must therefore provide suitable evidence (e.g. by submitting operational plans or timetables or other information), on the basis of which the exercise of gainful employment can be divided according to the hours worked in the Member State of residence and in other Member States . If no information is available on the hours worked in the Member State of residence or if it is not clear from the overall circumstances that a substantial part of the gainful activity is carried out in the Member State of residence, a method other than the determination of the working hours can be used to determine whether a substantial part of the Gainful employment in the Member State of residence or not. In this context it is proposed to divide the activity into different

To break down components or processes and to assess the extent of employment in the Member State of residence on the basis of the number of work sections taking place there, as a percentage of the total number of work sections in a certain period (as outlined in point 3, the assessment should as far as possible be based on the Based on the working conditions for a period of twelve months). In road transport, the focus should be on the loading and unloading of cargo and the different Member States in which this takes place. This is illustrated in the example below.

Example 1:

A truck driver lives in Germany and is employed by a Dutch transport company. The employee works mainly in the Netherlands, Belgium, Germany and Austria. Over a certain period of time, e.g. For example, a week (a week is assumed to be a manageable period in this example, but any other period can also be used) 30, he loads the truck five times and unloads it five times. Overall, this includes

Period of ten work phases (five loads, five unloads). During this period, he charges and discharges once in Germany, his country of residence. This corresponds to two stages of work, i.e. 20% of the total, which indicates that he does not carry out a substantial part of his work in his Member State of residence. Therefore the legislation of the Netherlands applies as the employer's registered office is in this Member State. In the case of air carriers, the number of take-offs and landings and their location can be used as a basis instead of the number of loadings and unloadings. 30 This timeframe is just an example. The determination of the twelve-month period does not conflict with this for this purpose. This is explained in more detail in point 3.

Example 2:

An airline crew member resides in the UK, is employed by an employer based / resident in the Netherlands and begins and ends work shifts at their home base in Amsterdam, with commuting to and from work not being part of the job. In one day he flies the route Amsterdam - London - Amsterdam - Barcelona - Amsterdam - Rome - Amsterdam. This working day comprises twelve work phases. One sixth of this activity (one landing and one take-off) is in the UK, which is not an essential part of the activity. Therefore, the Dutch legislation applies as the Netherlands is the Member State in which the

Employer. Given the wide range of employment contracts that may apply in this industry, it would be impossible to propose a system of appraisal that would fit all issues. When assessing the essential activity, the ordinances expressly provide for an assessment of working hours and wages. However, it is in the regulations

stipulates that these are used as indicators in the context of an overall assessment of the circumstances of a particular person. Therefore, the designated institutions, which are responsible for determining the applicable legal provisions, can take measures other than those outlined in the ordinances and in this guide, which they consider to be more suitable for the respective situation that they have to regulate.

5. Over what period of time should the assessment of a substantial gainful activity extend??

See point 3: How is the “essential activity” defined?

6. What should happen if the work schedules or working conditions change?

It is known that employment contracts, e.g. B. for workers in international transport, can change frequently. It would be neither practical nor in the interests of workers to check which legislation is applicable every time the work schedules change. When a decision has been made on the applicable legislation, it should be in principle

not be checked again for at least the following twelve months - provided that the information has been provided by the employer or the employee concerned to the best of their knowledge and belief. This applies without prejudice to the right of an institution to re-examine a decision once it has made if it considers such a review to be justified. The aim is to create legal certainty and to avoid the so-called "yo-yo" effect - especially for highly mobile workers such as those in international transport.

Therefore the following applies:

  • The applicable legal provisions are to be determined in accordance with Article 13 (1) of Regulation 883/2004 and will in principle remain unchanged for the following twelve calendar months.

  • The presumed future situation during the following twelve calendar months must be taken into account.

  • If there are no indications that the working conditions will change significantly in the following twelve months, the designated institution must base the overall assessment on the course of the employment relationship over the last twelve months and apply this to the facts during the following twelve months.

  • If the person concerned is of the opinion that the facts have changed or will change significantly with regard to their working conditions, this person and / or their employer can request a reassessment of the applicable legal provisions before the twelve-month period expires.

  • If there is no information on the previous course of the employment relationship or if the employment relationship extends for less than twelve months, the only possible solution is to use the data immediately available and to ask the persons concerned to submit meaningful information. In practice, this would mean that the working conditions introduced since the beginning of the employment relationship or the assumed work activity in the following twelve months are used as the basis.

It should be noted that the agreements described in this chapter only relate to the working conditions for the employee. If the circumstances for the person concerned change significantly in other respects during the 12 month period after a decision on the applicable legal provisions has been made, for example due to a change in employment or place of residence, the employee and / or his employer to inform the designated institution so that the question of the applicable legal provisions can be checked. As already mentioned, it is of course always available to the designated wearer

optional to review a decision on the applicable legal provisions, if it deems appropriate review appropriate. Unless incorrect information was deliberately provided in the original determination of the applicable legal provisions, changes resulting from a relevant review may not take effect retrospectively.

7. Establishing the registered office or domicile

If a person who is gainfully employed in more than one Member State does not carry out a substantial part of his activity in the Member State of residence, the legislation of the Member State in which the employer or company which he is domiciled is located shall apply employed. The term "Seat or domicile"Is not defined in Regulation 883/2004, but there are numerous guidelines in the case law of the European Court of Justice and in other EU legislation that can serve as a guide for decision-makers in determining the place of business of a company that the person concerned is employed. In principle, "letterbox companies", in which the social security of the employees is tied to a pure management company that has no actual decision-making powers, should not be viewed as a type of company that meets the requirements in this area. The following guidelines are intended to assist the providers in evaluating applications that are suspected of being a “letterbox company”. In a tax law case (Planzer Luxembourg Sarl, C-73/06) the Court ruled that the term “seat of economic activity” denotes the place where the essential decisions for the general management of a company are made and the acts for its central administration are carried out. The Court found:

"When determining the seat of a company, a variety of factors must be taken into account, primarily the statutory seat, the location of the central administration, the place where the executives of the company meet and the - usually coinciding with this - Place where the general corporate policy of this company is determined. Other elements, such as the domicile of the main executives, the place where the shareholders' meeting meets, the place where the administrative documents are drawn up and the books are kept, and the place where the financial and, in particular, the banking business are mainly carried out, may be should also be considered ”.

The term “seat or place of residence” can vary depending on the industry and can be adapted to the area to which it applies, for example in the operation of air transport services32 or in the area of ​​the motor transport industry. From the above it follows that certain requirements must be met for the registered office or domicile of a company to be recognized as such. It is suggested that the institution of residence review the following criteria, based on the information available or in close cooperation with the institution in the Member State in which the employer is established or resident:

  • the place where the company has its registered office and administration;

  • the length of time the company has been registered in the Member State in question;

  • the number of administrative staff working in the office concerned;

  • the place where the vast majority of contracts with customers are concluded;

  • the office from which policy and operational decisions are made;

  • the location where the main financial functions, including banking, are located;

  • the place which, according to EU legislation, is the place responsible for the administration and maintenance of records related to the regulatory requirements of the relevant industry in which the company operates;

  • the place where the workers are hired.

If, after examining the above criteria, the institution still cannot completely exclude the risk that the registered office is a "letterbox company", the legislation of the Member State in which the company is located must be applied to the person concerned, with whom the employee has the closest ties when exercising dependent employment. This company is deemed to be the seat or domicile of the employer of the person concerned for the purposes of the Regulations. In making this determination, it must be remembered that this company is actually the person in question employed and that there is a labor law relationship with the person as defined in Part I.4 of these guidelines.

8. What procedures do people have to follow when working in two or more Member States?

Persons who are usually employed in two or more Member States must report this fact to the designated institution of the Member State in which they reside. An institution in another Member State that receives a notification in error should immediately forward this notification to the designated institution in the Member State of residence of the person concerned. Exist between the institutions in two or more Member States different

Opinions on where the person is resident should first be resolved between the institutions under the relevant procedure and the SED35 for determining the Member State of residence. The designated carrier in Member State of Residence determine the Member State whose legislation applies, taking into account the procedures described in this guide. This determination must be made immediately and initially provisionally. The institution at the place of residence must then inform the designated institutions in the individual member states in which the activity is carried out and in which the seat or domicile of the employer is located about its decision by using suitable SEDs. The applicable legislation will become definitively applicable, if not within two months after the designated institution has been informed of its decision by the designated institution of the Member State of residence

an objection is lodged. If the applicable legislation has already been agreed by the Member States concerned on the basis of Article 16 (4) of Regulation 987/2009, a final decision can be taken from the start. In these cases, there is no requirement to issue a preliminary decision. The competent institution of the Member State whose legislation has been found to be applicable must immediately inform the person concerned of this. The institution can do this either by means of a cover letter or using the mobile document A1 (certificate of the applicable legal provisions36)

cause. If the competent institution issues a mobile document (PD) A1 with which the person is informed of the applicable legal provisions, this can be done as a provisional or final determination. If the institution issues a PD A1 stating that the determination is provisional, it must issue the person concerned with a new PD A1 as soon as the decision becomes final. A carrier may also choose to immediately issue a definitive PD A1 to inform the person concerned. However, if the jurisdiction of this Member State is contested and the final jurisdiction does not coincide with the original jurisdiction indicated by the designated institution in the Member State of residence, the PD A1 must be withdrawn immediately and replaced by a PD A1 issued by the Member State designated as the

the final Member State responsible has been established. Further information on PD A1 can be found in the guidelines on the use of portable documents37. If a person who is usually employed in two or more Member States does not inform the appointed institution of the Member State in which he is resident of this matter, the procedures set out in Article 16 of Regulation 987/2009 shall also apply to him, as soon as the institution in the Member State of residence becomes aware of the circumstances of the person concerned.

9. How are self-employed persons treated, who are usually self-employed in two or more Member States?

A special rule applies to persons who are usually self-employed in two or more Member States, which states that persons who are usually self-employed in two or more Member States are subject to the following legal provisions:

  • the legislation of the Member State of residence if they carry out a substantial part of their gainful employment in that Member State;

  • the legislation of the Member State in which they are employed, if they do not reside in one of the Member States in which they carry out a substantial part of their gainful employment.

The criteria for assessing essential employment and for the focus of a person's activity are outlined in points 11 and 13.

10. When can it be assumed that a person is usually self-employed in two or more Member States?

The statement that a person “is usually self-employed in two or more Member States” refers in particular to persons who, at the same time or alternately, carry out one or more self-employed activities in the territory of two or more Member States. The nature of the employment is not important in this determination. However, insignificant gainful or secondary activities which are insignificant in terms of time and economic return should not be taken into account when determining the applicable legislation on the basis of Title II of Regulation 883/2004. Employment remains important in the application of national social security laws; if the insignificant gainful employment justifies a social security obligation, the contributions for the total income from all gainful activities are in the competent one

To be paid by the Member State. Care should be taken to ensure that temporary postings in accordance with Article 12 (2) of Regulation 883/2004 are not confused with the provisions for people who are gainfully employed in two or more Member States. In the first case, the person concerned works for a limited period in another Member State. In the latter case, employment in different Member States is a normal part of the self-employed person's business.

11. How is the “essential part of self-employment” defined?

A “substantial part of self-employment” in a Member State of residence means that a quantitatively significant part of all gainful employment of the self-employed person is carried out in that Member State, although this does not necessarily have to be the majority of these activities.

In order to determine whether a substantial part of the self-employed person's work is carried out in a Member State, the following factors are necessary imperative to note:

  • Sales;

  • Working hours;

  • Number of services provided and / or

  • income

If the overall assessment shows that at least 25% of the above criteria are met, this is an indication that a substantial part of all gainful employment of the person concerned is carried out in the Member State of residence. Consideration of the above criteria is mandatory, but this list does not claim to be exhaustive and other criteria can also be taken into account.

Example:

Maurer X is self-employed in Hungary, where he also lives. On weekends, he occasionally works as a self-employed person for an agricultural company in Austria. Bricklayer

X works five days a week in Hungary and a maximum of two days a week in Austria. Mason X carries out a substantial part of his activity in Hungary, therefore the Hungarian legislation applies.

12. What procedural rules do self-employed workers have to comply with if they are employed in two or more Member States?

The procedural rules that must be complied with in order to determine the applicable legal provisions for self-employed persons who are gainfully employed in two or more Member States are the same as for dependent employees in accordance with point 8. The self-employed person should independently contact the institution in the Member State of residence.

13. What are the criteria for determining where the center of activity is?

If a person does not live in one of the Member States in which he carries out a substantial part of his gainful activity, he is subject to the legislation of the Member State in which the center of his activities is located. The center of employment must be determined by taking into account all aspects of a person's professional activity, in particular those following criteria:

  • the place where the permanent and permanent establishments are located, in which the person concerned carries out his activity;

  • the usual nature or duration of the activities carried out;

  • the number of services provided and

  • the intentions of the person as they emerge from the set of circumstances.