CJEU clarifies 'substantial part' in social security
23/12/25
On 11 December 2025, the Court of Justice of the EU (CJEU) provided clarity on evaluating if an employee working across multiple countries carries out a "substantial part" of their duties in their home country. The key issue was whether work done outside the EU, EEA, and Switzerland should be factored into this evaluation. This decision is crucial for employers with staff who have international roles, especially when some of their work occurs in non-EU countries.
The Case
An employee living in Germany works for a Swiss company. Each quarter, he spends about 10.5 days working in Germany, another 10.5 days in Switzerland, and the rest in countries outside the EU, EEA, and Switzerland, referred to as "third countries." The monthly salary remains constant, regardless of the work location. Therefore, the number of hours worked is crucial in determining the applicable social security system.
The German social security authority chose to ignore work done in third countries. By focusing only on work in Germany and Switzerland, they concluded that the employee spent 50% of his working time in Germany. As a result, German social security laws were considered applicable.
However, the initial court ruling stated that all paid work, including that in third countries, should be part of the evaluation. When these activities are included, the time spent working in Germany drops to about 16% of the total.
Preliminary questions and the 25% threshold
When employees work across multiple countries, the guiding principle is straightforward: they're covered by social security in their home country if they perform a significant portion (25% or more) of their work there. If they don't meet this threshold, social security typically shifts to the country where their employer is based, assuming there's just one employer involved.
The assessment of whether a substantial portion of work is done in the home country is strictly based on clear, measurable criteria. This includes the hours worked and the pay linked to activities in the country of residence. If less than 25% of work is done there, it suggests that the work isn't substantial enough for coverage.
The CJEU has underscored the importance of a strict and focused assessment. Factors like where someone lives, where their business is, or any organisational or practical ties to a country shouldn't influence this evaluation. The CJEU also clarified that this assessment should look ahead, considering the expected work over the next year, rather than relying on past work patterns.
CJEU response
When determining if a significant portion of an employee's work is carried out in the home country, the CJEU highlights the importance of considering all activities, even those in other countries.
The regulation's wording emphasises "all activities," and past rulings back this comprehensive view.
In this scenario, the work done in Germany, which is about 16%, isn't enough to be deemed substantial. Since the employee works for a single employer based in Switzerland, Swiss social security laws are applicable.
What does this mean for your organisation?
Understanding where your employees work is essential for employers. Knowing the exact location of your employees' work helps you identify the country where they are covered by social security and understand your responsibilities as an employer. This involves documenting workdays not just in the home and employer's country, but also in other countries, including third countries. By actively tracking and recording all relevant workdays, you eliminate uncertainty and potential risks. This approach keeps you compliant and ensures your employees are correctly insured, promptly and accurately.
Contact us
Follow us
