Employers operating across EU borders face a persistent challenge in ensuring EU social security compliance: understanding which Member State’s social security regime applies when an employee performs work in more than one country.
Recent guidance from the Court of Justice in the judgment of 4 September 2025 (Case C-27/24) clarifies the term “substantial activity” under Regulation 883/2004 and Regulation 987/2009.
This clarity is crucial for multinational employers, HR professionals, and tax and social security advisors striving to ensure correct compliance for EU social security cross-border workers.
Understanding the judgment: facts, legal basis and implications
The Court of Justice’s ruling in Case C-27/24 (judgment of 4 September 2025) concerns a dispute over the applicable social security legislation for a person working in multiple Member States. It addresses both procedural irregularities and substantive interpretation of EU law.
An individual residing in one Member State was employed by a company based in another, while also carrying out duties in a third country. Less than 25% of the individual’s total working time and remuneration originated in their state of residence.
Despite this, the social security institution in the residence state issued an A1 certificate declaring its legislation applicable. Authorities in the host Member State contested this, asserting that the certificate was based on incorrect information and that their own system should apply. They proceeded to enroll the worker in their national scheme without prior coordination or seeking cancellation of the certificate.
The Court examined several provisions:
- Article 13(1) of Regulation 883/2004, which outlines that a worker engaged in multiple Member States falls under the legislation of their residence only if a substantial part of their work is carried out there
- Articles 14(8) and 14(10) of Regulation 987/2009, which quantify ‘substantial’ as more than 25% of time or remuneration
- Article 5 of Regulation 987/2009, establishing the binding nature of A1 certificates unless formally revoked. The principle of loyal cooperation under Article 4(3) TEU was also reinforced, emphasising Member States’ obligation to collaborate in good faith.
The Court concluded that the 25% threshold must be assessed solely on the basis of working time and/or remuneration, and that the relevant assessment period is twelve months. Additional qualitative elements such as the type of tasks performed or intentions behind work arrangements are not to be considered.
The judgment underlines that A1 certificates cannot be disregarded unilaterally, and that cooperation between institutions is essential to avoid dual obligations and legal uncertainty.
How to determine ‘substantial part of the activity’
The judgment provides useful clarification on what counts towards the 25% threshold. Only time spent physically working in the state of residence and the remuneration attributable to such work can be taken into account.
Activities such as administrative preparation, informal communication, or incidental tasks conducted at home are not included. This helps create a more objective and predictable assessment framework.
For employers and advisors, this clarification helps distinguish between genuine, measurable work performed in a given state and more peripheral or supportive duties.
The emphasis on tangible, remunerated activity provides a clearer legal standard and limits the scope for inconsistent interpretation by authorities across the EU.
Practical impact for employers and global mobility teams
The ruling brings a welcome degree of legal certainty for international employers, but also underscores the importance of accurate planning and documentation. Knowing that social security legislation is determined strictly by quantitative measures makes it easier to assess eligibility, but also demands robust tracking of work patterns and payroll allocations.
Mistakes in classification can result in significant consequences, including retroactive contributions, invalid postings, or the need to manage simultaneous obligations in more than one jurisdiction. Moreover, when national authorities do not align on responsibilities, the lack of coordination may lead to sanctions or reputational risk.
For global mobility teams, this highlights the necessity of close collaboration between HR, tax, payroll and legal departments to ensure compliant and defensible cross-border employment structures.
Crossbord’s approach to EU social security compliance
Crossbord offers a comprehensive solution to the challenges posed by cross-border employment. Our model is built around full regulatory alignment, ensuring that your workforce is correctly affiliated under EU social security coordination rules. We manage the entire A1 certificate and registration process on behalf of the employer, maintaining both timeliness and accuracy.
One of the most valuable aspects of our solution is the ability to reduce legal and financial exposure. Errors in affiliation can lead to dual coverage, loss of benefits eligibility, or investigations by national authorities.
Our approach safeguards both the business and its employees as we proactively mitigate risks through:
- structured analysis of work patterns and remuneration
- robust registration procedures
- continuous monitoring.
In addition, we provide thorough documentation and audit support. Every case we handle includes a complete decision log and audit trail, which helps our clients respond confidently to inquiries or inspections. Our platform supports data-driven decisions and ensures that each step of the compliance journey is transparent and verifiable.
Our methodology follows a simple but effective process:
- First, we conduct a detailed analysis of the employee’s situation.
- Then we determine the appropriate social security legislation and manage the registration with the competent authority.
- Finally, we provide ongoing compliance support, including monitoring of activities and adjustment of status as needed. This ensures alignment even as circumstances evolve.
For instance, consider an employee residing in Germany but working predominantly in Denmark. With only 20% of activity taking place at home, the German authority’s legislation does not apply. Crossbord identifies this, facilitates registration in Denmark, and handles all related reporting. The result is a fully compliant setup that removes administrative burdens from both employer and employee.
Final thoughts and recommendations
The judgment in Case C-27/24 reinforces core principles of EU social security coordination:
- clarity of applicable legislation
- the integrity of institutional cooperation
- protection against dual coverage.
It also provides a practical benchmark for employers navigating increasingly flexible and cross-border work arrangements.
Crossbord helps clients translate legal certainty into operational efficiency. With our assistance, employers gain confidence in their compliance, streamline their administrative processes, and reduce their risk exposure.
Whether you are navigating a single complex case or developing a company-wide mobility strategy, Crossbord provides the expertise and infrastructure needed to manage cross-border compliance effectively.
Optimise your eu social security compliance
Whether you are already a Crossbord client or exploring international compliance solutions, this ruling is a clear reminder of the importance of structured, employer-led social security planning.
Let us help you navigate the complexities and safeguard your workforce across Europe.
