Performing remote work from a country other than Poland may result in the obligation to pay social security contributions there. To avoid this, an appropriate certificate confirming the employee’s coverage under the Polish social security system should be obtained.

This article is a continuation of the first part titled „Remote Work from Abroad Poses Additional Problems for Employers”. In the first part of the series, we discussed the consequences for social security regarding remote work from countries within the European Union, the European Economic Area, Switzerland and the UK.

This part addresses the issue of remote work performed from a non-EU Member State with which Poland has a bilateral social security agreement. Poland has signed such agreements with: Yugoslavia (currently Serbia, Bosnia and Herzegovina and Montenegro), Macedonia, Canada, Quebec, the United States, South Korea, Australia, Ukraine, Israel, Moldova, Turkey and Mongolia.

Bilateral Social Security Agreements

Bilateral social security agreements ensure the coordination of social security systems between Poland and the other country party to the agreement. Poland’s bilateral agreements are based on several fundamental principles, similar to those governing the coordination of social security within the EU.

The scope of these agreements varies. They typically regulate matters such as pensions, disability pensions, family benefits and allowances. However, for the purposes of this discussion, the key provisions relate to determining the applicable legislation for work performed in the other contracting state.

Mechanisms from bilateral social security agreements often resemble EU regulations; for example, they provide for certificates similar to the A1 form. It is essential to note several significant differences between community law and the specific bilateral agreements.

Therefore, this section focuses on analysing and highlighting the differences between the bilateral agreements with Ukraine and with the United States of America.

Social Security Agreements between Ukraine and the United States of America (USA)

The applicable legislation is addressed in Chapter II of the Ukraine Agreement and in Part II of the USA Agreement.

The general rule in the Ukraine Agreement states that an insured person is covered by the social security system of the country where they perform the employment. The USA Agreement states that an employee working in one of the parties (e.g. Poland) is subject exclusively to the social security laws of that party, i.e. Poland.

Despite the differences in wording, it can generally be assumed that the objective is the same: according to the general rule, the employee is subject to the social security system of the country where they physically perform the work.

Both agreements, like the EU regulations, contain several exceptions to this general rule.

The first exception concerns posted workers. Both agreements specify the conditions under which a posted worker, despite working temporarily in the host country (Ukraine/USA), may remain subject to the Polish social security system. Notably, the Ukraine Agreement sets a 24-month maximum posting period (with the possibility of an extension with the Ukrainian authorities’ consent). The USA Agreement allows a five-year posting period.

Additionally, the USA Agreement specifies that the posting rules apply if an employee, sent by their Polish employer to another third country (e.g. Germany), is covered by Polish social security laws during that period and is then posted by the same employer to work in the USA. In this case, the employee may continue to be covered by the Polish system, provided they obtain the appropriate certificate.

Such specific regulations are not found in the Ukraine Agreement.

However, it is important to note that, in the case of remote work, the employee is usually not posted to the other country. The posting could only apply if the employer explicitly states in the remote work directive that the work will be performed in a specific country starting at a certain time. If the employer does not make this clear, the employee working remotely from abroad will not be able to remain under the Polish social security system and will, as a rule, not receive a PL-UA 1 or PL-USA 1 certificate based on the provisions concerning posted workers.

Another exception in both agreements applies to special situations. The provisions in Article 8 of the Ukraine Agreement and Article 6(10) of the USA Agreement closely resemble the provisions of Article 16 of Regulation 883/2004.

For the Ukraine Agreement, this provision allows Polish and Ukrainian authorities to establish exceptions to the agreement, including the general rule, for any individual or group of individuals, provided it is in their best interest. It should not cause significant difficulties, as short-term contributions to another country’s system are generally not favourable when it comes to receiving benefits from that system. It is also highly likely that the ongoing COVID-19 pandemic will be treated as an exceptional situation by the social security authorities.

The exception provision in the USA Agreement is almost identical, except that the employee’s interest is not explicitly required as a condition for requesting an exceptional agreement.

The exceptional procedure seems to be the most appropriate method for requesting a certificate confirming coverage under the Polish social security system when working remotely from abroad. To obtain this certificate, an application must be submitted to the relevant branch of ZUS (Polish Social Insurance Institution). It is important to note that ZUS will issue the certificate only after obtaining written approval from the foreign authority.

Lack of a Certificate Confirming Coverage under the Polish Social Security System

The main consequence of not being covered by the Polish social security system, and thus not obtaining a PL-UA 1, PL-USA 1, or other equivalent certificates (e.g. PL-MD 1 for Moldova, PL RM 101 for Macedonia, PL-CAN01 for Canada, etc.), is that the employee will be subject to the social security system of the country where they perform remote work.

It is crucial to emphasise that the employer is responsible for determining which social security system they should contribute to for their employees. It is worth noting that contributions to the Polish social security system do not protect the employer from potential obligations in other countries (if contributions should, in fact, be paid abroad).

Until the appropriate certificate is obtained from ZUS, or until the necessary contributions are paid in the host country (if deemed necessary), the employee will generally have the status of an uninsured person in the country where they work. In this case, they will not be entitled to insurance benefits or public healthcare (usually free of charge) in that country.