Update on social security coverage for detached workers after Brexit
Following up on our previous article about the effects of the Brexit deal on social security coverage, we would like to inform you about an important update on the situation for detached workers. Before going into this update, we would like to briefly outline the new rules for this group of employees.
New social security agreement between the UK and the EU
Because of Brexit, the existing social security coordination treaty between EU Member States (known as EU Regulation (EC) 883/2004) no longer applies in relation to the United Kingdom. This was one of the important outstanding questions before the so-called Brexit agreement of December 2020. In the Brexit agreement this was dealt with and a new coordination agreement is now in place.
The new Protocol on Social Security Coordination as established between the European Union and the United Kingdom stipulates that the main rule for employees is that they fall under the social security coverage of the State where the work is being performed. This is similar to the existing rule under EU Regulation (EC) 883/2004.
Social security coverage for detached workers
Specific rules apply to detached workers (assignees). These employees can remain covered in their home country while being on assignment in the host country if the duration of the assignment does not exceed 24 months and the employee is not sent to replace another detached worker. The same approach is taken under the current EU Regulation.
In the Brexit-agreement it was however shaped as an option which Member States could choose to either apply or not.
Within a month after the date of entry into force of the agreement, the EU-Member States were required to notify the United Kingdom whether they would indeed wish to deviate from the main rule. The States could opt for three different categories, namely A, B or C:
- Member States A wish to derogate from the main rule;
- Member States B do not wish to derogate from the main rule;
- Member States C have not indicated either preference.
All EU-Member States have now expressed their wishes to derogate from the main rule (Category A), which is good news! This means that employees assigned to or from the Netherlands (from or to the UK) from January 2021 onwards will be able to continue to be covered by their home country’s social security system for a maximum period of 24 months. This makes going on an assignment to or from the UK a lot easier for employers, but also for employees.
Assignments exceeding 2 years should however be closely looked into as beyond the 24 months there will be changes in the social security position of the employee. This is still an important difference when compared to the previous situation.
For further advice on social security aspects between the European Union and the United Kingdom, please get in touch with the Global Mobility specialists at Crowe Peak or your local Crowe global mobility expert.