Transnational secondment guide: why you need an A1 form

As globalization continues to reshape the business landscape, companies are increasingly looking for ways to expand their operations beyond their home countries. One approach that has gained popularity in recent years is transnational secondment, a temporary work arrangement that involves sending an employee from one country to another.

What does transnational secondment mean?

Transnational secondment is a temporary work arrangement that involves sending an employee from one country to another, usually within the same company or corporate group. During the secondment, the employee, also known as a “detached worker” or “secondee,” remains employed by their home country employer while working in the host country for a set period of time. This arrangement is subject to various legal and regulatory frameworks at both national and international levels, including labor laws, tax laws, and immigration laws.

To whom is this law addressed?

The transnational secondment or detachment law applies to enterprises that operate across borders, specifically those established in a member state other than Romania, or in the territory of the Swiss Confederation. These enterprises may second employees to the territory of Romania, subject to certain conditions provided by law. 

Similarly, enterprises established in Romania may second employees with whom they have established employment relationships to a member state other than Romania or the Swiss Confederation, provided they meet certain conditions. This law is designed to regulate the cross-border provision of services and ensure that employees’ rights are protected regardless of where they are working. 

By providing clear guidelines and requirements for secondment, the law aims to facilitate cross-border trade and promote fair labor practices. In order to ensure that your organization complies with the legislation you might need to get a tax and labor professional to help you.

General aspects

When employees are seconded from Romania for transnational service provision, they are entitled to certain working conditions established by the legal and administrative acts, collective agreements, or arbitration awards of general application. These conditions apply regardless of the law governing the employment relationship.

This includes multiple aspects such as remuneration, working hours, overtime, health and safety at work, and non-discrimination. These provisions aim to ensure that seconded employees are not disadvantaged in terms of their working conditions while working abroad. By benefiting from these rights, these employees can work under better and fairer conditions despite being employed in a foreign country.

These are the main aspects that should be included:

a) The maximum duration of working time and the minimum duration of rest periods;

b) The minimum duration of paid annual leave;

c) The applicable remuneration in a member state of the European Union, other than Romania, or in the Swiss Confederation, including the payment for overtime hours, with the exception of the contributions provided by Law no. 1/2020;

d) The conditions for making employees available, especially by temporary employment agencies;

e) Health, safety, and hygiene at work;

f) Protective measures applicable to working conditions for pregnant women or those who have recently given birth, as well as for children and young people;

g) Equality of treatment between men and women, as well as other provisions relating to non-discrimination.

h) The conditions regarding the accommodation of employees when offered by the employer to employees sent temporarily to perform work or tasks corresponding to their job duties at a location other than their usual place of work;

i) Allowances or reimbursement of transportation, accommodation, and meal expenses for employees who are required for professional reasons to travel to and from their usual place of work in the member state where they are posted or in case they are temporarily sent by their employer from their usual place of work to another location, in accordance with the legislation or the applicable collective bargaining agreement in the host state.

Transnational detachment requires an addendum

When an employer sends an employee to work in another country, they must prepare an addendum that outlines the terms of their detachment. This addendum includes several key components, including the employee’s entitlements to remuneration in accordance with the host country’s laws, the total amount of remuneration granted during the detachment period, and any allowances or expenses that must be reimbursed. Additionally, the addendum must include information about the national official single website created by the host Member State as required by Directive 2014/67/EU.

Here is the whole list of requirements as found in the Romanian labor legislation:

a) the components of the remuneration to which the employee is entitled, in accordance with the applicable legislation in the host Member State, and their level;

b) the total amount of remuneration granted to the employee during the detachment period, with a separate indication of the specific detachment allowance, where applicable;

c) the actual expenses generated by the detachment, such as transportation, accommodation, and meals, as well as the method of granting or reimbursing them, and the method of ensuring transportation, accommodation, or meals, as the case may be;

d) the link to the national official single website created by the host Member State in accordance with Article 5(2) of Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services and amending Regulation (EU) No 1024/2012.

What is an A1 form and why do you need it?

The A1 (previously known as the E101 form) form is a document that verifies that social contributions have been paid in the worker’s country of origin, Romania. It is used for employees who are posted in an EU member state or who work in multiple European countries. This document ensures compliance with social security legislation and protects the rights and benefits of the worker. This document guarantees your affiliation and that of your family members who rely on you to the home country’s social security system for up to two years.

In the absence of the A1 form, or proof of its procurement, host country authorities will mandate enrollment into the social security system of the host country. As a consequence, corresponding contributions for the same will have to be paid in the host country. This policy applies to individuals establishing temporary employment or conducting short-term business in a foreign location. Failure to comply with this regulation may lead to legal action being taken against the defaulter.

To summarize, a transnational secondment refers to when an employee temporarily works in another country within the same company or corporate group. During this period, the employee must be compensated by the host country and comply with applicable labor, tax, and immigration laws. Such laws ensure that the rights of employees are safeguarded and that they are not discriminated against in terms of their working conditions while working abroad. This arrangement is commonly used by multinational corporations and promotes international career development, knowledge sharing, and cultural exchange.