Berlin Whether self-employed, small and medium-sized enterprises or large corporations, the economy complains of absurd administrative burdens from the EU bureaucracy. The accusation: on the one hand, onerous requests come directly from Brussels, on the other hand, the national implementation of the regulations is often impractical.
The Family Business Foundation wanted to know specifically and had a comparative study carried out. Let’s take an example: the so-called A1 certificate.
If employees are sent to another EU country, even just for a short business trip, the employer must request such a certificate. Clarifies that the employee is covered by social security in their home country.
The studio is at the exclusive disposal of the Handelsblatt. Conclusion of the comparison between Germany, Austria, France and Italy: In this country, the registration procedure for each individual A1 certificate costs a lot of time and money.
Also, there are longer waiting times before the certificate is issued. Rainer Kirchdörfer, President of the Foundation for Family Businesses, says: “The burdens of everyday life, which commit an infinite amount of energy and resources in our family businesses, become visible in a concrete example.”
A sensible idea has problematic consequences
There is actually a sensible idea behind the A1 certificate: With the form, employers do not have to pay social security contributions in several countries or deregister employees from the national insurance system for assignments abroad of up to 24 months within the EU.
But the current study, created by the Centers for European Policy Network (CEP) and Prognos AG, in collaboration with the Regulatory Control Council of the state of Baden-Württemberg, shows the inefficiencies: since EU law says nothing about what information the application contains must contain on an A1 certificate, each country does what it wants.
For example, Austria and Germany ask whether the employee has been posted to the same Member State in the two months prior to the actual posting. Austria and France want to know the starting date of the employment relationship. In Italy, the date of signing of the employment contract must be indicated.
The study states: “All the Member States examined require information that none or only some of the other Member States require. It is therefore very likely that all four Member States will be able to reduce the information required and therefore administrative costs.”
According to the study, 4.6 million A1 certificates were issued in the pre-Corona year 2019 in the EU member states. In Germany alone there were 1.8 million modules, much more than in Italy with around 216,000, in Austria with 197,000 and in France with around 126,000 certificates.
Read more about bureaucracy in Germany:
The “regulatory burden” was measured on the basis of expert interviews. While the process is fully automated in France, Germany offers an online process. However, employee data cannot be saved and must be entered repeatedly by the company.
The upshot: The total time to apply for an A1 certificate differs ‘significantly’ across all four countries, according to the study. In France and Austria it is around 19 minutes per trial, in Germany around 26 minutes and in Italy even 32 minutes.
This total application time therefore means compliance costs per process of €6.80 in Austria, €7.12 in France and €10.28 each in Italy and Germany.
Approval times also vary. In France, for example, the form can usually be downloaded directly. Companies in Italy and Germany report longer wait times, which hinders compliance with legal requirements.
Company Complains About ‘Small Medieval States’
The industrial adhesive manufacturer Delo from Windach in Bavaria can also report on the difficulties involved in obtaining the A1 certificate. Here, managing partner Sabine Herold calculated that it would cost her 2.5 assistant positions to fill out all the forms “100% perfectly” for all business trips.
Furthermore, there would be costs that would arise from following the legal situation, especially in management. The conclusion of the company: “It is easier to travel to the United States for a business trip than to the EU.”
And Indra Hadeler, managing director of international relations at the employers’ association Gesamtmetall, says: “Unfortunately, the rules on the free movement of workers in the EU, one of the cornerstones of the internal market, are still reminiscent of small medieval states.”
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Furthermore, the situation for companies has recently worsened again. Hadeler reports: “For some time now, in various EU Member States such as France and Austria, the possession of an A1 certificate has been required as proof of the alleged protection against the weakening of minimum working conditions and against undeclared work”. the border without A1 certificate can be presented no longer has anything to do with the original idea of the social security certificate.
No changes are planned in Germany
The fact that the states now require the A1 certificate as proof of protection against wage dumping and undeclared work also changed Hubertus Heil’s (SPD) in the Federal Ministry of Labor mind.
In this country, until recently, reference was made to the consolidated jurisprudence of the European Court of Justice, according to which it is lawful to renounce the certificate for short and short-term secondments and request it only in the presence of requests in the country of destination. Now he says: as individual countries are “comprehensively sanctioning”, this can no longer be enforced.
A change in A1 madness seems a long way off. The traffic light coalition of SPD, Greens and FDP has promised in their coalition agreement to “quickly abolish” the “unnecessary requirements” for A1 certificates by introducing a “European real-time electronic register”.
But when asked which Federal Labor Ministry is responsible, he says: “Since this is an EU legislative process, it is not possible to make a reliable prediction of the expected conclusion.” The EU Commission has not yet announced a proposal.
The opposition views this attitude critically. The trade union faction’s economic policy spokeswoman Julia Klöckner (CDU) told the Handelsblatt: “It cannot be that in larger companies an employee is only busy applying for so-called A1 certificates as proof of social security.”
The traffic light, according to Klöckner, has announced that it wants to simplify processes and rules so that the economy has more time for its actual tasks. There should also be a new law on red tape relief. “So far, however, companies and citizens have been disappointed,” explained the CDU politician. “After a year of traffic lights, there aren’t even key points.”
In the light of the results of the study, the Foundation for Family Businesses believes it is possible to make the A1 certificate “much more efficient” with simple expedients. As a result, the applications could be made “leaner” in the short term and the German portal “more user-friendly”. This includes the fact that information on the form for the same company and the same person only needs to be entered once. If a secondment lasts less than five days, there may be a simplified procedure.
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