Prepared by Carmen Ettorre and Suzana Branilovic
On March 30th, 2020, the EU Commission issued new practical advice to ensure that mobile workers within the EU, in particular those in critical occupations to fight the coronavirus pandemic, can reach their workplace.
The crisis linked to the coronavirus pandemic led the EU member States to introduce the extraordinary measures among which the internal border controls and confinements.
Frontier posted and seasonal workers often reside in one of the EU member State while they work in another member State or, in some cases, they perform work activity in more than one State.
The Governments have adopted important measures to limit free movement of their citizens and many companies have responded to such request by imposing smart working activities, helping this way frontier and posted workers to continue their working activities from their country of residence or origin rather than from the country where the working activity should be carried.
Extraordinary measures introduced by the employers and the consequent change of ordinary place of work or of business model, could in some cases, lead to the change of applicable social security legislation in accordance with the application of regular social security terms.
For this reason and in order to avoid uncertainties and disruption in the employees’ social security registers, the EU Commission provided their guidance on movement of workers by means of an advice posted on March 30, 2020.
Most of the EU member States have in the meantime provided their orientation to the companies and to their country workers but Italy is not yet among these States.
Generally, an employee is subject to the social security legislation in the country in which the employment activity is exercised by application of “territoriality principle”.
Differently, workers on temporary secondment to a Country which has a valid social security agreement with Italy, can maintain their social security coverage in the country of employment, if certain conditions are met. To prove the employee’s link to the country of employment, the employer must apply for the certificate of coverage. Within Europe this certificate is called A1 Form and its duration is generally of 24 months extendable up to 5 years.
Frontier workers are employees who reside in one country but they are employed in another country; they are in principle subject to the social security coverage in the country of employment.
Employees who work simultaneously in two or more EU States (multistate workers), are subject to social security obligations in the country of residence (if different from country of employment), under the condition that they perform substantial part of their work activity in that country of residence (at least 25% of working time or of remuneration). If less, they will remain subject to the social security coverage of the country of employment.
In its guidelines, the EU Commission clarified that certain situations which could lead to a change in the Member State of insurance of the worker, Member States should make use of the exception provided for in Article 16 of Regulation (EC) No 883/2004 with a view to maintaining the social security coverage unchanged for the worker concerned.
To apply for such an exception, the employer must submit a request to the Member State whose legislation the worker requests to be subject to.
On the basis of the information currently available (German, French, Belgian, Dutch, Luxembourg and Danish), there are countries that have already officially confirmed that no change of applicable social security legislation should apply to remote workers during the period covered by the special COVID-19 measures.
In more detail, for employees seconded in a member State, which they cannot leave due to the confinement, and who continue to perform their work activity in that State (at company premises or remotely) but whose whose certificate of coverage expired, there will be no need to apply for a new A1 certificate nor for the application of an exception for the entire duration of the emergency. If the application for an extension, instead, has been interrupted or delayed due to the COVID-19 measures, it is not necessary to inform the relevant authorities as the preceding A1 forms will remain valid. However, if the prosecution of the activity in absence of a valid certificate of coverage, caused by the extended COVID-19 restrictions, should exceed a period of two month, it will be necessary to investigate with competent social security authority of each country of a need to apply for a new A1. In addition, the issued and valid A1 form will maintain its validity over the entire duration of COVID-19 period and it will be “neutral” from the applicable social security legislation.
In relation to the cross-border workers, who temporarily work from their Country of residence as a cause of the emergency, there should be no consequent changes in applicable social security legislation; social security contributions shall remain due in the member State of employment on the basis of its regulations.
In order to secure this possibility, based on the suggestions published by the EU Commission, member States can apply the exceptional treatment contained in the art. 16 of the EU social security regulation. Consequently, employees who normally do not perform substantial part of the work from their residency country but whose change of work pattern leads them to exceed there the 25% of their working time, they will be allowed to benefit of this exception without having to change the social security coverage applicable before Covid confinement. This measures shall apply even if the working activity will be rendered exclusively in the country of residence over the period covered by the emergency restriction.
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PwC TLS Avvocati e Commercialisti
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PwC TLS Avvocati e Commercialisti
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