The multi-state A1 certificate myth: Why it's not a blanket solution for business travel

Many companies operating across the EU believe they've found an elegant solution to social security compliance: obtaining multi-state A1 certificates for employees who are planning to do occasional travel between member states. We often encounter employers who are convinced that:

"Our employees travel to Austria 2-3 times a year for client projects, so a long-term A1 makes more sense than individual ones"

"We have 60 employees traveling from time to time to different EU countries – surely we can get one multi-state A1 for each of them to cover all trips"

While this approach might seem efficient, it's actually a compliance risk in most cases that could expose your organization to unwanted scrutiny and potential penalties.

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Understanding Article 13 vs. Article 12: A critical distinction

The confusion often stems from misinterpreting two key articles of EU Regulation 883/2004:

• Article 13 governs cases where employees "normally pursue an activity in two or more Member States". It's designed for situations where working across multiple countries is a regular part of the job. This article determines which country's social security legislation applies based on where substantial work is performed.
• Article 12, on the other hand, specifically covers "posted" workers – employees temporarily sent to work in another member state for a specific duration (up to 24 months). This is the article that typically applies to business trips and other temporary assignments.

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The true purpose of multi-state A1 certificates

Article 13 was designed for employees whose regular work pattern involves performing substantial activities in multiple countries. Let's break down the key requirements in detail:

1. Contractual specification

• The multi-state work arrangement must be identifiable in the employment contract  
• This means the contract should clearly outline that the employee's role involves regular work in specific member states
• Ad-hoc arrangements or verbal agreements are not sufficient

2. Normal pursuit of activity

• The work pattern must represent consistent and habitual employment across member states
• This means regular, planned work activities, not occasional or needs-based travel
• The arrangement should be part of the employee's standard working pattern, not an exception

3. Substantial activity

• The work in each country must constitute a meaningful portion of the employee's duties
• This typically means regular, ongoing responsibilities in multiple locations
• Occasional meetings or short-term projects don't qualify as substantial activity

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Why business trips don't usually qualify

Business trips, even frequent ones, typically don't meet these criteria because:

• They are typically ad-hoc arrangements rather than contractual obligations
• They represent temporary deviations from normal work patterns rather than the "normal pursuit of activity"
• They fall under Article 12, which specifically covers "posted" workers on temporary assignments

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Legal Precedent: What Courts Say About "Normal Pursuit"

Court decisions have helped clarify what qualifies as "normally pursuing an activity in two or more Member States". A notable case involving Format, a Polish company, established several key principles:

1. The work pattern across different countries should be a part of the regular employment arrangement
2. Long continuous periods (12+ months) in a single country do not qualify as multi-state work, as they resemble posting situations

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These interpretations further support why typical business travel patterns don't qualify for multi-state A1 certificates:

• Business trips do not follow a regular pattern of work
• They represent short-term presence rather than continuous work periods

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The risks of misapplying multi-state A1 certificates

Using multi-state A1 certificates inappropriately creates several risks:

1. Legal non-compliance: Social security authorities can revoke incorrectly issued A1 certificates, as supported by the confirmation of German and Austrian authorities in WorkFlex's original research.  
2. Permanent establishment risk: By declaring regular work activities in another country through a multi-state A1 that’s obtained for the wrong type of situation, you may inadvertently trigger permanent establishment concerns, leading to unexpected tax obligations.
3. Double social security liability: If your A1 certificate is revoked, you might face retroactive social security obligations in multiple countries.

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Making compliance simple with WorkFlex

The correct solution is straightforward but requires proper processes:

1. Obtain individual A1 certificates under Article 12 for each business trip or workation
2. Ensure these certificates are obtained or at least applied for before the travel begins
3. Maintain proper documentation of all cross-border work activities

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While this might sound administratively burdensome, modern solutions like WorkFlex automate the process, making it seamless to:

• Generate trip-specific A1 certificates automatically when travel is requested
• Ensure compliance without adding administrative overhead
• Maintain proper documentation for all cross-border work

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Conclusion

While multi-state A1 certificates can be appropriate in specific situations where cross-border work is required, they're not suitable for most business travel scenarios. For most business trips, individual A1 certificates remain the only compliant option. The risks of misapplying these certificates far outweigh any perceived administrative benefits. With automated solutions available, there's no reason to compromise on compliance.