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Work in the EU

Coordination of social security systems

The social security of people moving around the territory covered by the EU, the European Economic Area (EEA) and Switzerland (‘Member States’) is governed by two basic legal regulations known as ‘coordination regulations’, which have been in force since 1 May 2010.

The coordination regulations cover the following areas of social security:

  • sickness benefits (e.g. sickness cash benefits and healthcare benefits in kind);
  • maternity and equivalent paternity benefits (e.g. maternity allowance);
  • disability benefits (e.g. disability pensions);
  • old-age benefits (e.g. old-age pensions);
  • survivors’ benefits (e.g. widows’, widowers’ and orphans’ pensions);
  • benefits in respect of accidents at work and occupational illness;
  • death grants (funeral grants);
  • unemployment benefits;
  • pre-retirement benefits (this is not the same as an early pension);
  • family benefits (e.g. child allowance and parental allowances).

The coordination regulations set out the rules determining which Member State’s legislation shall apply to a migrant worker and, more specifically, which Member State’s legislation shall govern the collection of premiums and the granting of social security benefits.

 

Determination of the legislation applicable

The main principle is that persons covered by the coordination regulations are subject to the legislation of a single Member State only. Normally, they are subject to the legislation of the Member State in which they are pursuing their work as an employee or a self-employed person (this is known as the lex loci laboris principle). An employer with an employee in another Member State shall fulfill his obligations under the legislation in force in the country where the employee is employed.

However, the use of other criteria, such as the actual place of work, is also justified in specific situations. This is the case for the temporary posting of an employee to another Member State, a person who habitually works in two or more Member States, and civil servants (these situations are described below).

Civil servants are subject to the legislation of the Member State for whose administration they are working. The activity of an employed or self-employed person normally carried out on board a vessel at sea, flying the flag of a Member State, is deemed to be an activity carried out in that Member State. However, persons employed on board a vessel, flying the flag of a Member State, and remunerated for such activity by an undertaking or a person whose registered office or place of business is in another Member State are subject to the legislation of the latter Member State if they reside in that state. The activity of a flight crew member or a cabin crew member providing passenger or freight air services is deemed to be an activity carried out in the Member State where the home base is located. If employees residing in a Member State in which they do not carry out a substantial part of their activities carry out an activity in two or more Member States for an employer established outside the territory of the EU, they are subject to the legislation of the Member State where they reside.

 

Posting of employees

If employee, who normally pursues his/her activity on behalf of an employer in the posting Member State, is temporarily posted by that employer to another Member State (the receiving State) to carry out work for that employer, he/she continue to be subject to the legislation of the posting State. This is on condition that the work is not expected to last for more than 24 months and they are not being posted to replace another posted person.

Here, replacement is taken to mean a situation where, on the basis of an ongoing agreement, the employer repeatedly posts different employees to the same position and for the same purpose. Persons may be employed to be posted to another Member State, provided that, immediately prior to the commencement of their employment, they are subject to the legislation of the posting State. They must have met this condition for at least one month. Any shorter period requires an individual assessment. During this period, it is not necessary for them to have worked for the posting employer. They may, for example, include a student or a pensioner registered in the posting State’s social security scheme.

The requirement of a direct relationship between the posting employer and the posted employee is framed, in particular, by the employer’s responsibility for recruitment, the existence of an employment contract, the obligation to pay a wage, and the power to terminate the employment relationship, determine the nature of the work, or take disciplinary action against the employee.

The requirement for the employer’s usual activity to be in the posting State is met if an undertaking normally carries out a substantial part of its activities in that territory. If an undertaking’s activities are limited to internal management, this requirement is deemed not to have been met. Separate checks are run in each individual case and in particular they focus on:

  • the place where the employer is established and manages its administration;
  • the number of administrative staff working in the posting State and the receiving State;
  • the place where the posted employee was recruited;
  • the place where most contracts with clients are concluded;
  • the legislation applicable to contracts between the employer and customers and between the employer and its employees;
  • the turnover during an appropriately typical period in the posting and the receiving State;
  • the number of contracts concluded in the posting and the receiving State;
  • the employer’s activity in the posting State, for at least two months before the start of the posting;
  • the employer’s business activities in the posting State over the duration of the posting.

Posting is also possible in a situation where, during their posting, employees shall work in several undertakings, consecutively or simultaneously, in the same receiving State. The decisive factor is that the work must be carried out on behalf of the posting employer. During a posting, a short suspension of activity of no more than two months ‑ whatever the reason (holidays, illness, a training course at the posting undertaking, etc.) ‑ is not treated as an interruption of the posting and does not justify an extension to the duration of the posting. The posting of employees to another receiving State immediately after they have completed a previous posting is treated as a new posting and may be for a maximum of 24 months. Once an employee’s posting comes to an end, no new posting involving the same employee, the same employer and the same Member State may be granted until at least two months have elapsed since the end of the previous posting. The conditions of a posting must be respected for the entire duration of the employees’ posting period. Throughout that period, it must be possible to conduct all checks, especially on the payment of premiums and the maintenance of a direct relationship between the employer and the posted employee.

 

Posting of the self-employed

If a person, who normally works as a self-employed person in the posting State and he/she pursues a similar activity in the receiving State, the legislation of the posting State continues to apply, provided that this work is not expected to last for more than 24 months.

For an activity to be regarded as normal, it must be the norm for self-employed persons to engage in a substantial part of their activity in the posting State for a certain time before the posting, they must be fully eligible to carry out such an activity in the posting State, and they must continue to have the means to engage in this activity on their return. Two months is taken to be a long enough period to satisfy the requirement that an activity must have been carried out for a certain time before the posting. Any shorter period of time needs to be assessed on a case-by-case basis. Assessments for compliance with the requirement ‑ that a substantial part of the activities of a self-employed person must be carried out in Slovakia ‑ concentrate, in particular, on:

  • the existence of premises where the self-employment can be carried out (e.g. an operating facility, office space, or leased business premises);
  • registration in the trade register or with chambers, professional associations, etc.;
  • the payment of taxes in Slovakia;
  • the existence of a tax identification number.

When determining whether a self-employed person is going to another Member State to carry out a similar activity, the salient factor is the actual nature of the activity rather than its categorisation in the receiving State, i.e. whether it is designated as employment or self-employment in Slovakia. During a posting, a short suspension of activity of no more than two months ‑ whatever the reason (holidays, illness, a training course at the posting undertaking, etc.) ‑ is not treated as an interruption of the posting and does not justify an extension to the duration of the posting. The conditions of a posting must be respected for the entire duration of the posting of self-employed persons. Throughout that period, it must be possible to conduct all checks, especially on the payment of contributions and the maintenance of the necessary infrastructure in the posting State.

 

Certificate of social security legislation applicable to the holder — portable document A1 (PD A1)

A posting employer, or a posted self-employed person, shall contact the competent institution of the sending State to request a PD A1 form. In Slovakia, applications for a PD A1 form for a posting person are submitted to a competent branch of the Social Insurance Agency, (see PD A1 Application Form for an Employee Posting and PD A1 Application Form for the Posting of a Self-employed Person).

If the conditions for a posting are met, the Branch Office of the Social Insurance Agency issues a PD A1 certifying that, during a specific period of time, the employee/self-employed person is subject to Slovak legislation, and sends it to the employer/employee or the self-employed person. The employer continues to pay premiums to the Slovak system, from which the employee shall have its right to claim social security benefits in case that eligibility criteria are met, the same applies to posted self-employed person. During a posting abroad, employees or self-employed persons should remain in possession of the certificate and present it to a relevant institution abroad as proof that they are covered by Slovak social security legislation. The certificate is also required by authorities conducting social security checks. During a posting, the Social Insurance Agency checks that all conditions for the posting continue to be met. Changes occurring during a posting are notified in writing by the employer, employee or self-employed person to a Branch Office of the Social Insurance Agency within 10 days (see the Employer/Employee Notification of Changes During a Posting and Self-employed Person’s Notification of Changes During a Posting).

If the conditions for a posting are not met, the posted employee or self-employed person is subject to the legislation of the Member State in which they are pursuing an activity (i.e. the fundamental principle of lex loci laboris applies). The employer, the employee, and the self-employed person are bound by all obligations relating to registration and the payment of social security contributions under the legislation of the State where the activity is carried out. In accordance with the principle that the legislation of only one country is applicable, if employees or self-employed persons are subject to the legislation of the State where they engage in their activity, they cannot pay contributions under Slovak social security legislation, even if they reside in Slovakia.

The concept of posting is also applicable to short-term assignments, even if they are for just one day. If it is objectively impossible to request a PD A1 in good time ahead of a posting, this certificate may be issued during the posting or, with retroactive effect, after it has ended, provided that the conditions for the posting have been met and can be reviewed.

 

Activity of an employee or a self-employed person in Slovakia

A person who is employed or self-employed in Slovakia and subject to Slovak legislation (according to the lex loci laboris principle) and therefore wishes to be exempted from the social security system of another Member State (e.g. the State where they reside) may apply to a relevant branch office of Social Insurance Agency for a PD A1 on the grounds that they are pursuing an activity in Slovakia (see the PD A1 Application Form for Persons pursuing an Activity as an Employed or Self-employed person in the Slovak Republic).

 

Simultaneous activity in two or more Member States

If a person normally carries out an activity as an employed person in two or more Member States, the first step is to determine whether they carry out a substantial part of that activity, i.e. they spend at least 25% of their total working time and/or generate at least 25% of their total remuneration, in the Member State of their residence (their place of residence is taken to mean the place where they usually reside and where the normal centre of interest of their activities is situated, in particular where they have family ties, property, etc.):

  • if this is the case, the legislation of the Member State of residence applies;
  • if this is not the case, the applicable legislation is:
    • the legislation of the Member State in which the registered office or place of business of the undertaking employing them is situated, if they are employed by a single undertaking or employer;
    • the legislation of the Member State in which the registered office or place of business of the undertakings employing them is situated, if they are employed by two undertakings that have their registered office or place of business in the same Member State;
    • the legislation of the Member State – other than the Member State of their residence – in which the registered office or place of business of the undertaking employing them is situated, if they are employed by two undertakings, one of which has its registered office in the Member State of residence and the other in another Member State;
    • the legislation of the Member State of their residence, if they are employed by multiple undertakings or employers with registered offices or places of business in different Member States outside the country of residence.

Self-employed persons who normally carry out an activity in two or more Member States are subject to:

  • the legislation of the Member State of their residence, if they carry out a substantial part of that activity, i.e. they spend at least 25% of their total working time and/or generate at least 25% of their total remuneration, in that Member State;

the legislation of the Member State in which the centre of interest of their activities is situated, if they do not reside in any of the Member States in which they carry out a substantial part of their activity.

 

The centre of interest of the activities of self-employed persons is assessed on a case-by-case basis, mainly by taking account of the place where their fixed and permanent place of business is located, the habitual nature and the duration of the activities carried out, the number of services rendered, and their intentions, as indicated by all the circumstances.

Persons who normally carry out an activity as an employed person in one Member State and as a self-employed person in another Member State are subject to the legislation of the Member State in which they carry out an activity as an employed person.

Persons who are employed as civil servants by one Member State and who carry out an activity as an employed person and/or a self-employed person in one or more other Member States are subject to the legislation of the Member State to which the administration employing them is subject.

When determining the applicable legislation for an activity carried out in two or more Member States, negligible activities (i.e. activities not exceeding 5% of the total working time and/or 5% of the total remuneration) are not taken into account.

If activities are carried out simultaneously in two or more Member States, the applicable social security legislation is still confirmed by a PD A1 form. Persons normally carrying on an activity as an employee or self-employed person in two or more Member States shall notify their situation to the relevant institution of the Member State of their residence. In Slovakia, a request is sent to the relevant branch of Social Insurance Agency to determine the applicable legislation. If a request is made by a person residing in another Member State, Social Insurance Agency shall forward it to the relevant institution in the other Member State or return it to the person submitting the request. If the head office of Social Insurance Agency decides that a person is subject to Slovak legislation, it shall issue and send them a PD A1 certifying this. If Social Insurance Agency determines that the applicable legislation is that of another Member State, it shall notify the person making the request and the institution in the other Member State in charge of issuing a valid PD A1. The employee then makes social security contributions for all activities in the various Member States to that other Member State.

 

Exceptions

Persons wishing to be subject to legislation other than that determined by the above-mentioned rules may apply to the Ministry of Labour, Social Affairs and Family (‘the Ministry’) for an exception, if they wish to be subject to Slovak legislation, or to the relevant institution of another Member State, if they wish to be subject to the legislation of that State. There is no automatic legal entitlement to an exception. If the Ministry has granted an exception to a person to be subject solely to Slovak legislation, a branch of Sociálna poisťovňa shall issue a PD A1 to that person in return for their Application for an A1 Portable Document Further to an Exception.

An exception from Articles 11-15 of the Basic Regulation is granted in accordance with Article 16 if so agreed by two or more Member States, their relevant authorities or bodies designated by them, provided that this is in the interest of certain persons or categories of persons. It is granted with retroactive effect in specific cases.

 

Obligations of an employer whose registered office is not in Slovakia

If employees are subject to Slovak social security legislation and they have an employer whose registered office is situated in another Member State (‘the employer’), in the field of social insurance the employer is bound by all the obligations under the Social Insurance Act.

The employer is obliged to register in the employer’s register at the local branch of the Social Insurance Agency where the employee is resident in Slovakia, no later than the day preceding the day on which the employer’s first employee is subject to Slovak law. The employer deregisters itself within eight days of the date on which it ceases to employ any such employees. If, at the time of registration, the employer has more than one employee, the locally competent branch office of the Social Insurance Agency shall be the branch of the permanent residence of any of the insured persons, as chosen by the employer. In these circumstances, if the employer requests a change of local branch, Social Insurance Agency will comply with this request. If a competent branch office of the Social Insurance Agency cannot be identified on the basis of the insured person’s place of permanent residence, the locally competent branch office of the Social Insurance Agency is determined by the head office’s contributions department. If an employee is a Slovak citizen but is not permanently resident in Slovakia, or is a non-national who is not permanently or temporarily resident in Slovakia, the employer shall register the employee at the branch office of the Social Insurance Agency where the employee carries out an activity in Slovakia. If an employee has several places of gainful activity in Slovakia, the appropriate local branch is taken to be the Branch Office - Bratislava of the Social Insurance Agency.

The employer registers using the Employer Registration Sheet. The employer shall register employees for mandatory social insurance using the Natural Person Registration Sheet before the insurance begins, and at the latest by the time they commence their work.

The employer shall report social insurance contributions by completing the Monthly Premiums and Contributions Statement or the Contributions Statement and pay contributions on behalf of both the employer and the employees. When employees’ activities in Slovakia end or after they cease to have employee status for social insurance purposes (e.g. because their employment is terminated), the employer shall deregister them from mandatory social insurance using the Natural person Registration Sheet within eight days of the cessation of their social insurance.

Employers must also comply with other obligations under the Social Insurance Act and Act No 580/2004 on health insurance, as amended.

 

How to apply for the A1 — work in the EU

(procedure)

  1. The employer fills out the application here: A1 Application Form for an Employee Posting
  2. Self-employed persons fill out the application here: A1 Application Form for the Posting of a Self-employed Person
  3. The completed application is printed, signed and sent or delivered personally to the relevant branch office of the Social insurance Agency.
  4. The Branch Office of the Social Insurance Agency shall issue an A1 document certifying that for a specific period the employee/self-employed person is subject to Slovak legislation and shall send it to the employer/employee or the self-employed person. (Social Insurance Agency issues the A1 free of charge for a maximum period of 24 months.)
  5. Employees and self-employed persons must be in possession of an A1 in the EU country where they carry out an activity because employers in another country require it on the employee’s arrival. (There is no need to translate it as it is a common EU document.)
  6. Changes occurring during a posting shall be notified in writing by the employer, employee or self-employed person to a branch office of the Social Insurance Agency within 10 days (Employer/Employee Notification of Changes During a Posting or Self-employed Person’s Notification of Changes During a Posting).

Reminder to employers: The A1 certificate can only be issued to a specific person, and not to a group of employees.

For more information see: https://ec.europa.eu/social/main.jsp?catId=1127&langId=en