Are Your EEA or Swiss Employees in the Right Social Security Jurisdiction?

It is also a tax that has clear, EU-wide rules which apply when employers have so-called ‘multi-state workers,’ i.e. people working on a cross-border basis in two or more EEA states (including Switzerland for these purposes).

Traditionally, it was held that where someone worked 25% of their EEA-related working time within the EEA, they (and their employer) would be liable to social security contributions in the individual’s home location and social security would not be due in other EU states (subject to obtaining the relevant A1 documentation). This traditional approach ignored workdays in third countries (i.e. outside the EEA and Switzerland) when assessing whether an individual reached the 25% threshold required by these regulations.

However, on 11 December 2025, the European Court of Justice ruled, in case C-743/23, GKV-Spitzenverband, that in order to determine whether a person, working multi-state in the sense of the EU Regulation 883/2008, performs substantial activities in their state of residence (so 25% or more of his duties in that jurisdiction), all activities performed globally must be considered.

This ruling applies whenever two or more EEA Member States (and Switzerland) of work are involved. Because all global activities must now be considered, this ruling could significantly impact employees working in multiple member states and third countries; such third country working could, for example, mean that there is no longer ‘substantial activity’ undertaken in the individual’s home jurisdiction and the social security liability therefore transfers (typically) to the country of legal employment.

Why this matters and what could it mean for employers?

Social security contribution rates differ significantly throughout the EEA and hence, any change to someone’s social security contributions position could impact employer budgets significantly. To use one simple example, the core employer social security contributions charge in Switzerland is 6.4%, whilst equivalent employer liabilities in France & Italy can be in the region of 40% of an employee’s total salary.

In addition, one needs to realise that the European Court of Justice’s ruling in this case isn’t officially ‘new law’ – rather it is simply clarification and confirmation of what the law has always been. As such, it is quite possible – and this will only become clear over time – that social security authorities (at least in some jurisdictions), may review historical cases and look to impose employer and employee social charges on a retroactive basis.

Wider questions raised by the ruling that now need clarification

Many advisors and social security authorities were surprised by this ruling. It is not clear what steps the authorities will generally do in this regard, however, some of the queries and concerns which and will need to be resolved on a going forward basis are:

Many advisors and social security authorities were surprised by this ruling. It is not clear what steps the authorities will generally do in this regard, however, some of the queries and concerns which and will need to be resolved on a going forward basis are:

1. It is not clear how this ruling will apply to EU/UK multi-state workers. Whilst the social security rules within the Trade & Cooperation Agreement are substantially similar to the core EEA regulations, they are not identical, and the UK is following Brexit officially a ‘third country’. It is possible that member states will, for simplicity reasons as much as anything, simply assume this ruling also applies to UK-related working, but this is not clear, and different interpretations may be taken by different social security authorities on this point.

2. How will working time in third countries be verified? Will countries need to change the application process, for example, to provide information about third country working (this is typically not required under the traditional A1 application process), and will social security authorities require employers to track third country working more pro-actively and provide ‘evidence’, for example, in the case of future social security reviews?

3. What will the impact be on company staffing costs and budgets? This is perhaps a particular issue, if countries do look to impose the regulations on a retroactive basis.

4. Will the EU’s 2023 Framework Agreement on Teleworking, rules which came in much later than the core EU regulations on social security (which date back to 2008) and which can impact whether the 25% threshold applies or not in certain circumstances, be impacted by these changes?

What should employers do now?

Employers with significant numbers of multi-state workers should review these individuals’ working patterns to clarify whether they have third country workdays, assess potential impacts, and estimate the budgetary implications for the company. In some cases, employers might find that it provides a ‘win’, in that individuals may ‘drop out’ of high social security regimes into those with lower social charges.

In addition, those employers who have individuals who could be impacted by these changes might wish to consider what ‘work arounds’ they may be able to introduce on a going forward basis. For example, whether it is possible for certain individuals to spend more time working from their home jurisdiction in future than has historically been the case, so that they continue to exceed the 25% threshold even including any third country workdays which continue to be required?

If you have employees working across borders in the EEA or Switzerland, now is the time to act.

Would you like to know more?

If you would like to discuss any of the above, please speak to your usual Blick Rothenberg contact or Robert Salter using the form below.