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EU countries have reached an agreement on social security in the context of cross-border remote work. The agreement came into effect on July 1, 2023, and allows the employee to remain covered by social security in the employer's home country even if the employee works remotely in another country for nearly half of the time.
Before the new agreement
Under the original agreement, an employee who normally works in two or more EU/EEA member states would be covered by social security in their country of residence if a substantial part of their work (at least 25%) is performed in that country. This means that, for example, if a person commutes to Sweden - and is covered by Swedish social security - but starts working from home in Finland for more than 25% of the time, the person would typically become covered by Finnish social security. The Swedish employer would likely need to register as an employer in Finland and pay Finnish employer contributions.
What the new agreement entails
The new agreement provides exceptions to the standard rules, allowing employees to engage in remote work in their home country for a greater amount of time without a change in their social security coverage.
The new agreement applies under the following conditions:
- The employee must work at least 50% of their working time in the employer's home country.
- The employee may engage in remote work in their country of residence for at least 25%, but less than 50% of their total working time.
- Remote work is based on information technology to remain connected to the employer's network or IT environment.
- Both the employer and the employee must agree to apply the remote work agreement and deviate from the usual choice-of-law rules regarding applicable social security legislation.
- The employee's social security coverage is confirmed through an A1 certificate. The employer applies for the certificate, citing the remote work agreement, with the social security authority in their home country. In Sweden, the application is made to Försäkringskassan.
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