Legal Alerts/4 Jan 2023
Employers now required to apply for A1 certificates also for short-term work-related travel
The Finnish Centre for Pensions has revised its policy regarding A1 certificates and has started to require that Finnish employers apply for A1 certificates for their employees also for short-term work-related travel within the EU and the EEA Member States, Switzerland and the United Kingdom. In practice, employers will have to apply for an A1 certificate also for one-day business trips abroad.
Why is it important for employers to apply for an A1 certificate?
The A1 certificate determines which country's social security system the employee is covered by. If the employee's social security status is transferred abroad to the country of temporary employment, the employer is obliged to pay occupational pension contributions and other social security contributions to that country of employment. In the absence of an A1 certificate, the authorities of the country of employment may require social security contributions to be paid for the work period abroad. Moreover, they may impose a sanction for a violation of social security contribution payments based on national legislation.
The EU Member States have increased the supervision of the appropriate use of A1 certificates. In some cases, for example, employees are not allowed on worksites without presenting an A1 certificate.
Most travel insurances taken out by employers or employees themselves require that the insured is covered by Finnish social security. If the employee does not have a valid A1 certificate and their social security is transferred abroad to the country of temporary employment, their travel insurance coverage might be insufficient while working abroad. If an employee becomes seriously ill or is involved in an accident while travelling for work, this may pose a considerable risk to the employer and to the employee personally.
How to apply for an A1 certificate?
Employers can apply for the A1 certificate at least six months before the commencement of work-related travel. If the employer has not applied for the A1 certificate before the work-related travel, it is also possible to apply for it retrospectively.
An A1 certificate can be applied for a single business trip or, if the employee travels frequently, an A1 certificate can be applied for and issued for a fixed period of up to two years. If the employee travels to multiple countries, the A1 certificate can also be extended to cover the whole of the EU/EEA, Switzerland, and the United Kingdom.
If the application for the A1 certificate is filed through the online services of the Finnish Centre for Pensions, the application will be processed automatically and the certificate can even be granted within one day. Sometimes, however, the processing may require further information from the employer or the employee, and in that case the estimated processing time is approximately four weeks.
What measures do employers need to take due to the changed policy?
We recommend that employers whose employees regularly travel abroad revise their international travel policies and include guidelines of the process for applying for an A1 certificate to the policy.
It is also advisable to allocate resources at the workplace for the administration of the A1 certificates and to the applications processes.
If you have any questions about the new course of conduct or need assistance with work abroad, please contact the undersigned or other members of our Employment team.