March 2023
Summary
Based on the new social security rules that apply between the EU and the UK (“Protocol”), it is not possible to extend the duration of a posting beyond 2 years while remaining covered by the home country social security scheme. Posted employees can therefore experience a shift in their social security position after 2 years. In case of extension beyond 2 years, these employees will in principle become subject to the social security scheme of the Member State in which they perform their activities.
Given that the Protocol entered into force on 1 January 2021, an increasing number of employers and employees will be confronted with this potential shift in social security from 2023 onwards.
The Detail
As a result of Brexit, the EU social security Regulation is no longer applicable for cross-border movements from/to the UK and EU as of 1 January 2021. New social security coordination rules for UK-EU cases have been laid down in the Protocol.
The coordination rules from the Protocol are generally the same as the rules as laid down in EU-Regulation 883/2004. This also applies to posted workers – individuals who are posted to another State for a maximum duration of 24 months can continue coverage by the home country social security scheme.
For postings that started prior to 1 January 2021, employees continue to be grandfathered and continue to fall under EU-Regulation 883/2004, for as long as their situation continues without “interruption”. This regards all individuals that were in any kind of cross-border situation between the UK and EU before 1 January 2021. For new moves starting on or after 1 January 2021, the coordination rules from the Protocol apply.
An important difference between EU-Regulation 883/2004 and the Protocol is that the Protocol does not offer the possibility for States to make exceptions to the standard coordination rules (no “mutual agreement” Article is included in the Protocol, while this is included in Article 16 of EU-Regulation 883/2004). Since the Protocol does not contain a mutual agreement Article, there is no possibility for States to extend the duration of postings beyond a period of 2 years while continuing social security coverage in the home country.
Employees who have been posted between the UK and the EU for 2 years and who fall under the Protocol rules could therefore have a shift in their social security position in case their posting is extended. These employees in principle will become subject to the social security scheme of the State in
which the employees perform their activities during the posting.
For posted employees between the UK and the EU who fall under EU-Regulation 883/2004, extension is still possible based on the mutual agreement Article of the EU-Regulation (subject to approval of the involved Member States).
Please note that for cross-border movements from/to the UK and Norway, Iceland, Liechtenstein and Switzerland should be considered separately, as these countries do not fall under the Protocol.
What this means to the employer
It is important that employers are aware that an employee who has been posted between the UK and the EU and who falls under the Protocol cannot continue home country social security coverage for more than 2 years. In case of an upcoming extension of the assignment, employers will have to review the implications of this extension for the employee’s social security position and related obligations in the host country (such as employer registrations).
To get a better grip on the employee population who may be impacted by this maximum period of 24 months, we recommend reviewing which of your employees are currently posted to/from the UK and EU and who fall under the Protocol rules. In case it is expected for these cases that the employees will be posted for more than 2 years, we advise looking into the potential implications from a broader social security perspective and related points of attention (such as the possibility to conclude voluntary insurances in the home country).
On a related note, a common Article 16 framework agreement instrument is currently being designed for commuters. We note that this instrument will not operate between the UK and the EU, for situations that fall under the Protocol.
How we can help
Vialto Partners has a global social security practice providing seamless support in obtaining social security statements on a global scale or delivering in depth advice when analysing the position of your mobile workforce.
Contact us
Please feel free to reach out 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
Further information on Vialto Partners can be found here: www.vialtopartners.com
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