Revised EU legislation will introduce substantial changes to social
security for EU employers not present in the UK and for those
individuals who work temporarily outside their home EU member state
The revised EU social security legislation (833/2004) will finally
come into force from 1 May 2010, having been put back from 1 March
2010. The implementation regulation (987/2009) and the regulation which
makes amendments to 883/2004 (988/2009) (the “Regulations”) were
published in the EU Official Journal on 30 October 2009, confirming the
new implementation date.
Main changes
The new Regulations introduce significant new liabilities for EU
employers not present in the UK and key changes for employees with
employment in more than one EU country.
From implementation, an EU employer will have the same liabilities
and obligations as an employer already based in the UK. Employees who
work in more than one EU member state may no longer be able to remain in
their home country social security system.
The existing distinction between 3 main groups of employees will
remain for the purposes of the European social security legislation:
- those on a short term assignment,
- those on longer assignments, and
- those individuals who work in more than one EU country regularly.
However some of the rules that apply to these categories have been
amended:
- short term assignments will be extended from 12 to up to 24 months,
- employees working in more than one EU country must undertake a
“quantitatively substantial” part of their employment activities in
their home country if they wish to remain its social security scheme.
This means at least 25% of the employee’s work days must be spent there
or at least 25% of salary must flow from their employment in their home
country, - In addition, the special rules applicable to transport workers have
been abolished.
Transition period
The current unrevised legislation (1408/71) will continue to apply
to third country nationals and to nationals of Norway, Iceland,
Lichtenstein and Switzerland. In addition, existing E101 certificates
will remain valid until expiry, unless the employee chooses to be
covered by the new rules.
Commentary
Our article dated 30 September 2009 “Substantial changes to EU
social security regulations in May 2010 (see link in Resources below)
sets out the implications of the changes in further detail.
HM Revenue and Customs has confirmed that, where there are no
material changes to circumstances, further periods of social security
liability in the individual’s home country under the current legislation
will be possible.
This affords an opportunity for employers with individuals employed
in more than one EU country to consider structuring these employment
arrangements to benefit from the existing, less restrictive, legislation
wherever possible.
Resources
Regulation
987/2009 and 988/2009
Substantial
changes to EU social security regulations in May 2010
For further information or to discuss the issues raised, please
get in touch.
