A business lunch in Paris, a trade fair visit in Milan or a technical lecture in Brussels - many people regularly or occasionally work abroad. Nevertheless, only very few professionals are aware that you must carry a so-called "A1 certificate" with you, when you are on a business trip within Europe.
What is an A1 certificate?
The certificate has a simple purpose: it serves as proof to an employee that he or she is covered by social security in his or her home country when on a business trip to another European country. This is to ensure that employees, civil servants and also self-employed persons do not pay double social security contributions. In addition, the A1 certificate is intended to prevent wage and social dumping in the case of short-term cross-border work assignments.
Unless it can be proven that there is a social security obligation in the home country, employees are in principle subject to the legal provisions applicable abroad. Against this background, employers may be required by the foreign authorities to pay social security contributions.
The A1 certificate legal basis is the European Union Regulation No. 883/2004 from 2010, which aims to coordinate the numerous social security systems within the EU. It facilitates citizens of the EU to travel within the EU for study, leisure or professional reasons.
When and where do I need an A1 certificate?
Contrary to the widespread opinion that an A1 certificate would only be required for longer working stays abroad, the certificate is needed from the first day abroad.
In concrete terms, the A1 certificate is already obligatory when crossing the border abroad for work-related reasons. Although checks on freeways, in trains or at airports are very rare, checks on the A1 certificate may well be carried out in the context of major events, such as trade fairs or congresses.
Business trips in the EU
The A1 certificate is mandatory for business trips in all member states of the European Union as well as in Iceland, Liechtenstein, Norway, Switzerland and the United Kingdom. The duration and type of cross-border activity do not matter in this regard. Thus, doctors at a specialist congress, sales staff at a trade fair and construction workers on a building site abroad all require an A1 certificate in equal measure.
Finally, the occupational group with the most frequent foreign assignments also requires an A1 certificate: Truck drivers. In the event of an inspection abroad, they too must be able to prove that they are covered by social insurance in their home country. Forwarding companies should therefore make sure that the A1 certificate for truck drivers is available.
Posting certificate outside Europe
For countries outside Europe, by the way, no A1 certificate is required, but another certificate of posting. Germany has concluded bilateral social security agreements with many countries around the world, such as China and the USA. For postings to these countries, the same authorities are responsible as for the A1 certificate.
How long is an A1 certificate valid?
The A1 certificate is generally valid for the duration of the professional stay abroad. An A1 certificate is not issued permanently. The maximum period of validity is 24 months.
A frequently occurring case in business practice is the regular posting of employees to a specific location abroad. In this case, too, a separate A1 certificate for the business trip must generally be applied for each individual assignment abroad.
Regular employment abroad
However, simplifications exist for employees who work more frequently in several European countries. If an employee or self-employed person carries out his or her regular gainful activity in two or more member states of the European Union, he or she can apply for an A1 certificate valid for one year. A regular gainful activity already exists if the employee or self-employed person works abroad one day per month or five days per quarter.
There are also simplifications for so-called “cross-border commuters”. These are persons who go to work in a neighboring country of their country of residence. With an A1 certificate template, these cross-border commuters can prove that they are not subject to social security contributions in their country of residence.
In individual cases, it may happen that employees work abroad for a period longer than 24 months. In this case, under certain circumstances, German social security law can continue to be applied and an exceptional agreement can be reached with the relevant office abroad. In Germany, the GKV-Spitzenverband of the German Liaison Office for Health Insurance – Abroad (DVKA) is responsible for such exceptional cases.
Where and how can I apply for the A1 certificate?
Persons who are compulsorily or voluntarily insured in the statutory health insurance fund receive the A1 certificate from their health insurance fund. Privately insured persons and civil servants apply for the certificate at the German Pension Insurance.
Electronic application procedure
Since the beginning of 2019, it has been mandatory to apply for the A1 certificate via an electronic application procedure. An exception applies to self-employed persons and persons who usually work in several European countries. They can submit the application in paper form. For data protection reasons, applications for an A1 certificate may not be submitted by e-mail.
For employees and civil servants, the employer handles the application. A1 certificates for self-employed persons are issued directly by the office responsible for them, i.e. the health insurance or pension insurance institution.
Duration of issuance
The issuance of an A1 certificate usually takes several days. An A1 certificate from a health insurance company has a prescribed processing time of three working days. Employees who must leave unexpectedly for a trip abroad should therefore be sure to take the application with them so that they have proof with them in the event of an inspection.
Costs of a certificate
Finally, an important note about the costs: The health and pension insurance institutions in Germany do not charge any fees for the issuance of an A1 certificate.
With the right HR-software business trips and travel expenses can be recorded directly by your employees and checked and approved by supervisors, HR or accounting as required. Expenses for travel reimbursements are calculated automatically in HRlab and currency conversions and uploading receipts are taken care of with a few clicks.
What happens if an A1 certificate is missing?
For many years, the authorities in the EU were quite lax in their handling of the A1 certificate. However, controls are gradually increasing and employees who are caught abroad without a valid A1 certificate are threatened with fines.
All EU countries as well as Iceland, Liechtenstein, Norway, Switzerland and the United Kingdom can require foreign employees to prove that they have an A1 certificate. If this is not successful, a fine of between 1,000 and 10,000 euros per employee may be due in individual cases. If several employees are caught without a valid A1 certificate during a check, the fines are added together.
Obligations of the employer
In general, the employee must pay the fine himself. However, the following also applies in this case: No rule without exception. In fact, it is the employer’s duty of care for its employees to inform them of their obligations in connection with work stays abroad.
To put it simply, the employer has a duty to inform his employees about a required certificate.