25 August 2015

Fourth update Annex II FMP

EU / CH shuts (a) back door to the residency allocation

Previously, if an employee worked for both an employer abroad and an employer in his country of residence, he was always subject to the social security legislation of his country of residence. This was partly objectionable; already resulting in the instances where marginal, possibly even unpaid, employment (e.g. temporary bartender, youth football coach) in the country of residence led to allocation under that country’s social security legislation. For the main employer, accountable under foreign law, this led to administrative costs and social security risks. In particular, there was the risk of having to pay social security contributions again, because they were initially paid at the wrong place. Since January 2015, in such cases an allocation in the country of residence requires the employee to carry out a 'substantial part' (i.e. at least 25%) of his employment there. Otherwise, the rules in the country of residence of the (principal) employer shall apply.

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