Under the agreement, a detached worker remains subject only to the social security
laws of the country from which the employer transferred the worker. However, the worker
must meet both of
the following
conditions.
-
•
The employer/worker expects the period of employment in the host country to last five years or fewer. The five-year period begins with
the date the employment in the host country begins or November 1, 1992, (the effective
date of the agreement) whichever is later.
-
•
The employment relationship existed before the employer transferred the worker from the home country.
Additionally, if an American employer sends an employee to that employer's affiliate
in Finland, for the detached worker rule to apply, there must be an agreement in effect
between the American employer and the Internal Revenue Service (IRS) under section
3121(1) of the Internal Revenue Code with respect to the affiliate. The section 3121(1)
agreement provides, among other things, for Social Security coverage for U.S. citizens
and residents that the affiliate employs. In such cases, the employer must still obtain
a U.S. certificate of coverage to establish the exemption from Finnish social security
taxes.
The detached worker rule may apply even if the employer does not send the employee
directly from one country to the other but first assigns the employee to work in a
third country.