In today's globally interconnected world of work, cross-border issues play an increasingly prominent role – particularly for corporates with a multi-jurisdictional presence in the European Union. However, in view of the United Kingdom's impending departure from the European Union, questions of structuring in this context have taken on new meaning across the board.(1)?

Companies should always clarify which social security laws apply to employees who are deployed in other countries. For such employees, it is often important to know whether they can remain in the social security system of their home country in order to avoid losing their existing social security accruals.

Within the European Union, the EU Social Security Regulation (883/2004/EC) provides for this in most cases; supplementary regulations are included in EU Regulation 987/2009, which set out the procedure for implementing EU Regulation 883/2004 on the coordination of social security systems. In this context, the legislation of the country in which the employee is performing their work generally applies (the country-of-employment principle; Article 11 (3a) of the EU Social Security Regulation).

An exception to this rule is provided in the case of staff secondments. The social security legislation of the employee's home country applies in the case of secondments lasting up to 24 months (Article 12(1) of the EU Social Security Regulation). This period can be extended if a tripartite exemption agreement is signed with social insurance agencies in both the home and host countries.

Where the cross-border deployment of staff relates to non-EU countries, it is necessary to determine whether a social security treaty with the country in question has been concluded. For example, Germany has treaties in place with Brazil, China, India and the United States. However, the treaties vary in terms of which areas of social security are covered in certain periods.

Where no such bilateral treaty exists, the social security provisions of the home and host states generally apply directly. However, if an employee can remain in the home country's social security system for the duration of their secondment, the law of the host country dictates whether social security contributions must also be made in the host country.

Whether employers and employees can rely on this principle of radiation inwards or outwards primarily depends on where the focus of the employment relationship lies in both legal and actual terms. In this context, it is necessary to pay attention to which establishment (ie, home or host country) the employee is integrated into and which company is responsible for paying their remuneration.

For further information on this topic please contact Hans-Peter Löw or Lisa Müller at Allen & Overy LLP by telephone (+49 69 2648 5000) or email ( or The Allen & Overy LLP website can be accessed at

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