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      On 23 April 2026, the Council of the European Union published proposed changes to the EU rules on social security.1 The revisions are far-reaching and include amendments to the coordination rules that determine which country is responsible for social security in cross-border situations, updates to the benefit chapters (including family benefits, unemployment benefits, and long-term care), and significant changes to administrative procedures and cooperation between authorities in the EU member states. This alert focuses on the proposed changes affecting employees who are sent to work in one other country (posting).

      See KPMG GMS Flash Alert 2026-115 for previous coverage and more information about the procedure for adoption and eventual implementation of the proposed amendments. 

      WHY THIS MATTERS

      Although it will likely be a couple of years or more before these amendments to the EU social security rules take effect after formal adoption, it is not too early for employers to familiarize themselves with the changes, particularly the new procedural rules.

      For posting situations, submitting an A1 application before work in the destination country begins will become critical, not only to establish coverage and obtain exemption from local social security, but also to avoid additional administrative steps, which may be significant if an A1 is not requested before deployment.

      Employers can already start reassessing how they classify cases (posting versus multi-state working) and reviewing their internal processes for A1 applications, as timing and documentation will play a much more important role under the new rules.

      As part of this, organisations could integrate an early social security assessment into existing workflows and put in place a procedure so that A1 applications are submitted before work in another country begins and are ready for the upcoming changes. 

      Revised social security rules for postings

      The legal rules on social security for posted workers are set out in Article 12 of Regulation (EC) No 883/2004 on coordination of social security systems. This provision describes when a posted employee (and a self-employed person) can remain covered by the social security system of the home country while working temporarily in another EU member state. The focus in this publication is on posted employees.

      Substantive rules – key changes to the posting rules  

      Article 12 continues to provide that an employee who normally works in one EU member state for an employer that normally carries out its activities there can be posted to another EU member state for up to 24 months and remain covered by social security in the home country.

      This applies provided that the posted employee is not replacing another person who has already been posted to the host country.

      First, the amendment adds an important clarification to the rule banning replacement of posted workers. It now states that the replacement is possible, as long as the total duration of the posting does not exceed 24 months.

      Example 1:

      Employer in State A sends Employee X to State B to work on a specific project. After 10 months, Employee X leaves and is replaced by Employee Y, who continues the same project in State B.

      Employee Y can be treated as a posted worker and remain covered by social security in the sending state for up to 14 months, so that the total period (X+Y) does not exceed 24 months.

      In other words, in this situation the 24-month limit applies to the posting as a whole, not to each worker individually.

      Second, a “cooling off” period between postings is now included in the legal text. It provides that once a posting to an EU member state has reached the maximum duration of 24 months, at least two months must pass before a new posting to the same EU member state under the home country’s social security coverage can begin. Furthermore, an interruption of a posting is only recognized as such if it lasts at least two months.

      Example 2:

      Employee X from State A is posted to State B for 24 months. Employer A may then post Employee X to State B for a further period of up to 24 months under the home country’s social security coverage, provided that at least two months have elapsed between the two postings. For example, this condition is met if Employee X works in the home country for at least two months after the first posting has ended.  

      Example 3:

      Employee X from State A is posted to State B from 1 January 2025 to 31 December 2026. The posting is suspended on 30 June 2025, and Employee X is back home for six weeks. Employee X resumes work in State B on 15 August 2025. This period does not qualify as an interruption because it is shorter than two months. The posting will therefore be treated as continuous from 1 January 2025.

      Third, the required period of an employee’s affiliation to social security in the posting state is extended from one to three months. Posted workers must have been covered by social security in the sending state for at least three consecutive months immediately before being posted to another EU member state. In addition, workers who are hired with a view to being posted must be already covered by the sending state’s social security system at the time their employment begins. 

      Example 4:

      Employee X works for Employer A in State A and is to be posted to State B. Employee X has been employed by Employer A in State A and covered under State A’s social security system since 1 January. Employer A plans to post Employee X to State B starting on 1 May.

      From 1 January to 30 April, X has been continuously covered by State A’s social security for four months. This satisfies the requirement that a posted worker must have been covered in the sending state for at least three consecutive months immediately before the posting.

      Because X already had this three‑month prior affiliation, the posting from State A to State B can be carried out under State A’s social security rules.

      Administrative procedures – key changes in the posting rules  

      The main legal provisions governing the administrative processes for postings are set out in Article 14 and Article 15 of the Regulation (EC) No 987/2009, which implements Regulation (EC) No 883/2004 on the coordination of social security systems. The revisions proposed for this section are substantial in terms of both scope and content.

      The most far‑reaching proposal concerns the new prior notification requirement for postings. In simple terms, this means that the application for an A1 certificate of coverage must be submitted before the posting begins. No specific deadline is included, which means any time before the posting.

      The requirement about the prior A1 application applies always for activities in the construction sector, and for all other business sectors there is an exemption from prior A1 application when an employee is posted for no more than three consecutive days within a period of 30 consecutive days. If a business trip is subject to the rules on posting, there is no obligation for prior A1 application (for more, see section Other highlights).

      Prior A1 application for posting submitted but pending – what happens?  

      If an A1 application for posting has been submitted, then the responsible institution must provide a confirmation of receipt that indicates that the application has been duly submitted and is processed.

      The confirmation can then be used to demonstrate that the applicant has complied with the prior notification requirement until the A1 certificate is issued.

      The draft text also allows the host state to contact the responsible institution in the home state at this stage if it has doubts as to whether an A1 certificate can be issued.

      No prior A1 application for posting submitted – what happens?  

      If a prior A1 application for posting has not been duly submitted, then the employer has not complied with the procedural obligation in the regulation. This does not automatically lead to a change in social security coverage to the host state, since social security rights are protected in the substantive provisions of the coordination rules and cannot be annulled by a procedural omission.

      However, in the case of non‑compliance with the obligation to submit an A1 application before the posting, the host state may impose administrative sanctions on the employer for that non‑compliance.

      In such a case, the host state should seek information about the posting from the employer and the posted worker and transmit this information to the competent institution in the home state, requesting an assessment of the applicable legislation. If the outcome of that assessment is that the home state’s social security legislation applies, the home state issues an A1 certificate with retroactive effect.

      Should the home and host states disagree about the outcome of the assessment, they must follow the established dispute‑resolution procedure.

      Other highlights

      One of the new definitions introduced in the draft text is a “business trip.” A business trip covers presence in another EU member state for meetings, events, seminars or training, but not the actual provision of services or the delivery of goods there. The text does not elaborate on what is meant by “provision of services.”

      Furthermore, the revised text stipulates that the prior A1 application requirement for posting does not apply to business trips and does not apply to other activities with a total duration of no more than three consecutive days within a period of 30 consecutive days.

      Another noteworthy clarification concerns the construction sector. The draft proposal highlights that, due to the high risk of irregularities in this sector, the exemptions from the posting‑related administrative requirements (with the exception of business trips) do not apply to construction.

      Annex 6 of the proposal provides a broad and functional definition of the construction sector that is not limited to traditional building sites but covers essentially all types of building work. The construction sector includes all building work relating to construction, repair, upkeep, alteration, or demolition of buildings, in particular: 

      • Excavation
      • Earthmoving
      • Actual building work (erection of structures, structural work)
      • Assembly and dismantling of prefabricated elements
      • Fitting-out or installation work (e.g., interior finishes, installations linked to the building)
      • Alterations and renovation
      • Repairs
      • Dismantling and demolition
      • Maintenance and upkeep
      • Painting and cleaning work that forms part of building upkeep
      • Improvements to buildings or structures

      In practical terms, any activity falling within these categories is treated as part of the construction sector under Annex 6, irrespective of whether it is structural, finishing, preparatory, or auxiliary work. 

      KPMG INSIGHTS

      The proposed text for the revision of the coordination rules for social security places a very strong emphasis on posting compared with other coordination mechanisms, and this is broadly consistent with current statistics, which still show that posting dominates in absolute numbers.2 This focus on posting may also reflect the mobility patterns that prevailed when the proposal was first drafted around ten years ago.

      However, there is a clear and significant upward trend in A1 applications for work in two or more countries.

      This steep increase suggests that patterns of cross‑border mobility are shifting away from the traditional model of posting to a single host country and moving more towards multi‑state work arrangements, where employees regularly work in several countries rather than being sent on a classic posting to just one.

      For employers, a key takeaway is to systematically assess each case of cross‑border work against two main categories of the coordination rules for social security:

      • work in a single other country (posting), and
      • work in two or more countries (multi-state working).

      Given the growing importance of multi‑state work, it may in some cases be more advantageous to rely on the (future) rules and procedures for work in two or more countries rather than treating every situation as a posting to one host state.

      Employers should therefore review their internal mobility and HR processes so that, when posting rules are used, the A1 application is submitted before the trip, mirroring the practice already familiar from prior notification requirements under the EU Posting of Workers Directive.

      This forward‑looking approach can reduce compliance risks, prevent delays, and better align with the evolving patterns of cross‑border mobility.

      Substantive changes – targeted clarifications, unresolved practical issues

      From a substantive perspective, the proposed amendments to the posting rules are relatively limited. The core architecture of the posting rule remains unchanged: up to 24 months’ coverage in the home state, provided the employer normally operates there and the worker is not posted to replace another posted worker.

      The key change is a clarification of the replacement ban. The draft now confirms that the 24‑month limit applies to the posting as a whole, even if more than one worker is posted in succession.

      In practice, this means that a worker sent to continue the same assignment after a predecessor has returned home can still qualify as a posted worker and remain under the home state’s social security, as long as the total duration of the posting chain does not exceed 24 months. In other words, replacement per se no longer automatically excludes a worker from posting coverage if the overall 24‑month cap is respected.

      However, this clarification does not resolve the more substantial problems with the replacement ban, including:

      • Practical enforceability: Authorities and employers still face significant difficulty in tracking whether a worker is “replacing” another posted worker, particularly when there are multiple assignments, overlapping projects, or complex staffing patterns.

      • Scope of “replacement:” The text remains silent on nuanced scenarios. For example, if a posted worker performs part of the tasks previously carried out by another posted worker and part of a different set of tasks or projects, is this still a “replacement”? Recently, a Swedish court decided to refer a case concerning the replacement ban in posting under social security rules for seasonal workers to the Court of Justice of the European Union.3

      • Multi‑role and matrix structures: In large or matrix organisations, workers often have mixed functions and serve several clients or internal business lines. Determining whether there is a “replacement” for purposes of the posting rules in such settings remains highly fact‑dependent and legally uncertain.

      Overall, while the 24‑month clarification is welcome, it does not remove the interpretative “grey zones” around replacement, and further guidance from the Administrative Commission and case law will likely be needed.

      Administrative changes – more process, but rights protected

      It is important to note that the proposed changes described here relate only to posting. Other coordination rules that determine which country is responsible for social security in cross-border working arrangements, such as work in two or more EU member states, are not covered in this publication. The analysis is limited to temporary postings.

      The new rules make the procedure stricter, but they do not take away rights:

      • Employers are expected to apply for an A1 before the posting starts.

      • If they do not, the posted worker does not automatically lose home‑country coverage – applicable law is still decided under Regulation (EC) No 883/2004 on coordination of social security systems.

      However, missing a prior A1 application will expose the employer to administrative sanctions and trigger a time‑consuming process in which the host state gathers information from the employer and the posted worker, sends it to the home state, and the home state eventually issues a retroactive A1 if its law applies.

      In reality, most genuine posting cases end up in the same place – a (retroactive) A1 certificate – but with much more administrative effort for everyone when no prior application was made.

      Bottom line for employers: apply for the A1 before the posting. It is simpler, safer, and avoids unnecessary friction with authorities.

      Business trips – narrow exemption, only for postings

      The draft proposal also introduces a business trip concept and links it to an exemption from the prior A1 application requirement when the trip itself is treated as a posting.

      This looks like an attempt to align the coordination rules for social security with the Posted Workers Directive by focusing on situations where an activity performed abroad involves a provision of services.

      In practice, this means that if a business trip qualifies as a posting and involves the actual provision of services, a prior A1 application is still required, except when the trip lasts up to three consecutive days within a 30‑day period and is not related to construction.

      By contrast, if the business trip does not involve service provision (for example, attending a seminar or conference) and still qualifies as a posting, no prior A1 application is required.

      Importantly, this exemption is only about postings. It does not apply if business travel is part of a regular multi‑state working pattern (working in two or more countries).

      KPMG advisors can be contacted for further guidance, and additional publications on other proposed amendments will follow.

      Contacts

      Daida Hadzic
      Daida Hadzic

      Director, Washington National Tax – Global Mobility Services

      KPMG in the U.S.

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      The above information is not intended to be “written advice concerning one or more federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230 as the content of this document is issued for general informational purposes only.

      The information contained in this newsletter was submitted by the KPMG International member firm in the United States.

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