Under Article 8.1, an employee who normally works for an employer located in the United States or in the Czech Republic who is temporarily transferred to work in the other country for the same employer will continue to be covered by the social security system of the country from which the employee has been transferred. This rule will apply only if the transfer is expected to last 5 years or less.
Article 8.1 also applies in the case of certain employees who are sent by an employer in the United States to work for a subsidiary or other affiliate of that employer in the Czech Republic. U.S. law permits American companies to extend U.S. social security coverage to U.S. citizens and resident aliens employed by an affiliated company in another country. To do this, the parent company in the United States must enter into an agreement with the Internal Revenue Service (IRS) to pay social security contributions on behalf of all U.S. citizens and residents employed by the foreign affiliate. Under Article 8.1, U.S. citizens or resident aliens who are sent by an American employer to work for an affiliated Czech company for 5 years or less will continue to be covered by the United States and exempt from Czech coverage and contributions, provided the affiliate is covered by an IRS agreement.
For purposes of measuring the length of a transfer for workers who were sent from one country to the other before the Agreement entered into force, any period of work before the Agreement's entry into force will be disregarded. (See Article 23.3.)