The France–US social security agreement: an HR guide to relocating employees

Contents

1. Why this is a separate question from tax
2. The default rule, and the exception
3. What the France–US social security agreement covers, and what it does for the employee later
4. The condition most relocation policies miss
5. A1 forms are not the instrument
6. Self-employed and owner-managers
7. What it costs to get wrong
8. What to do, in order
9. Common mistakes

Why this is a separate question from tax

Social security does not follow the tax answer. Tax is governed by the France–US income tax treaty; social security by a separate France–US social security (“totalization”) agreement. The two instruments define residence, employer and period differently, and an employee can be tax-resident in one country while socially covered in the other. Every assignment needs both analyses, and they are run by different people with different forms.

The default rule, and the exception

The default is territorial: an employee is covered where they work. The agreement’s exception is the detached worker: an employee sent temporarily by an employer in one country to work in the other can remain in the home system for a limited period, provided a certificate of coverage is obtained. The period is time-limited, and extensions beyond it need the agreement of both authorities.

What the France–US social security agreement covers, and what it does for the employee later

On the French side the agreement covers the general scheme for employees, occupational accident and illness insurance, family benefits and the schemes for self-employed and agricultural workers, among others. On the US side it covers Social Security retirement, disability and survivors benefits and Medicare tax. Two consequences matter to HR. First, exemption is all-or-nothing within the covered schemes: an employee kept in the US system is outside the French ones listed, not just outside French pensions. Second, the agreement totalizes credits for eligibility — an employee with periods in both countries can have the other country’s credits counted toward qualifying for a benefit — so years spent covered in either system are not lost, but years spent covered in neither are.

The condition most relocation policies miss

Being exempt from the host country’s contributions means being outside its social insurance — including, in France, the national health insurance system. The US Social Security Administration states plainly that a worker exempted from French contributions under the agreement cannot use French health insurance, and that the employer or employee must arrange private health insurance before the exemption can apply.

A1 forms are not the instrument

Providers used to intra-European mobility reach for the A1 certificate. A1 forms apply within the EU, the EEA and Switzerland. For the France–US corridor the instrument is the certificate of coverage under the bilateral agreement — different form, different issuing authority, different rules. If your provider talks about an A1 for a US assignee, that is a sign they have not done this corridor before.

Self-employed and owner-managers

The agreement covers self-employed workers too, on a shorter leash: the US Social Security Administration describes transfers of a self-employed activity to the other country of two years or fewer as keeping home coverage. Owner-managers who relocate their own business are usually outside this — they have moved, not transferred temporarily — and become covered where they now work.

What it costs to get wrong

• Double contributions for the period before the certificate is sorted out, then a refund process.
• French employer contributions are a materially larger share of payroll cost than US employer payroll taxes, so an assignee who falls into the French system unplanned changes the assignment budget rather than merely the paperwork — and brings the employer’s own French payroll obligations with it.
• Benefit entitlement: years in the wrong system, or in neither, affect the employee’s eventual pension in both countries. The agreement lets each country count the other’s credits toward eligibility, but only for periods actually covered somewhere.

What to do, in order

1. Decide the structure and the intended duration before departure — the certificate is tied to both.
2. Request the certificate from the correct side (table above) before the start date.
3. Arrange private health cover where the employee will be outside the host system.
4. Tell payroll on both sides which contributions to withhold, and which not to.
5. Diarise the certificate’s expiry; an extension is a fresh application to both authorities.
6. At the end of the assignment, close the file properly so the employee’s credits are recorded where they belong.

Common mistakes

• Assuming the tax treaty settles social security. It does not.
• Requesting the certificate after arrival.
• Keeping the employee in the home system without private health cover.
• Asking for an A1.
• Forgetting that a permanent local hire changes systems entirely — and that this is often the better answer for a long assignment.

How Expand CPA can help

We determine which system applies, handle the certificate request from whichever side is correct, coordinate with your payroll providers in both countries on what to withhold, and — because we prepare the employee’s French and US tax returns as well — make sure the social security position and the tax position tell the same story.

Frequently asked questions

Can our assignee stay on US social security while working in France?

Often, for a limited period, with a certificate of coverage requested by the US employer from the US Social Security Administration before departure. Private health insurance must be in place for the exemption to apply.

Who requests the certificate for a French employee going to the US?

The French employer, from the French sickness-insurance agency, using form SE-404-1 or SE-404-2.

Is an A1 certificate the right document?

No. A1 forms are for the EU, EEA and Switzerland. The France–US corridor uses a certificate of coverage under the bilateral agreement.

Does the exemption cover French health insurance?

No. A worker exempted from French contributions is outside French health insurance and must have private cover arranged before the exemption applies.

What if we never requested a certificate?

Contributions are due in the host country from the start of the assignment. It is correctable, but it involves a refund claim in one country and back-contributions in the other. Take advice before contacting either authority.