COVID-19: Is your payment of social security affected by your employees working from home, e.g. in Sweden?
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As a rule, an employee is covered by social security in the country where the employee works, regardless of where the employee lives within the EU. There are, however, some modifications to the rules in the light of the COVID-19 pandemic as regards employees working and living in Sweden and Denmark.
General rule:
As stated above, employees are – as a rule – covered by social security in the country where the employee works (if this is within the EU), regardless of where the employee lives within the EU. However, if the employee works in both his/her country of residence and a second country within the EU, e.g. Sweden and Denmark, the employees’ social security coverage will depend on how much the employee works in each country.
If the employee works less than 25 % in his/her country of residence, the employee will as a main rule be covered by social security in the country where the employee works for the majority of the time. If the employee works minimum 25 % or more in his/her country of residence, the employee will as a main rule be covered by social security in the employee’s country of residence.
Exceptions due to COVID-19:
Due to the COVID-19 pandemic, many employees are working from home which entails that employees who example live in Sweden and work Denmark will be working more in Sweden than under “normal circumstances”. Under the general rule described above, this could affect that the employee’s social security coverage will change from Denmark to Sweden.
However, to avoid this, the public authority in Sweden (“Försäkringskassan”, if the employee lives in Sweden) and the public authority in Denmark (“Udbetaling Danmark”, if the employee lives in Denmark) have agreed that the employee’s social security in Sweden or Denmark will not be affected by the employee working from home due to COVID-19.
This exception to the general 25 %-rule will, however, not apply, if the employee changes his/her working status (e.g. changes job, becomes self-employed or similar).
Based on this, an employee living in Sweden but working in Denmark will still be entitled to social security from Denmark, although the employee is working more than 25 % from his/her residence in Sweden, if the employee’s is working from home due to the COVID-19 pandemic.
Bird & Bird’s comments:
When the current restrictions and recommendations are being eased, it is expected that the Swedish and Danish authorities will revoke the exception to the 25 %-rule and the employee will – as before the pandemic – be entitled to social security on the basis of the general rule described above.
It is therefore important that employers who employ employees who commute between Sweden and Denmark are aware of these temporary rules and also aware of when these are being revoked.
