EC Regulation
Determination Rules
Step-by Step Roadmap
There are clear rules for assignments within the European Union, EEA (Iceland, Norway, Liechtenstein), and Switzerland region that ensure employees maintain mandatory coverage in only one country at a time to prevent their social security from becoming scattered over multiple jurisdictions. These rules have been established through multilateral treaties (EC Regulations).
The most relevant legislation is EC Regulation 883/2004, which governs these cross-border social security matters. The applicability of this regulation depends on several specific conditions that will be examined in detail in the sections below.
Note:
The Regulation establishes in which member state the employee is subject to mandatory social security coverage during their assignment abroad. However, it does NOT determine which specific social insurance schemes within that member state apply to the worker, nor do they define the exact entitlements and obligations that arise during the temporary stay.
Step 1 - Does the assignment fall within the Regulation's Scope?
The EC Regulation applies if the assignment falls within the following three dimensions:
a) The Personal Scope, which refers to the individuals.
b) The Territorial Scope, which refers to countries or jurisdictions.
c) The Material Scope, which refers to insurances.
Step 2 - Assignment classification: Posting (Secondment)
The basic rule of the EC Regulation is that an employee is subject to social security in the country where they physically perform their work activities.
However, the Regulation provides two significant exceptions to this general rule. The first exception applies to secondments, commonly referred to as "Postings."
Step 3 - Assignment classification: Working in Multiple Member States
The second exception to the main rule applies when an employee works simultaneously or in alternation across multiple member states. For these cases, the EC Regulation provides specific determination rules to establish the country where the employee is subject to social security: the country of the employee's residence or the country where the employer is located.
Step 4 - Hybrid Work and the Social Security Framework Agreement
The Framework Agreement provides a flexible solution, as well as significant administrative benefits, for cross-border employment arrangements. Under this agreement, employees can work remotely from their home country for up to 49.9% of their working time while maintaining social security coverage in their employer's country.
