Background

Increasingly complex and fragmented forms of work need adapted social security systems. These are governed by Member States and EU rules only coordinate – rather than harmonise – national social security systems to ensure that mobility does not result in loss of rights for citizens who live, work or retire in another EU country. The traditional links between the place of work and the applicable social security rules have been blurred by increasing telework, platform-based work, cross-border and multi-state professional activities.

The main principles underlying this EU coordination are that all those covered, including EU citizens, who live or work in another Member State are subject to the legislation in one country at a time and only pay contributions in that country; that all have the same rights and obligations; and that previous periods of insurance, work or residence in other countries are taken into account when granting benefits.

European Commission proposal

To modernise the EU framework, in 2016 the Commission proposed to amend Regulation (EC) No 883/2004 on the coordination of social security systems and the related implementing Regulation (EC) No 987/2009. While these two regulations applied to nationals of a Member State, stateless persons and refugees residing in an EU country, to the members of their families and to their survivors, Regulation (EU) No 1231/2010 extended their scope to third-country nationals who were already legally resident in an EU country.

The proposal introduced changes in six areas, or 'chapters': (1) access to certain social benefits by economically inactive mobile citizens, (2) applicable legislation for posted workers (sent by their employer to work in another EU country temporarily) and persons working in two or more EU countries, (3) long-term care benefits, (4) family benefits, (5) unemployment benefits, and (6) miscellaneous amendments.

Furthermore, it introduced a change of perspective to the question of which country should pay unemployment benefit to cross-border workers. While previously it was the responsibility of the worker's state of residence, the review replaced it with the principle of lex loci laboris (law of the place of work), transferring the responsibility to the country in which the worker carries out his or her activity and pays social security contributions, after a certain minimum period of affiliation to the social security system in the country of employment. The standard for 'export of unemployment benefits' for jobseekers moving to another EU country would be six months (compared to the current three), after which the country of residence would take over. While this change makes little difference to some EU countries, to others (such as Luxembourg, where frontier workers make up a large proportion of total employment) it is a game changer.

Legislative process

Interinstitutional negotiations, based on the Council's general approach from June 2018 and the European Parliament's mandate of December 2018, led to a provisional agreement in 2019 on changes to chapters 1, 3, 4 and 6, although these did not gather the necessary majority in Coreper. The main outstanding issues remained the obligation to notify in advance the intention to post a worker to another Member State ('prior notification'), the notion of the 'place of business' to determine the applicable legislation; and the rules for the payment of unemployment benefits to frontier and cross-border workers.

After the Council updated its negotiating mandate, a provisional agreement was found, only to be rejected by Coreper in December 2021. In 2023, the Council suggested splitting the file and adopting the four chapters that had already been agreed, but Parliament refused the limited review and was ready to continue negotiations. In 2025, the Polish Presidency of the Council put forward a revised Council mandate and organised new trilogues. The Cyprus Presidency resumed negotiations, on the basis of the Polish compromise, in February 2026 and a provisional agreement was reached on 22 April 2026.

Provisional agreement

The content of the four chapters that were provisionally agreed in 2019 has not been modified since. It includes, for example, a first common EU definition of long-term care benefits and a list of services.

The 2026 provisional agreement contains the following changes:

For unemployment benefits for cross-border workers, after 22 weeks of affiliation with the Member State of employment, this state (and not the country of residence) becomes responsible for paying unemployment benefits, for six months, after which the country of residence would take over. The employment service in the unemployed person's country of residence will have to report to the institution responsible for payment, particularly on job-seeking efforts. The implementing regulation has been amended (Article 55), with stronger wording on activation and job placement procedures. For Luxembourg, the new rules mean that the public employment authority will become the competent institution for a great number of frontier workers. With a view to the expected increase in administrative burden and the need to adjust the social security system, Luxembourg was granted an additional transitional period of three years (with a possible prolongation of two more years) during which the relevant rules will not apply.

As for workers temporarily posted to work in another EU country, prior notification (the obligation to send an 'A1 form' to the authority of the country of employment) will be mandatory for all postings, with two exemptions: for business trips and activities of no more than three consecutive days within a 30-day period. For the construction sector, the second exemption does not apply and all postings will have to be notified.

As regards pluriactivity (activity pursued in two or more Member States), the relevant place of business or registered office is where key decisions are taken. The recitals contain an indicative and non-exhaustive list of factors to support this determination, such as the turnover, the places where general meetings are held, and the habitual nature of the activity pursued. This should help identify the institution responsible for the payment of benefits and combat the phenomenon of letterbox companies.

The process of requesting and receiving social security attestations will be facilitated by the Electronic Exchange of Social Security Information (EESSI), a decentralised IT system that helps social security institutions exchange information. It connects around 3 400 institutions in 32 participating countries: the 27 EU Member States, Iceland, Liechtenstein, Norway, Switzerland, and the United Kingdom.

European Parliament position

In Parliament, the Committee on Employment and Social Affairs (EMPL) took the lead (rapporteur Gabriele Bischoff (S&D, Germany)). In the final provisional agreement, EMPL managed to maintain the mandatory prior notification for the construction sector, an industry which is prone to fraud and presents high numbers of accidents at work. Parliament wanted to keep the list of factors to determine the institution responsible for the payment of benefits in the legal body of the text, but conceded to move it to the recitals. It also dropped its demand for a double export period for unemployment benefits for cross-border workers (six and 10 months, depending on affiliation length), which the Council did not support. At Parliament's request, the recitals mention proportionate measures that Member States may use against employers who fail to comply with the prior notification obligation, without specifying sanctions.

Outlook

After the Parliament approved the provisional agreement on 7 July 2026, the text still needs to be formally approved by the Council, which is likely to happen in September. The new rules will enter into force on the first day of the month following the date of its publication in the Official Journal of the EU, with some rules applying two years later.