Citizens of European Union member states can move freely between countries, which means that if your employees are citizens of an EU country, they can work in other EU nations. However, this can cause confusion around which social security system your employee needs to pay into. An A1 Certificate protects your social security rights while preventing them from paying into more than one country's systems.
In most cases, employers take care of A1 Certificates for their employees. This helps protect the company and employees from financial losses and bureaucratic challenges. Even companies that frequently send workers to other countries can struggle with A1 Certificates.
The following article answers some of the most pertinent questions about EU A1 Certificates. You'll also find resources that can help you get answers from local authorities.
What is an A1 Certificate of Coverage?
An A1 Certificate of Coverage is a document that lists an employee's host country and home country (their country of legal residence), where the employee is officially registered and their taxes and social insurance premiums are paid. By getting an A1 document, workers and their employers can be exempt from paying premiums in their host countries.
Self-employed people should also get A1 documents when working outside of their home countries.
In the EU, employees typically only pay into one member country's social security program at a time. For example, let's say you usually work in France but you travel to Denmark for business. You should continue paying into France's social security system. Your employee wouldn't contribute to the host country's system during their stay.
EU law states that they can continue paying into their home country's program for up to two years by default, but an A1 certificate can help clarify that they are paying into another EU state's system. After two years, they can request an extension. Alternatively, your employee can start paying into their host country's social security system. They would only need to renew their A1 Certificate if they were to stay in the host country for longer than two years.
An A1 Certification for business travel or workations ensures your employees only pay into the correct system and avoid accidentally contributing to more than one. Authorities may ask for this proof to make sure working people pay into the correct system regardless of which country they're working in.
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Who needs an A1 Certificate?
Your employees will need an A1 Certificate while temporarily working in an EU country other than their home country. They might also need an A1 form while working in Switzerland. Although not part of the EU, Switzerland has several laws that let it participate in the European internal market.
It's important to note that A1 Certificates are only needed by people who contribute to social security programs in EU countries or non-EU states integrated into the European single market. Non-EU states that have been integrated into the European single market include:
- Akrotiri and Dhekelia
- Georgia
- Moldova
- Northern Ireland
- Switzerland
- Turkey
- Ukraine
Countries that use A1 Certificates may change as treaties and policies evolve.
Also read: Employee relocation country guides
When do you need an A1 Certificate?
Your employees need an A1 Certificate when they work in an EU country other than their own. This includes workations and business trips. Employees may not need an A1 Certificate for business travel that only lasts a few days. Getting the document, however, can set minds at ease and ensure compliance.
If your employees were to work in another country for several weeks or months – for example in the case of posted workers abroad on short assignments or secondments –, they would require an A1 Certificate that exempts them from the host country's social security contributions.
Where is an A1 Certificate valid?
A1 Certificates are valid in European Union member states. Since each country has its own social security system and benefits, your employees need to make sure contributions go to their home country.
Is an A1 Certificate important?
A1 certificates act as proof of where the employee’s social security contributions are paid. Many European countries would require an A1 certificate as part of any immigration filings when an employee is traveling. This means that to stay compliant and prevent penalties, it is important to obtain your A1 Certificate ahead of a business trip.
If your employee is a British citizen, you will need to complete CA3822 to confirm you will pay UK National Insurance while they are working in the EU. Although it's a different document, it provides many of the same benefits as an A1 Certificate.
How long is an A1 Certificate valid for?
A1 Certificates are valid for up to 24 months. If you plan for your employee to work in another country for longer than 24 months, they can reapply for a certificate before the first one expires. If their A1 Certificate expires before they leave the host country, they may need to start paying into that country's social security system.
Since their home country might also require contributions, failing to maintain a valid A1 Certificate can become quite expensive.
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Where and how can I apply for the A1 Certificate?
Each country maintains its own A1 Certificate application process, so the steps you take can vary significantly depending on where your employee lives. For example, Finnish citizens will need to contact the Finnish Centre for Pensions, whilst residents of the Netherlands must contact the SVB International Secondment.
You can find the full contact list for obtaining A1 Certificates on the European Union's official website.
Employers with several workers operating around Europe will need to manage each person's application and status. That can get complicated quickly. A tool like Localyze gives you a user-friendly dashboard where you can manage all of your employees, travel plans, and the associated forms.
How long does it take to get an A1 Certificate?
The time it takes to get an A1 Certificate can vary significantly from country to country and on a case-by-case basis. Some people have received their certificates in as little as two weeks, while others say it can take up to six months. Even if there is a waiting period of several months, a worker can proceed with their trip as long as they have confirmation that the A1 application has been submitted. The trip does not need to be canceled due to delays in receiving the certificate, provided the application was submitted prior to the trip.
However, to be safe, start the application process as soon as you know you or an employee will need to spend time working in another country. You can start by reaching out to your country's A1 Certificate processor to inquire about further documentation.
What happens if an A1 Certificate is missing?
Missing an A1 Certificate can lead to several problems. For instance, the host country might require payment into its social security system.
Since applying for an A1 Certificate is relatively easy, everyone should obtain one before working in another country. The burden of applying is far smaller than the potential burdens you can face during an investigation by the host country.
Are there potential risks and penalties for non-compliance?
Failing to get an A1 Certificate for business travel has potential risks. For instance, your employee might find that you need to pay into the social security programs of their home and host country. Depending on how long they work abroad, contributing to more than one system could become quite expensive.
Lacking an A1 Certificate during a business trip could also create challenges such as breaching the Posted Workers Directive or being accused of Permanent Establishment practices. These could lead to significant financial penalties.
For instance, in recent years, Netflix and Bosch have been fined €2M and €320M respectively in fines for non-compliant business trips taken by their employees.
As A1 certificates are a core component of ensuring your employees travel compliantly, it is important to ensure your team has them before traveling.
Can the A1 Certificate replace a travel visa or work permit?
A1 Certificates don't replace a travel visa or work permit. Citizens of EU member states, however, shouldn't need visas or work permits to conduct business in host countries. A1 Certificates are separate documents that ensure you only pay into your home country's social security system. Employees can work in other countries regardless of whether they have the certificates.
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Simplify the application process with Localyze
Localyze is the all-in-one platform that helps companies unlock global mobility so they can move employees to where they're needed most. Our comprehensive solutions include business trip and workation compliance, helping you to focus on business growth and expansion.
Some features you'll likely find helpful include:
- Workations and business trip compliance.
- HR tool integrations with your preferred HRIS system.
- Step-by-step guides that lead you through the application process.
- A dashboard that shows you each application's status.
- Reports and data you can use to fine-tune processes.
- Relocation assistance and destination services for 27 countries (and counting).
- Access to a Case Manager who can help you solve international employment issues and stay compliant.
Request a Localyze demo today to see how the platform can meet your company's international employment needs.
