Landmark CJEU ruling on EU social security coordination: global work patterns count
15 Dec 2025
The Court of Justice of the European Union (CJEU) has delivered an important ruling on how to determine the applicable social security legislation for employees who work in two or more Member States, as well as in third countries. It held that the employee’s worldwide activities, including work performed in third countries, must now be counted when determining whether they perform a substantial part of their work in their Member State of residence. This marks a clear break with the current practice in several Member States where authorities only look at activities within the European Economic Area and Switzerland for this assessment.
What the Court decided
The case concerned a highly mobile employee residing in Germany and employed by a Swiss company, who worked a minority of their total working time in Germany (16%) and Switzerland (16%), and the remainder in several third countries. The key question was which social security legislation applied under Regulation (EC) no. 883/2004 on the coordination of social security systems and its implementing Regulation (EC) no. 987/2009.
Under those rules, where someone normally works in two or more Member States for one employer, they are subject either to the legislation of the Member State of residence, if they perform a substantial part of their activities there, or, if this is not the case, to the legislation of the Member State where the employer has its registered office. A ‘substantial part’ means a quantitatively significant part of the employee’s activities, normally assessed by reference to working time or remuneration, with 25% as a key threshold. The CJEU has now held that, when calculating this 25% threshold, all activities carried out worldwide must be considered, including work performed in third countries.
Why this matters
Several Member State institutions, including the Belgian social security authorities, have so far only taken into account the activities performed in the EEA and Switzerland when deciding whether at least 25% of the activities takes place in the employee’s Member State of residence. Taking this approach, an employee residing in Germany and working 16% of their time for a Swiss employer in Germany, 16% in Switzerland and the remainder in third countries, would be subject to the German social security legislation. Indeed, the employee performs 50% of the part of the employee activities performed the EEA and Switzerland from their Member State of residence, clearly surpassing the 25% threshold.
Following the CJEU judgment, this approach is no longer tenable. To determine whether the employee in our example performs a substantial part of their activities in the Member State of residence, the worldwide employment must now be considered. As the employee only works 16% of their total worldwide activities in their country of residence, the 25% substantial threshold isn’t met. The consequence is that, in those cases, the social security legislation of the Member State where the employer is located – in our example: Switzerland – will apply instead of the legislation of the employee’s Member State of residence.
Impact of the judgment
This change is likely to particularly affect companies with a highly mobile workforce such as global sales staff, technical experts and senior executives, who work in more than one Member State, including the Member State of residence (whether from home or otherwise) and also work extensively in third countries. For these employees, taking into account work performed in third countries will reduce the likelihood that the legislation of the Member State of residence applies and will instead favour the legislation of the Member State where their employer is based.
As far as teleworking in the Member State of residence is concerned, the Framework Agreement on cross-border work currently doesn’t seem to take into account work performed in third countries in order to determine whether less than 50% of the employee’s employed activities are performed in their state of residence. It will be important to get clarity on whether the current CJEU judgment will likewise impact the calculation of activities performed in the state of residence under the Framework Agreement.
Practical considerations for companies
Going forward, companies will need to map the full working pattern of their highly mobile cross‑border staff who perform part of their activities in their Member State of residence, including time spent in third countries, when assessing the applicable social security legislation in the EEA and Switzerland. Note that it will be more difficult for EU social security institutions to verify the working patterns in third countries compared to the ones in other Member States, for which robust collaboration between institutions exists.
It’s also unclear at this point what the impact will be on existing cross-border arrangement and A1 certificates, however, companies might also have to revisit those. Where previous assessments only considered EEA and Swiss activities, a recalculation using worldwide working time or remuneration might reveal that the 25% threshold is no longer met in the employee's State of residence, which would trigger a change of applicable social security legislation to the State where the employer has its registered office. It will be interesting to see how the Member States’ social security institutions will tackle this.
Key takeaways
All worldwide activities now matter when determining whether an employee performs a substantial part of their work in the Member State of residence and companies will have to account for this change going forward.
For globally mobile workers, this will reduce the likelihood that the legislation of the Member State of residence applies and will instead favour the legislation of the Member State where their employer is based. Companies should therefore reassess their cross‑border population, update internal procedures for tracking work patterns and prepare for potential adjustments in social security affiliation.
If you have any questions about this CJEU judgment or its impact on your mobile workforce, don’t hesitate to reach out; we’d love to hear from you!
