TN 9 (11-90)
RS 02001.614 Detached Worker Rule - U.S. Dutch Agreement
A detached worker is an employee who is sent by his or her employer in one country to work temporarily in the other country for the same employer or an affiliate of that employer.
Under the agreement, a detached worker remains subject only to the social security laws of the country from which he or she was sent provided all of the following conditions are met.
The period of employment in the host country is expected to last no more than 5 years. The 5-year period is considered to begin with the date the employment in the host country begins or November 1, 1990 (the effective date of the agreement) whichever is later.
The employment relationship existed before the employee is transferred from the home country.
If an employee is sent by an American employer to become an employee of the company's affiliate in the Netherlands, the American employer must have entered into an agreement under section 3121(l) of the Internal Revenue Code with respect to the affiliate.
The detached worker rule may apply even if the employee has not been sent directly from one country to the other but is first assigned to work in a third country.
The detached worker rule does not apply to an employee transferred from the United States to work temporarily in the Netherlands if the employee takes a second job (e.g., part-time work) in the Netherlands. In this situation,the employee is subject only to Dutch social security coverage and taxes on the earnings from both jobs effective with the date the second job begins.
A detached worker who is exempt from U.S. coverage and taxes and takes a second job in the United States is subject to Dutch coverage and taxes on the original employment and U.S. coverage and taxes on the second job.
3. Family Members of Detached Workers
Any family member who accompanies a detached worker from one country to the other will be subject only to the laws of the country from which the detached worker was sent, unless the family member becomes employed or self-employed in the host country.
Family members who work in the host country will have their coverage determined in accordance with the provisions of the agreement without regard to the worker's coverage. This means,for example, that family members who accompany detached workers transferred from the United States to the Netherlands will not be covered or eligible for benefits under Dutch social security laws unless they work in the Netherlands.
Agreement under section 3121(l) of the Internal Revenue Code, RS 01901.070