Employees traveling on business trips can completely lose the right to unemployment benefits or sickness benefits!
Fines of DKK 27,000–37,000
It is the company that receives fines ranging from DKK 27,000 to 37,000 from various countries if the employee cannot present a valid and correct A1 certificate. However, the fine is collected directly from the employee on the business trip – which is unpleasant!
In 2017, EU countries were required to introduce a new common communication system called EESSI to facilitate communication and data exchange between countries – especially in connection with increased controls. This system was scheduled to be completed by autumn 2019, and Denmark has also implemented it at Udbetaling Danmark.
Unemployment and sickness benefits may be denied by unemployment insurance funds
The biggest problem for employees is that unemployment insurance funds require proof that the employee was covered by Danish social security during business trips abroad – otherwise, the employee may face difficulties receiving unemployment or sickness benefits later. This was confirmed, for example, by the Danish organization Ledernes Hovedorganisation on February 1 in their publication “Jobs Abroad.”
Lack of A1 certificate may lead to social security payment demands
Relocare assesses that companies cannot avoid responsibility, as they are responsible for applying for A1 certificates for their employees. If problems arise, it is the company that sent the employee on the trip. Companies may also face other issues due to missing or incorrect A1 applications, including demands from the visited country for payment of social security contributions, which in some countries can be as high as 36% on top of the salary. This is a significant tightening of rules for business travelers, and it is becoming increasingly clear that individual EU countries expect companies to respect their regulations when carrying out work within their borders.
Relocare Compliance App developed to assist employees and companies
In 2018, Relocare received half a million DKK from the Innovation Fund to develop an app to help companies apply for continued Danish social security coverage when traveling on business – not just in Denmark, but across all EU and EEA countries. The solution, called the Social Security App, is ready with data management foundations for all Europe and the EEA countries. It can track confirmed business trips and calculate the percentage rate relative to the employee’s employment basis (part-time/full-time) for companies located in all EU and EEA countries. Based on this, companies or employees can complete correct A1 applications and keep track of where employees are, thereby also optimizing compliance with other EU requirements such as the Posted Workers Directive. With this newly developed app, companies and employees can easily manage their social security obligations and update authorities properly.
The Relocare Compliance App is user-friendly and simplifies the application process, ensuring that both the employee and company comply with the law. It helps employees track how many days they have spent in each country and whether they have exceeded their allowed limits.
The app sends notifications or warnings if an employee enters a country without having applied for A1, and it provides an overview of the countries for which A1 has been applied. Companies can also manage and submit A1 applications on behalf of employees through the app. Relocare has developed a fully automated A1 application process for Denmark and Sweden. For Denmark, they created an automatic form-filler robot that takes data from the Compliance App and fills in the fields when logging in to Virk.dk with NemID. This allows companies to send multiple applications within minutes and avoid situations where employees cannot receive benefits 12 months later. In Sweden, Relocare has a fully automated solution for submission to Forsikringskassan. They are also working on solutions for Poland and France, with other EU/EEA countries to follow.
For more information, visit relocaretech.com or feel free to call.
