Social security obligations for multi-state workers

Under EU Regulation (EC) No 883/2004, a person working in multiple Member States is subject to the social security laws of their country of residence, provided they perform a "substantial part" of their activity there. "substantial" is defined as at least 25% of their working time or remuneration.

On the 11th December 2025, the Court of Justice of the European Union (CJEU) ruled, on a case, that when determining if the 25% threshold is met in the country of residence, authorities must take into account all employment activities worldwide. The concept of "activity" is not geographically limited to the EU. To reflect the "real situation" of the worker, third-country work must be included in the denominator of the calculation.

The case involved an employee residing in Germany working for a Swiss employer. His working pattern was roughly divided into:

• 16% in Germany (Residence)

• 16% in Switzerland (Employer location)

• 68% in various "third countries" outside the EU/EEA.

The German authorities argued that third-country work can be ignored. Therefore when they looked at the EU-relevant time (Germany and Switzerland), they concluded the worker spent 50% of his time in Germany, thus triggering German social security.

Considering the CJEU ruling, when the 68% of work done in third countries was included, the 16% spent in Germany no longer met the "substantial" 25% threshold. Consequently, the worker fell under the social security system of Switzerland (the employer's location), not Germany.

This decision fundamentally changes how social security obligations are calculated for "multi-state workers, ie those employees who perform their duties across several EU Member States and in "third countries" (non-EU/EEA nations like the US, China,UK).

The key implications for employers are:

1. Review the social security contributions position for your multi state workers population

   
   

2. Review cases where you have relied on the Multinational Framework Agreement (MFA) to determine the social security rules that apply to cross border remote workers

   
   

3. Do not rely on the information requested on the applications for A1 certificates as the administrative authorities may not have yet updated applications to enter the information about third countries

   
   

4. Review your travel tracking process as it may need to be enhanced to break down work trips to include third countries

   
   

5. Monitor how authorities intend to enforce this new interpretation of the existing rules.

If you have any questions or need help to review your multi-state workers population, you can contact me on vanesha@vkmack.co.uk.