European Court Clarifies 25-Percent Threshold for Cross-Border Workers in the EU

On 4 September 2025, the Court of Justice of the European Union (CJEU) issued a ruling in Case C-203/24 Hakamp that clarifies how “substantial work” must be calculated for employees who work across multiple EU or EEA countries.

The decision confirms that the 25-percent threshold used to determine which country’s social security legislation applies can only be based on working time and/or remuneration. Other elements — such as place of residence, employer location, or vessel registration — cannot influence the calculation.

What the Ruling Means

For cross-border and mobile employees, this ruling provides much-needed legal certainty. The threshold for “substantial work” is now firmly quantifiable, preventing differing interpretations among EU member states.

Authorities must assess the situation prospectively — looking ahead over the next 12 months — rather than relying only on historical data.

If an employee does not meet the 25-percent threshold in their country of residence, social security coverage applies under the rules of the employer’s country instead.

Why It Matters for Employers

This decision standardises how social security coverage is determined for multi-state workers, but it also increases the need for accurate internal tracking.

HR and finance teams must ensure that time and pay data for employees working in more than one country are precisely recorded.

Key actions include:

• Reviewing systems that capture working hours and remuneration across borders.
• Forecasting employee assignments and hybrid work patterns for the next 12 months.
• Updating internal policies to align with the 25-percent rule.

EMG Perspective

The CJEU ruling brings long-awaited clarity but also creates new operational pressure for employers with staff working across EU borders.

At EMG, we help organisations to adapt to this standard. We help define how to record cross-border working time, structure payroll reporting for multi-country assignments, and review A1 certificate procedures to prevent compliance gaps.