Issuance of a certificate or Document for the Conservation of the status of a socially insured person in Latvia

When working in different EU Member States at the same time, social security contributions should only be paid in one country. With temporary work in different EU countries, we need to find out which country to pay social security contributions! If social insurance contributions for work in another Member State (s) are to be paid in Latvia, the employee shall have an A1 certificate issued by the SSIA on his or her hand certifying that the person is subject to the social security legislation of Latvia and for work in another Member State (s) social contributions shall be paid in Latvia.

A general condition is that social security contributions must be paid in the country in which the person pursues an activity as an employed or self-employed person. However, exceptions to this condition are provided for (for example, with regard to the posting of staff, the carrying out of work in several Member States, including for members of different professions: seafarers, civil servants, flight crew, etc.)

In order to avoid overlapping social security schemes and the difficulties that may arise from registering with social security schemes in different Member States, persons moving within the European Community must be insured in the same Member State.

A person employed or self-employed on board a seagoing vessel flying the flag of a Member State shall be required to pay social security contributions in that Member State. Where such a person receives remuneration from an undertaking having its registered office or place of business in another Member State, the social security contributions shall be payable in that State if he resides there. The undertaking or person paying that remuneration shall be regarded as an employer.

An employee who has been sent by his employer to another Member State to carry out work on behalf of that employer, who normally carries out his activities there, may continue to be insured in the first Member State if the estimated duration of work does not exceed 24 months and if that person has not been sent to replace another person sent there (Article 12 (1) of Regulation No 883/2004).

Conditions for sending workers to another EU Member State.

1) The employee is a socially insured person in Latvia. The employee must be a socially insured person in Latvia for at least one month before being sent and social security contributions are or should have been paid for him or her in Latvia;

(2) work in another Member State is carried out for the benefit of the undertaking which sends the employee and must have a direct link between them. For the entire posting period, there must be a direct employment relationship between the company that sends the employee, or shipping company, and the posted employee. Such a seconded worker must be linked to an undertaking which sends him to work in another Member State. The direct link means that the employee is subject to the management of the company that sends him. In order to determine whether there is a direct link, the following factors shall be taken into account:

• responsibility for the recruitment of the staff Member;
• liability for entering into an employment contract;
• liability for remuneration (without prejudice to possible contracts between the enterprise of the country of dispatch and the enterprise in the country of employment for remuneration of employees);
• liability for dismissal of the employee;
• responsibility for determining the duties of employment.

3) The estimated duration of the transfer may not exceed 24 months. Nor may the staff Member concerned be sent to replace another person sent there. If a longer period of posting is required, the worker/employer may apply for an exemption under Article 16 of Regulation 883/2004, assessing whether it is in the worker's interest. A new transfer period for the same employee to the same country and company may be approved if 2 months have elapsed between the transfer periods.

4) The undertaking sending the employee has to perform a significant part of economic activity in Latvia. An undertaking in the Member State in which it is established must normally carry out essential activities other than those relating solely to internal management, taking into account all the criteria characterising the activities of the undertaking concerned. The relevant criteria must be consistent with the specific nature of each employer and the actual nature of the activities they carry out. An undertaking normally carries on its activities in a Member State if it carries out a genuine activity there and if it habitually carries out a significant part of its activities there. Thus, the company must also operate in Latvia and not only in the Member State where the workers are posted. If only administrative employees are employed in an enterprise registered in Latvia, then such enterprise cannot be covered by Regulation No 883/2004 12. (1) the provisions of Article. Criteria for determining whether a company carries out a significant activity in Latvia:

• the registered office and place of administration of the undertaking;
• the number of employees in the Latvian undertaking and in the undertaking of another Member State;
• the place where the posted staff have been recruited;
• the place where most contracts with customers are concluded;
• the law applicable to contracts concluded by a Latvian company with customers and employees;
• number of contracts sold in Latvia and another country;
• turnover of the undertaking for the previous 12 months in Latvia and in another Member State. 25% of total turnover in Latvia may be a sufficient criterion.
• period of operation of the company in Latvia since its establishment, etc.

Link to information on minimum requirements in the construction sector of the European Union. Each country shall have a description of the minimum requirements for: salaries, working hours, allowances, holidays, taxes, sick conditions and other valuable information for https://www.constructionworkers.eu/lv

The competent authorities of an EU country, including the SSIA, shall assess and monitor situations covered by Article 12 of Regulation No 883/2004, apply criteria and assess whether:

• the employer carries out economic activities in the relevant territory of the EU country;
• there is a direct link between the employer and the employee.

During the entire period during which the worker is posted, checks by the competent authorities of EU countries are possible to establish whether:

• the shipping period has not expired;
• mandatory State social insurance contributions have been paid;
• the direct link between the employer and the employee has remained;
• and other checks.

Essential! Obligations of the employer in another Member State (provision of information to the relevant authorities on posted staff)

Each Member State shall lay down the arrangements for the communication of information on posted staff. Employers must contact the liaison and/or controlling authorities of the Member States to which the workers are sent to ascertain which rules apply in the event of the transfer of workers.

For example, in Germany, Austria, Finland, information on posted workers must be submitted electronically, in a dedicated online mode. Failure to comply with the required registration/notification requirements will result in fines.

More information is available on the website of the State Labour Inspectorate: http://www.vdi.gov.lv/lv/darba-tiesiskas-attiecibas/darbinieka-nosutisana/

In accordance with Regulation No 883/2004, 12. (2) a self-employed person who pursues an activity in Latvia and goes to pursue a similar activity in another Member State may continue to be insured socially in Latvia if the expected duration of work in another Member State does not exceed 24 months.

Conditions for self-employed persons for the application of Regulation No 883/2004 12. (Article 2):

• a self-employed person must normally carry out an essential activity in Latvia as a self-employed person, and before going to work in another Member State such activity must have been carried out in Latvia for at least 2 months;
• at the time of work in another Member State, the self-employed person must continue to fulfil the conditions in Latvia which allow him or her to continue his or her activities after his or her return (for example, maintenance of the infrastructure, payment of social security contributions, payment of taxes, retention of the VAT number, registration with a professional association or Chamber of Commerce, etc.) is necessary for the performance of the office or any other professional activity.

Decision No. of the Administrative Commission A2 on posted workers and self-employed persons

Where a person works in more than one Member State, the Member State with which the worker is most closely associated should be determined. These conditions are intended for different professions such as airline staff, international transport drivers, international couriers, experts from different sectors and other professionals, including performing artists, etc. They apply to both employees and self-employed persons.

Employees

In the present case, it is necessary to examine in which State the employee carries out an essential activity. If it is the State of residence, the employee may remain socially insured in the State of residence, whereas if there is no substantial part of the activity in the State of residence, the person must be socially insured in the State of the employer's registered office or place of business employing him (except where a person is employed by two or more undertakings or employers, at least two of whom have their registered office or place of business in different Member States outside the Member State of residence).

Where a person does not carry out a substantial part of his activity in the Member State of residence, the person must pay social security contributions:

• in the Member State in which the undertaking or employer has its registered office or place of business [1], where that person is employed by one undertaking or employer;
• in the Member State in which the registered office or place of business of undertakings or employers is situated, where that person is employed by two or more undertakings or employers having their registered office or place of business in only one Member State;
• in the Member State in which the undertaking or employer has its registered office or place of business outside the Member State of residence of the person concerned, where that person is employed by two or more undertakings or employers having their registered office or place of business in two Member States, one of which is the Member State of residence;
• in the Member State of residence, where that person is employed by two or more undertakings or employers, at least two of whom have their registered office or place of business in different Member States outside the Member State of residence

On the other hand, for flight crew and cabin crew members who normally operate passenger or freight services in two or more Member States, social security contributions are payable in the Member State where the home base is located [2].

The duration of the activity carried out in one or more Member States is decisive for assessing whether a person normally carries out an activity in two or more countries or whether the conditions for transmission would apply to him or her. (in determining whether an activity is permanent, special/exceptional (ad hoc) or temporary). To this end, an overall assessment of all relevant facts is carried out, with a particular focus, in the case of an employed person, on the workplace as defined in the employment contract.

Working time and/or remuneration shall be taken into account in determining whether a substantial proportion of the activities are carried out by an employed person in a Member State. According to an overall assessment, where less than 25% of a person's working time is spent in the Member State of residence and/or, where less than 25% of the person's remuneration is obtained in that Member State, it will indicate that the person does not carry out a substantial part of all his activities in that Member State.

Note: The decision on the application of the applicable law (A1 issue of a certificate) to such persons shall initially be provisional and shall become final within two months of receipt of the information by the authorities of the participating States, unless the authority of another State has a different opinion on the applicable law regarding the person.

Self-employed persons

A person who normally pursues an activity as a self-employed person in two or more Member States must be insured in the Member State of residence if he pursues a substantial part of his activity in that Member State or in the legislation of the Member State in which his centre of interests is situated, if he does not reside in one of the Member States in which he pursues a substantial part of his activity.

Criteria for determining whether a self-employed person pursues a substantial part of his activity in a Member State:

• turnover;
• working time;
• number of services provided; and/or remuneration.

If a person does not perform a substantial part of the activity in the State of residence, the centre of interests of the self-employed person shall be determined, evaluating the following criteria:

• the place where the permanent seat of the activity of that person is situated;
• the normal nature and duration of the activities carried out;
• the number of services provided;
• as well as the wishes of the person concerned according to all circumstances etc.

A person who normally pursues an activity as an employed or self-employed person in different Member States must be insured socially in the Member State in which he pursues his activity as an employed person.

A person employed as an official by one Member State and pursuing an activity as an employed person and/or self-employed person in one or more other Member States shall be subject to the legislation of the Member State to which the administration employing him as an official is subject.

It is essential to distinguish between situations in which persons may be subject to rules on work in two or more Member States and situations in which persons are subject to conditions for temporary transfer. In the former case, the pursuit of the activity of self-employed person in different Member States is part of the normal course of work and the way in which he carries out his business, whereas self-employed persons who go to work in another Member State for a limited period and are not of a continuous nature are likely to be covered by Regulation 883/2004 12. (2) the provisions of Article.

[1] “registered office or place of business” means its registered office or place of business where key decisions of an undertaking are taken and its central administration is implemented.

[2] the concept of “home base” for flight crew and cabin crew members is defined as the operator-defined location of the crew Member from which the crew Member normally starts and usually ends the accumulated hours or series of summertime and where the operator is not normally responsible for accommodating the crew Member concerned.

Contract staff of the European Communities shall have the choice of subordination:

• the law of the Member State in which they are employed;
• the law of the Member State to which they were last subject; or
• the law of the Member State of which they are nationals (nationals).

This option may be exercised only once and shall apply from the date of entry into service. This option does not apply to family benefits, the granting of which is subject to the scheme applicable to such workers.

Such contract staff shall have the right to exercise that option when the contract of employment is concluded. The authority empowered to conclude the contract of the European Communities shall inform the competent authority designated by the Member State whose legislation its contract staff Member has chosen.

The Regulations provide that the period of dispatch may not exceed 24 months. However, two or more competent authorities of the Member States may agree on exceptions to Articles 11 to 15 of Regulation No 883/2004 in the interest of certain persons or categories of persons. Such an agreement means that a person will be subject to the legislation of one Member State, even though another Member State is designated as the competent State in accordance with the rules laid down in Regulation No 883/2004. Agreements must be based on the interests and benefits of employees.

For example, if the worker's intended period of posting is known to exceed 24 months, the employer or the person concerned must submit a request to the SSIA in good time. The application of the derogation in the SSIA shall be agreed with the competent authority of the State of employment. In the event of a positive decision, the SSIA will issue an A1 certificate and the maximum period for which an A1 certificate may be issued under the derogation is 5 years.

the agreements provided for in Article 16 shall also be used to authorise posting for a retroactive period affecting the interests of the worker, for example where the law of the wrong Member State has been applied. However, such an examination of past situations can only be used in very specific cases.

If a request for an extension of the period of transmission for more than 24 months is not made or if, following the submission of the request, the participating States do not reach an agreement in accordance with Article 16 of the Regulation to extend the applicable law of the sending State, the law of the Member State in which it actually works shall apply to the person immediately after the end of the period of dispatch.

Employees who are sent by the Latvian employer to work in another EU/EEA Member State or Switzerland (hereinafter - Member States) and self-employed persons who travel to another Member State for temporary activities shall be required to obtain an A1 certificate before commencing activities in another Member State. The certificate certifies that the employee or self-employed person, when performing work in another Member State, continues to be subject to Latvian legislation and social security contributions are due in Latvia. A1 a certificate is also required if a person works in several Member States in order to pay social security contributions in only one country. When sending an employee A1 certificate, his employer shall request it. Where a person works in two or more Member States without posting, the certificate may be applied for by the employer or by the person himself. The certificate shall be presented to the competent authority of the State of employment if the institution so requests.

1. If an employer intends to send an employee for work to another Member State for a specified period of time, then in order to allow the employee to continue applying Latvian legislation and to pay social insurance contributions in Latvia, the employer shall submit an e-application to the SSIA regarding the employee to be sent to the SSIA requesting that the status of the socially insured person be maintained in Latvia while working in another EU/EEA country, Switzerland or the United Kingdom upon referral. This submission shall also be submitted in case of sending of Latvian civil servants, contract staff of the European Communities who have chosen to apply the laws of Latvia and, in cases when the Latvian employer sends a seafarer residing in Latvia, to perform work on a ship flying the flag of another Member State.
2. If a self-employed person goes to work temporarily in a self-employed capacity in another Member State or will pursue activities in several Member States and wishes to remain socially insured in Latvia, the self-employed person shall submit an e-application to the SSIA for the maintenance of the status of socially insured person in Latvia while working in another EU/EEA State, Switzerland or the United Kingdom in a self-employed capacity, in order to obtain an A1 certificate.
3. If the employer employs employees in two or more Member States (the employee carries out work in other Member States on behalf of one employer), including international transport, the employer shall submit an e-application to the SSIA for A1 certificate — Employment in two or more EU/EEA countries, Switzerland or the United Kingdom (Application for the maintenance of socially insured status in Latvia, usually working in two or more EU/EEA countries, Switzerland or the United Kingdom).

Employees who are employed by several employers and will carry out their work in two or more Member States shall themselves submit this application. The application shall also be submitted in cases when the person:

• work as an official in two or more Member States or as an official in one Member State and as an employed or self-employed person in another Member State/States;
• work simultaneously as an employee and self-employed person;
• will serve as an employed flight crew and cabin crew Member.

A1 request for a certificate in the field of international road transport

Applications should preferably be submitted at least 4 weeks before the start of operations in another country.

If it is not possible to submit an e-application to the portal Latvija.gov.lv for the receipt of A1 certificate, then the application may be submitted:

• by electronic means, by e-mail to the iemaksas@vsaa.gov.lv and by signature with a secure electronic signature;
• by post to the SSIA contribution Unit: Varaklanu Street 2, Riga, LV-1019;
• face-to-face at any SSIA customer service center.

Submission forms are available here.

The SSIA A1 certificate shall be sent to the official electronic address (e-address) or e-mail of the employer or employee of Latvia, if the official electronic address account has not been activated.

Important! A1 certificate is a document certifying which country (EU/EEA Member State or Switzerland) the legislation applies to the person and in which country the social security contributions are payable. A1 the certificate shall be issued by the SSIA contribution Unit.

A1 a certificate shall be issued to the SSIA in those cases when, in accordance with the legal provisions of Regulations No 883/2004 and No 987/2009, the legislation of Latvia is applicable to a person. The A1 certificate issued by the SSIA shall be valid until the date indicated in the certificate or until it has been revoked or declared invalid by the SSIA.

Regulation (EC) No 883/2004 of the European Parliament and of the Council of 29 April 2004 on the coordination of social security systems (in force from 1.05.2010);

Regulation (EC) No 987/2009 of the European Parliament and of the Council of 16 September 2009 laying down detailed rules for the implementation of Regulation (EC) No 883/2004 on the coordination of social security systems (in force from 1.05.2010);

Regulation (EU) No 1231/2010 of the European Parliament and of the Council of 24 November 2010 extending Regulations (EC) No 883/2004 and (EC) No 987/2009 to third-country nationals who are not covered by those Regulations solely on the grounds of their nationality (with effect from 1.01.2011);

Directive 96/71/EC of the European Parliament and of the Council of 16 December 1996 on the posting of workers in the framework of the provision of services;

Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the implementation of Directive 96/71/EC on the posting of workers in the framework of the provision of services and amending Regulation (EU) No 1024/2012 of the European Parliament and of the Council on administrative cooperation through the Internal market information system (“the Ima Regulation”);

Directive 2004/38/EC of the European Parliament and of the Council of 29 April 2004 on the right of citizens of the Union and their family members to move and reside freely within the territory of the Member States amending Regulation (EEC) No 1612/68 and repealing Directives 64/221/EEC, 68/360/EEC, 72/194/EEC, 73/148/EEC, 75/34/EEC, 75/35/EEC, 90/364/EEC, 90/365/EEC and 93/96/EEC;

Decision No A2 of the Administrative Commission for the Coordination of Social Security systems (12 June 2009) on the interpretation of Article 12 of Regulation (EC) No 883/2004 of the European Parliament and of the Council on the legislation applicable to workers temporarily posted outside the competent State and to persons pursuing an activity as self-employed persons.