TN 18 (02-01)
RS 02001.965 Detached Worker Rule under the Agreement with Korea
A detached worker is an employee who is sent by his/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 laws of the country from which he/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 begins with the date the employment in the host country begins or 4/1/01 (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 Korea, the American employer has entered into an agreement with the Internal Revenue Service under section 3121(l) of the Internal Revenue Code to provide Social Security coverage for U.S. citizens and residents employed by the affiliate.
NOTE: In such cases, the employer must still obtain a certificate of coverage from SSA to establish the exemption from Korean Social Security taxes.
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.
Agreement under Section 3121(l) of the Internal Revenue Code, RS 01901.070
American employer defined, RS 01901.050