Germany: New legal provisions to apply for A1 certificate
An A1 certificate for a posted employee can only be applied for electronically in Germany. An A1 form determines which social security legislation applies to the holder of the certificate. The online process is now available, according to § 106 SGB IV, by means of system-checked accounting programmes or an automatic filling aid, and can therefore be directly integrated into the payroll accounting systems. Paper applications are no longer accepted.
The application for an A1 certificate must be sent to the responsible social security institution. The responsibility depends on the health insurance of the respective employee.
If the employee is subject to statutory health insurance the application must be undertaken at the statutory health insurance fund in where the employee is insured.
If the employee is not covered by statutory health insurance the application must be submitted to the statutory pension insurance institution (DRV Bund, DRV Knappschaft Bahn-See or the responsible regional DRV institution). Or, if the employee is a member of a professional pension institution, they must submit your application to the Arbeitsgemeinschaft Berufsständischer Versorgungseinrichtungen e.V. (Association of Professional Pension Institutions).
General rules for posted workers in EU member states
Since 2010, employees posted by their employer to other European countries (EU Member States plus Iceland, Norway, Liechtenstein and Switzerland) are obligated to carry an A1 certificate. The certificate serves as proof that the employee is subject to social security in only one of the participating countries and protects against double contributions.
Posting of workers in the meaning of social security law within the EU
As a posted worker, there is no minimum duration to apply for an A1 certificate.
According to current legal interpretation, no matter the duration, every posting of a worker demands an A1 certificate. The relevant European rules do not provide a time limit for trivial matters. As a result, employees have to carry an A1 certificate with them on all business trips abroad arranged by the company. An A1 certificate is necessary for any cross-border activity. For example: when visiting a trade fair, participating in conferences, and during a business lunch abroad.
An A1 certificate should therefore be applied for – and carried on – every business trip, no matter how short it is.
Risk: reinforced controls
Currently, increased controls of the A1 certificate in other European countries are to be expected. If the employee is not able to provide the A1 certificate there is a risk that substantial fines and penalties will be imposed, especially in France and Austria.
Only those who can prove that an A1 certificate was applied for before the start of the business trip may escape these sanctions in France and Austria.
There is a chance that in the future A1 certificates for business trips will no longer be necessary.
In November 2018, the European Parliament submitted extensive proposals for the revision of the Regulation (EC) No 883/2004. One idea is to implement a rule with the content that a formal application for the posting of workers is not required if the work concerns a business trip.
For further information or to discuss any of the issues raised, please contact Stefanie Andrelang or at 0049 89 24223040.