European Union: CJEU Rules on Third-Country Work and the 25% Rule for Cross-Border Employment
When workers split their time between EU Member States, Switzerland, and countries outside the EU, determining which social security system applies can become surprisingly complex. In its judgement of 11 December 2025 in Case C-743/23, A v. GKV-Spitzenverband, the CJEU addressed a question that had divided national authorities for years: should work performed in non-EU third countries be factored into the 25% “substantial activity” test under the EU social security coordination rules? According those rules, if a worker works 25% or more in his country of residence, the social security of that country applies.
The Facts
Mr. A resided in Germany and was employed full-time by a company established in Switzerland. During the period from December 2015 to December 2020, he carried out his work across multiple countries: 10.5 working days per quarter in Germany (working from home), 10.5 working days per quarter in Switzerland, and the remaining working time in various third countries. His monthly salary did not vary depending on where he worked.
Mr. A took out compulsory health insurance in Switzerland — the country where his employer was based. However, GKV-Spitzenverband, the National Association of Statutory Health Insurance Funds in Germany, took a different view. It decided to issue Mr. A with an A1 certificate declaring that German social security legislation applied throughout the entire period.
The reasoning of GKV-Spitzenverband was straightforward but controversial: it counted only the working time Mr. A spent in countries within the scope of the EU coordination rules, namely Germany and Switzerland. On that basis, 50% of the relevant working time was spent in Germany, his state of residence — well above the 25% threshold of Article 14(8) of Regulation 987/2009, which defines a “substantial part” of activity. Third-country work was simply ignored. Mr. A challenged this, arguing that his work in third countries should be included in the calculation. When all working time was taken into account, his German share amounted to only 16% — well below 25%.
The Court’s Answer
The CJEU ruled clearly in favour of Mr. A. Third-country working time must be included when assessing whether a worker performs a substantial part of their activity in their Member State of residence. The 25% threshold under Article 14(8) of Regulation 987/2009 is to be measured against all of the worker’s professional activity, not only the portion carried out within the EU and Switzerland.
The Court’s reasoning rested on several grounds. First, the wording of Article 14(8) itself refers to “all the activities” of the employed person and requires an “overall assessment” — language that does not limit the analysis to EU territory. Second, the conflict-of-law rules in Article 13(1) of Regulation 883/2004 are designed to reflect the worker’s objective situation. Excluding a significant share of actual working time simply because it falls outside the EU would create, in the Court’s words, “a legal fiction far removed from the actual nature of the activity.” Third, the Court noted that including third-country work does not undermine the single-legislation principle: regardless of the outcome, the worker will always be subject to one Member State’s legislation. In Mr. A’s case, this meant Swiss legislation, as his employer was established in Switzerland.
What This Means in Practice
For employers with staff who combine European and non-European work, this ruling requires a careful review. HR and payroll teams should map the global working patterns of any multi-State workers, as third-country time now directly affects which Member State’s social security legislation applies. Workers who previously met the 25% threshold in their state of residence — as GKV-Spitzenverband had calculated for Mr. A — may no longer do so once worldwide activity is taken into account, potentially shifting contribution obligations to the Member State where the employer is established.
The judgement resolves a question on which Member States had taken divergent approaches and provides a clear rule going forward. For any organisation managing internationally mobile employees who work both within and outside Europe, this is a ruling that deserves prompt attention.
Source
CJEU, Case C-743/23, A v. GKV-Spitzenverband, judgement of 11 December 2025.
