Secondment Assignment Definition

Information provided by RHExpat (www.rhexpat.com)

When deciding to send an employee abroad, as an HR, some of the first questions are “how can I send an employee abroad in regard to the labor law” and what “social security scheme will the employee be subject to”. What should be his status, expatriation or secondment? Why not a “local” contract? These are confusing concepts for many.

Therefore, in order to avoid all confusions and facilitate the assignment abroad, it is necessary to clarify the following concepts:

//General definitions

The general definition of an “expatriate” is the following: it is a person that lives outside of his own home country. The main differences will therefore be identified by the compensation elements of the work contract (premiums, benefits-in-kinds, etc) for an employee on assignment or by his social security coverage.

The definitions provided below are those usually used by most firms since there are no legal definitions for the different types of expatriation status.

/// Expatriate

In general, an expatriate is someone who benefits from a total expatriate package. He is sent 2 years abroad, he is guaranteed the same French social security benefits (or equivalent benefits), he is paid premiums and benefits from a housing and car benefit-in-kinds, etc.

/// “Local” employee

A “local” employee is an employee who is hired in the host location. His home local contract is terminated or suspended while the “local” contract is signed. Therefore, he has the compensation of a local employee, benefiting at least from the minimum wage, he contributes to the host mandatory social security scheme and does not receive any particular premium or benefit-in-kind.

/// “Local +” employee

“Local +” employee is an employee hired under a “local” contract with certain premiums or benefit-in-kinds. For example, he benefits from social security coverage equivalent to that he benefited from in his home location or he benefits from a housing benefit-in-kind.

/// Split

A “split” is, in general, an employee with two work contracts in two different countries, or at least that works in two distinct countries. The reason for two contracts can either be for legal or financial matters. A “split” employee can also benefit from premiums or benefit-in-kinds.

// The social security status

Secondment or expatriation in regard to social security is one of the only legal definition that exists.

The employee expatriated is subject to the mandatory social security scheme of the host location.

The employee seconded is subject to the mandatory social security scheme of the home location. The work contract of the home country remains applicable.

/// How to choose between the two status

The employer can impose the choice. Secondment is only possible for citizens of the European community and for countries outside of Europe with whom France has signed a totalization agreement. You will find attached the list of countries with which France has signed a totalization agreement.

If you can choose between secondment and expatriation, the choice can be made also for the following reasons:

a) The cost of the host social security scheme is lower than the home social security scheme. More information on this can be found on the section “cost”.

b) Practical aspects can always play in favor of one situation or another: the expatriate being subject to the host social security scheme, it will be necessary to have a local payroll, register the employee (and maybe the firm) to the host social security authorities. The employee seconded must only contribute to the home mandatory social security scheme. This way the administrative obligations are much simpler, the employee maintains a social security scheme he understands with only certain modifications (see below).

/// Administrative obligations

For a secondment, it is necessary to obtain a certificate of coverage from the competent authorities. For a secondment within the European community, it is necessary to obtain an A1. The request must be made to the home country social security authorities.

For an expatriate employee, the employee must be registered with the host social security authorities. In this case, either you request some assistance from the host employer or you ask assistance from a specialized firm.

// Labor law

Normally, the employee expatriated signs a new work contract with the host location and the work contract in the home location is suspended for the duration of the assignment.

The employee seconded is tied to his home employer by his original work contract while on assignment abroad.

Therefore, the importance of defining the labor law applicable to the annex of the work contract during the assignment is to identify clearly the employer’s obligation toward the employee and the rights of the employee.

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