EU/EEA | Social Security | Summing up the first half of 2023

EU/EEA | SOCIAL SECURITY | SUMMING UP THE FIRST HALF OF 2023

As the summer holiday season has ended, we take the opportunity to look back at the first half of 2023 in the world of EU/EEA social security. See our alert here which covers our initial look into 2023 published at the start of the year.

It has been a hectic year. From a European perspective, some of the most consequential developments for the past 10+ years have taken place.

• New rules for commuters/teleworkers

In the aftermath of Covid-19, cross-border commuting and working from home has become a new normal. Current EU/EEA rules trigger social security obligations for employers in the country of residence where an employee works 25% or more in that country.

Intensive work has been completed to install a solution which could easily and quickly solve this issue, and lead to the introduction of the Framework agreement. This gave countries the possibility to opt for a solution which raises the 25% threshold to 50% in certain situations.

> Please find further information about this here.

Not all countries opted for this framework agreement, meaning the existing rules (25% threshold) will remain applicable, with the teleworker relaxation ending no later than 30 June 2022.

> Please find further information about this here.

• New ways of interpreting existing rules

The above-mentioned Framework Agreement only provides a temporary solution to challenges arising from the new WFH arrangement. The scope of the agreement is narrow, for example only allowing limited business travel in other EU/EEA countries.

For any cases that fall outside of the scope of the agreement, the traditional rules of EU/EEA social security coordination continue to apply, and some of the solutions for managing WFH scenarios can be found below:

• Special posting rules – new EU guideline ad hoc/temporary WFH scenarios
• Modernised interpretation of the multi-state rules – 25% governed by work ‘time’ rather than work ‘days’
• Exceptional circumstances – Request for both home and host authorities to deviate from the 25% rule where special circumstances support this.

Please find our global alerts described here. We reiterate that the application of these rules vary across the EU/EEA and should be considered on a case by case basis.

• New rules on business travellers

A proposal for amending the EU/EEA guidelines has been pending since 2016. This includes amendments to the obligation to apply for A1 for business travellers. No substantial progression has been made in the matter for the first half of 2023.

• EU Court cases

The CJEU has new judgement in cases regarding social security

• In a recent case the EU Court reiterated that the employer for multi state workers is the economic employer and not necessarily the formal one. A Vialto Partners survey indicates that this interpretation is not always reflected in the national A1 application mechanisms.  On a different note, a new EU explanatory memorandum to the new Framework Agreement questions whether or not a branch can act as the employer. Employers must therefore be diligent in how this is operated.
• A recent EU-court case provides further clarity on whether Covid-19 sickness prevention compensation measures for workers are considered sickness benefits and therefore governed by any applicable A1-certificate. The Court answers that the measure is not a sickness benefit that thereby defines a new legal boundary for designing a corporate pandemic response plan.

• European Social Security Pass (ESSPASS)

The European Commission has now taken further steps to progress the digitalization of the A1 with 12 countries included in the pilot case (running since 2021), with the end goal of fully automating A1 processes from filing until delivery to host country authorities.

How can we help

Currently, we are assisting companies in:

• Redesigning their WFH policies in the light of the new Framework Agreement.
• Mapping out which parts of a commuter population is in-scope for the Framework Agreement and which part is not.
• Defining new commuter setups for employees governed by the new Framework Agreement, including opt-in mechanisms for entering into the new Framework Agreement.
• Defining modernised commuter setups for employees not governed by the new Framework Agreement. 
• Reviewing the A1 application procedure, especially for multi-state workers.
• Filing A1 applications, especially for cases governed by the Framework Agreement.

 

Contact us

Please feel free to reach out your local social security contact at Vialto Partners or to the Vialto Partners Social Security Leadership team: 

• Adam Rewucha and Wendy Toonen, Northern European Social Security Leads 
• Natalia Graf and Morgane Texier, Western and Southern European Social Security Leads 
• Barbara Kolimeczkow, Eastern European Social Security Lead
• Gary Chandler, UK/Ireland Social Security Lead