Please note that the content of our website (including any legal information) is intended solely for the purpose of providing non-binding information and does not constitute legal advice in the true sense of the term. The content of this information cannot and should not replace individual and binding legal advice that addresses your specific situation. In this respect, all information is provided without guarantee of correctness, completeness or of being up to date.

Assignments

What are assignments?

With regard to social insurance, the so-called " territory principle" applies, according to which the employee is insured in the country in which they are gainfully employed. This means that all employees in Germany who are gainfully employed there are subject to mandatory social security contributions. In certain cases, the only exceptions to this rule are:

• applicable law above state
• agreements between 1 and 2 
• Broadcast in accordance with§ 4 SGB IV

If an employee goes to another country by instruction of their domestic employer to continue their work there, this is referred to as a "posting" ( posting). In any case, the employee must have previously been employed in Germany, have their place of residence or usual place of residence here. 

Although the assigned employee remains subject to compulsory German social insurance, they are also entitled to the social security system of the country where they are assigned. As a result, you may find that social security contributions have to be paid in two countries for the same employment. To avoid this double payment, there are a number of social security agreements in place, which provide for uniform regulations within the framework of international and international law. 

Assignment within Europe

For postings within Europe, Social Security Regulation (EC) No. 883/2004 generally applies. For this to apply, the following must take place: 

• the employee is posted abroad within the framework of an employment period existing in Germany 
• the assignment must be limited-term from the outset due to the specific type of employment (e.g. a project) or due to a contract
• The employee must not replace another assigned employee 

If all points are met, the employment relationship remains subject to social security contributions according to German legislation, even though the activity is performed abroad. 

Note
For employees who are posted in a country where social security regulations (EU)apply, these regulations take precedence. However, it should be noted that the application of the ordinance may result in restrictions in relation to the statutory, personal and product scope of application. 

Prerequisites 

Information regarding the employer's usual business activities

In order for an employee to be posted according to Regulation (EG) No. 883/2004 , the employer or service authority must usually be active in Germany. However, purely administrative work is not sufficient. The activity must be significant, which means that the employer must generate at least 25% of their turnover in Germany. 

If the organization generates less than 25% of its sales in Germany, all characteristics must be checked. The following points are taken into account: 

• Where the organization is located and has its administration
• The number of Employees who work in the sending country and in the country of employment 
• The number of employees in the employer's permanent establishments in other countries 
• the place where most of the contracts are signed and the law they are subject to 
• the period for which the employer has carried out business activities in Germany

If, when taken as a whole, it is determined that there is some relevant activity in Germany, German legislation applies to the posted employee. 

Details of your employment in Germany

According to Regulation (EC) No. 883/2004 , an employee is posted if German social security legislation has applied to an employee for at least one month prior to their assignment abroad. An assignment would not take place if, for example, an employee lives in Germany but receives their income from employment abroad.

 

An employee's link to the employer under labor law

The link between the two parties under labor law must continue to exist during the assignment. This means that the organization is responsible for recruiting the employee, entering into and maintaining the employment contract , and dismissing the employee. The employer must also remain authorized to issue instructions. 

At the same time, this also means that the employee remains entitled to receive remuneration from their employer in Germany.

An assignment is not relevant under labor law, and therefore an assignment is not relevant, if: 

• the work contract with the second employer has been suspended
• a supplementary work contract has been signed with the organization to which the employee has been assigned
• the foreign organization hires out the assigned employees to another organization. 

Termination of an employee 

An organization might fill a workplace in another member state on a permanent basis by assigning different employees there on a turnover basis. However, this violates the basic idea of posting an employee. That is why, in accordance with Regulation (EC) No. 883/2004 , it does not constitute a posting when a posted person replaces a previously assigned person in another member state.

This would only be permitted in the case of sickness, and the total time frame of the assignment must not exceed the originally planned assignment period. 

 

Temporary assignment 

Under Regulation (EG) No. 883/2004 , a basic requirement for an assignment is that the employment is limited so that the maximum expected duration of the assignment abroad does not exceed 24 months. An employee may be assigned multiple times or an assignment may be extended, as long as the 24-month period is not exceeded. If this cycle is exceeded, employees can apply for an exception agreement. Otherwise, the legislation of the foreign country applies. 

break

An assignment does not end if there is a break of up to two months in a timeframe. This could be due to, e.g vacation, further training or illness. This break will be included in the 24-month period; however, the total period will not be extended as a result

In the event that an assignment is suspended for more than two months, it shall be considered terminated. If the assignment is then resumed after the suspension, the assignment does not need to be reviewed again, provided that no changes have been made. In this case, the break will also be counted as part of the total period of 24 months. 

Reposting

When assigning employees again, it is advisable to check whether a break will be used to maintain the application of German regulations in a normally permanent assignment. If an employee is assigned to the same country again, they can be assigned again if there is a period of at least two months between the two cycles. 

 

Assignment certificate / A1-Bescheinigungen

What is a posting certificate / A1-Bescheinigung?

Employed persons are generally subject to the social security regulations of the country in which they receive their income. If the employee is temporarily posted to another country on the instructions of their employer, the A1 certificate can be used to provide evidence of whether the law of the sending state or the foreign state apply. 

This means that the A1-Bescheinigung documents that the employee remains subject to German social security legislation and that there is no need to pay contributions in several member states at the same time or change the social security system. The following countries are subject to the A1-Bescheinigung rule: 

• all member states of the European Union (EU)
• Liechtenstein 
• Switzerland
• Iceland
• Norway 
• Sweden
• The UK and the North of Ireland 

If no A1 certificate is issued for a trip, the person is usually subject to the legal provisions applicable abroad (territorial principle).

 

Who is the A1 certificate valid for? 

An A1-certificate is required by all employed persons when working temporarily in the above-mentioned countries. 

These include the following groups of people, for example: 

• Employees of a private-sector organization
• civil servants and public employees 
• self-employed persons
• Employees on an open sea journey whose place of residence and employer's registered office is in Germany, but are employed on a vessel under a flag of one of the above countries
• Persons who are residing in Germany with their employer's registered office and are usually employed in two or more member states 

A prerequisite for a foreign assignment is the compliance with the so-called personal scope of application according to EU law. If the candidate's nationality allows for a posting in the desired country of employment, EU nationality always entitles an employee to be assigned to another EU member state. However, there are cases regarding nationality in which EU law does not allow a posting, and an A1-certificate must not be created. See the table below for details:

Application for A1-Certificate 

Employers or the relevant service authorities will usually always apply for the A1-Bescheinigung to be issued electronically via their existing payroll software or the SV reporting portal .

Note
Since 01.01.2021, it is mandatory to submit your application electronically. With certain exceptions, paper forms are no longer permitted. The groups of people concerned and the corresponding requests can be found on the website of the National Association of Statutory Health Insurance Funds

Please note that an A1-certificate should always be provided before the start of the assignment to avoid premature collection of contributions in the country of employment. 

In case of a short-term or short-term business or business travel of up to seven days, the A1-certificate can also be applied for retrospectively, if necessary, according to the case law of the European Court of Law. 

The request for the A1-certificate must be addressed to the responsible job: 

• for employees with statutory health insurance , to the employee's applicable health insurer  
• for employees with private health insurance , the Deutsche Rentenversicherung Bund (the German Federal Pension Scheme).
• For employees with private health insurance . who belong to a professional pension fund (e.g physicians, pharmacists, lawyers) to the Working Group of Professional Pension Schemes (ABV)
• for employees in marginal employment , the application must be submitted to the actual health plan or, in the case of private insurance, to the Deutsche Rentenversicherung Bund (the German Federal Pension Scheme).

Request for an exception 

For employees, the laws of the foreign country apply if the requirements for postings set out in Regulation (EC) No. 883/2004 are not met. If there is a special reason that the laws of the sending state should continue to apply to an employed person during the period of employment abroad, the employer may request an exception agreement. If approved, German laws continue to apply throughout the employment period abroad.

This agreement can be signed for a period of up to 5 years. The general contact person in this case is the German Contact Center for Foreign Health Insurance (GDPR).