What are the consequences of secondment for the employer and employee? If the employee is sent from one European Union member state to another, he will be able to keep the benefits his home country social security scheme abroad. As for the employer who is seconding the employee, he will have to pay the social contributions in full in the home country and may, in some cases, be exempt from social security contributions in the host country (if an international Social Security agreement exists).
Conditions and time limit
The employer is always the one who decides on the secondment. Within the E.U., the European Economic Area and Switzerland, secondment is only possible if the major part of the employers’ economic activity takes place in the home country. Also, an employee cannot be seconded to simply replace another seconded employee.
How long can you be abroad on a seconded status? Within the E.U., the European Economic Area and Switzerland, secondment can last up to 24 months. Elsewhere, maximum length varies from 12 months to 6 years, depending on the existence of Social Security agreements.
Employer obligations: social contributions
The seconded employee keeps the benefit of his home country the social security cover because the employer continues to pay all compulsory social contributions.
No contributions must be payed in the secondment host country if the employee is seconded to a country which has signed an international Social Security agreement with his home country. This exemption only is valid if the employee meets the nationality requirements mentioned in the agreement. The maximum length of secondment must also not yet have been reached.
Seconded status and social security benefits
During his stay abroad, the seconded employee as well as his family keeps the same social security cover as in the home country. Living in an E.U. member state and seconded to another member state? Medical expenses might be prepaid.
- If the employee is seconded inside the European Economic Area, he should apply for the European Health Insurance Card (EHIC). This card allows the holder to access public healthcare providers in the host country and offers cover under the same conditions as local permanent residents.
- If secondment takes place outside of Europe, medical expenses are covered by the employees’ home country social security.
In some countries, the cost of healthcare is extremely high and the employees’ home country cover might be inadequate. Full cover may be obtained by taking out insurance. On his own, the employee can select an individual expatriate insurance. The employer can also decide to protect his employees by taking out collective expatriate insurance.
Pros and cons of seconded status
Many international agreements allow the employer to pay social contributions only in his employees’ home county. As for an employee, seconded status can be quite worthwhile as he won’t lose the benefit of his home country social security cover.
However, one can’t be seconded for ever: employer and employee must stick to the time limit. Also, seconding employees can turn out to be very expensive for the employer as he might have to pay social contributions in the home country as well as in the secondment host country. Depending on the country the employee is sent to, taking out insurance offering full medical cover might simply not be an option.