For assignment of employees from Germany or to Germany the amounts of social security contributions are significant costs. Also, the employee himself may have personal preferences to remain liable to his national social security system.

Therefore, in the following we would like to show regulations by law that allow a liability to the home country social security scheme also during assignment.

In general, regulations can be found in national (German) law, Social Security Treaties and multilateral treaties. At first it has to be checked if multilateral treaties apply. If they do not apply, maybe a Social Security Treaty is applicable. At least German law is applicable if neither multilateral treaties nor Social Security Treaties apply.

 

 

1. Multilateral Treaties

For assignments to/from Germany the most important multilateral treaty is the EU regulation 1408/71. This regulation applies for employees seconded within the member states of the EEA. Member states are

Austria

Belgium

Cyprus

Czech Republik

Denmark

Estonia

Finland

France

Germany

Great Britain

Greece

Hungary

Iceland

Ireland

Italy

Latvia

Lithuania

Liechtenstein

Luxemburg

Netherlands

Norway

Poland

Portugal

Slovakia

Slovenia

Spain

Sweden

Furthermore, the EU regulation 1408/71 is only applicable for employees that are nationals of an EEA member state, refugees or stateless persons.

The EU regulation 1408/71 applies to all parts of social security (pension insurance, health insurance, unemployment insurance, care insurance).

According to Article 14 EU regulation 1408/71 seconded employees remain liable to the social security system of the country they are assigned from if the following critirias are met:

 

If the duration of assignment exceeds 12 months due to unforeseeable circumstances, there is a possibility to apply for an extension of again 12 months. This application has to be filed before the first period of assignment ends.

If the above mentioned criterias are not met, there is a possibility to apply for an exception according to Article 17 EU regulation 1408/71. Then the employee has to make believe that there are significant reasons for him to remain liable to his home country social security system.

You can find a full text version of the EU regulation 1408/71 here.

 

2. Social Security Treaties

If the EU regulation 1408/71 does not apply, the Social Security Treaties have to be checked.

These treaties apply, if an employee is assigned from one of the treaty states to the other. With some exceptions the nationality of the employee is regardless.

Below for every treaty it will be shown under which conditions it is possible to remain in the home country social security system.

Furthermore, we want to point out that if certain criterias are not met there is a possibility to apply for an exception at the authorities of both countries.  Then the employee has to make believe that there are significant reasons for him to remain liable to his home country social security system. Both authorities have to agree.

If the Social Security Treaties are only decisive for special parts of the social security system (i.e. only for pension insurance) it may be  possible that the employee becomes liable to the other parts of the social security system in both countries. 

2.1. Chile

The Social Security Treaty Germany/Chile is in only applicable to the pension and unemployment insurance. For health and care insurance national law applies. 

According to Article 7 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- The duration of assignment does not exceed 36 months and

- before the assignment the employee is normally employed in the territory of the state he is assigned of.

If the assignment exceeds 36 months the regulations of the home country still apply if the employer files an application togehter with the employee and the national authorities of both countries agree.

 

2.2. Israel

The Social Security Treaty Germany/Chile is in only applicable to the pension and health insurance. For unemployment and care insurance national law applies. 

According to Article 6 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- Before the assignment the employee is normally employed in the territory of the state he is assigned of and

- he is assigned from a company to work for the companies duty.

As there is no time frame included in this treaty, the maximum duration of assignment is determinded by national law.

 

2.3. Former Yugoslavia

The Social Security Treaty Germany/Yugoslavia is still valid for the sucession states Federal Republik of Yugoslavia, Bosnia-Herzegowina, Croatia, Macedonia and Slowenia.

It is in only applicable to the pension insurance. For unemployment, health  and care insurance national law applies.

According to Article 6 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- Before the assignment the employee is normally employed in the territory of the state he is assigned of and

- he is assigned from a company to work for the companies duty.

As there is no time frame included in this treaty, the maximum duration of assignment is determinded by national law.

 

2.4. Canada/Quebec

The Social Security Treaties Germany/Canada and Germany/Quebec are in only applicable to the pension insurance. For unemployment, health and care insurance national law applies. 

According to Article 7 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- The duration of assignment does not exceed 60 months and

- before the assignment the employee is normally employed in the territory of the state he is assigned of.

If the duration of assignment exceeds 60 months the employee can only remain liable to the home country social security scheme due to the exeption clause (see above).

 

2.5. Morocco

The Social Security Treaty Germany/Morocco is in only applicable to the pension, unempoyment and health insurance. For care insurance national law applies. 

According to Article 7 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- The employee is a German or Moroccan national, a refugee or a stateless person and

- the assignmend does not exceed 36 months and 

- before the assignment the employee is normally employed in the territory of the state he is assigned of and

- he is assigned from a company to work for the companies duty.

For nationals of other countries the national (German/Moroccan) law applies.

If the assignment exceeds 36 months the regulations of the home country still apply if the employer files an application togehter with the employee and the national authorities of both countries agree.

 

2.6. Switzerland

The Social Security Treaty Germany/Switzerland is in only applicable to the pension, unempoyment and health insurance. For care insurance national law applies. 

According to Article 6 section 1 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- The duration of assignment does not exceed 24 months and

- before the assignment the employee is normally employed in the territory of the state he is assigned of.

If the duration of assignment exceeds 24 months the employee can only remain liable to the home country social security scheme due to the exeption clause (see above).

 

2.7. Turkey

The Social Security Treaty Germany/Turkey is in only applicable to the pension and health insurance. For unemployment and care insurance national law applies. 

According to Article 6 section 1 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- The employer is a company resident in one of the two treaty states and

- the assignment is limited in advance

There is no time frame, but the assignment must not be unlimited.

 

2.8. Tunisia

The Social Security Treaty Germany/Tunisia is in only applicable to the pension and health insurance. For unemployment and care insurance national law applies. 

According to Article 7 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

- The employee is a German or Tunisian national, a refugee or a stateless person and

- the assignmend does not exceed 12 months and 

- before the assignment the employee is normally employed in the territory of the state he is assigned of and

- he is assigned from a company to work for the companies duty.

For nationals of other countries the national (German/Tunisian) law applies.

If the assignment exceeds 12 months the regulations of the home country still apply for a maximum of another 12 months if the employer files an application togehter with the employee before the ending of the first 12 months and the national authorities of both countries agree.

 

2.9. USA

The Social Security Treaty Germany/USA is in only applicable to the pension  insurance. For unemployment, health and care insurance national law applies. 

According to Article 6 section 2 of the treaty the employee can remain liable to the home country social security system if the following criterias are met:

 The duration of assignment does not exceed 60 months and

- before the assignment the employee is normally employed in the territory of the state he is assigned of.

If the duration of assignment exceeds 60 months the employee can only remain liable to the home country social security scheme due to the exeption clause (see above).

If the employee remains liable to the German social security scheme, he doesn´t have to contribute to the medicare Part A.

 

 

3. National (German) law

German law applies if the employee is assigned from/to Germany and neither multilateral regulations nor Social Security Treaties apply. It also applies for other parts of the social security system if a Social Security Treaty is only valid for some parts of the social security system (i.e. pension insurance)

German regulations regarding social security are determined in SGB IV (Social Security Law IV). Article 4 determines liability to the German social security scheme if an employee is assigned from Germany to a foreign country, Article 5 liability to a foreign social security scheme if an employee is assigned from a foreign country to Germany. The nationality of the employee is regardless.

3.1. Article 4 SGB IV (so-called "Ausstrahlung")

According to Article   4 SGB IV an employee assigned from is still liable to the German social security scheme if there is an

Assignment according to German social law is the movement of an employee to a foreign country on direction of the employer. The employee can be employed only for assignment purposes, but he has to be integrated in  the German country  (or has special relationships to Germany) during and after his assignment. 

The employee has to remain in the organizational structure of his home company and has to follow the directives of his home company. The claim of salary payment has to be against his home company. The salary has to be paid by - or on behalf of - the home company and is not borne by a foreign company or permanent establishment. 

The duration of the assignment can be limited due to the character of the work or due to the assignment contract. A special time frame is not determined by law, but the assignment must not be unlimited and the duration has to be manageable.

 

3.2. Article 5 SGB IV (so-called "Einstrahlung")

According to Article  5 SGB IV an employee assigned to Germany is still liable to the foreign social security scheme if there is an

Assignment, foreign employment contract and temporary limitation are determined corresponding to Article 4 SGB IV ( see 3.1.)

 

 

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