Globally Mobile Employees – UK and EU Social Security

The 2020 Trade and Cooperation Agreement allows globally mobile or “cross-border” workers and their employers to continue to pay social security in their home state only. The agreement also provides workers with access to healthcare cover in the country where they are temporarily working.

The Agreement includes details in relation to ‘Posted Worker Protocol on Social Security’ and replaced the pre-Brexit EU rules on social security for those from the UK working in the EU, or from the EU working in the UK. The rules are now ‘nationality blind’, so these also apply to non-UK and non-EU nationals in the UK and / or EU cross-border situations.

The new arrangements for multi-state workers and detached workers posted for up to two years are now in effect.

Detached Worker Provision

All EU member states ‘opted in’ to arrangements to apply the detached worker provision in the UK. This means that workers temporarily moving between the UK and the EU continue to pay social security contributions in their home country but will receive necessary healthcare treatment in the country where they are temporarily posted, provided the posting is not expected to (and does not) exceed two years. Previously, the social security arrangement could be extended beyond two years; however, this is no longer available under the new rules.

Switzerland, Norway, Iceland and Liechtenstein

It should be noted the automatic ‘detached worker’ rules only cover the UK and EU member states. The previous EU Social Security Regulations also included Switzerland, Norway, Iceland and Liechtenstein. The UK’s tax authorities, HM Revenue & Customs (HMRC), have indicated a similar social security coverage can be obtained for postings to:

• Switzerland – up to two years
• Norway – up to three years
• Iceland – up to one year, extended by a further year subject to agreement between HMRC and the Icelandic tax authorities.

The UK does not have a bilateral social security agreement with Liechtenstein; however, migrants from Liechtenstein may not have to pay UK social security (National Insurance Contributions) for the first year of their posting in the UK, provided they meet certain conditions.

Multi-State Workers

The Posted Worker Protocol on Social Security rules are broadly aligned with the previous rules for multi-state workers. We therefore expect existing A1 certificates to continue to be valid and new applications can be made.

For employers with cross-border workers, it is important to seek advice to ensure you understand the social security and tax implications of such arrangements.