A recent ruling by the Court of Justice of the European Union Case C 743/23 clarifies the assessment of social security obligations for employees working across multiple EU and non-EU member countries. This decision impacts our understanding of what constitutes a “substantial part” of an employee’s work and has the potential to reshape compliance practices for multinational employers.
Key points from the ruling:
- The CJEU determined that when evaluating whether an employee spends a “substantial part” of their activity in their Member State of residence, activities in third countries (i.e., outside the European Economic Area and Switzerland) must now be considered alongside those in the EEA and Switzerland.
- This significant change can affect the determination of which country’s social security system is responsible for internationally mobile workers who reside in an EEA country or Switzerland, different from where their employer is established, as well as the issuance of European A1 certificates.
It is not yet clear how this ruling will apply to EU/UK multi-state workers under the EU-UK protocol. However, since the rules generally mirror EU coordination rules, a similar approach may be adopted, especially for individuals working in more than one member state and the UK.
Employers and their advisers should consider if any employees could be affected and assess whether any changes may be required in processes going forward.
What challenges do you foresee in adapting to this new interpretation? Let’s discuss!