Posting Employees To The EU, EEA Or Switzerland? Don't Forget The Social Security Position

Publication Date24 February 2021
SubjectEmployment and HR, Retirement, Superannuation & Pensions, Employee Benefits & Compensation
Law Firmlus Laboris
AuthorMs Victoria Goode (Lewis Silkin) and George Carey (Lewis Silkin)

In a welcome move last week, the EU notified the UK that all EU countries will apply the 'detached workers' exception to UK employees who are temporarily seconded to work in the EU. Similarly, the UK will apply the detached workers exception for EU employees who are temporarily seconded to work in the UK. This article reviews the latest position.

Under the Social Security Co-ordination Protocol in the EU-UK Trade and Cooperation Agreement (the Protocol), the general rule is that employee and employer social security contributions are due only in one country. This is generally the country in which the employee is physically working.

The Protocol contains an exception for detached workers whereby employee and employer social security contributions continue to be paid in the employee's home country rather than in the country in which the employee is physically working (Host Country), subject to satisfying certain conditions.

If an EU country wanted to apply the detached worker exception, it was required to provide formal notice by 1 February 2021.

The deadline came and went and only a handful of countries had formally indicated that they would apply the detached worker exception. Some countries indicated informally that they would apply the detached worker exception; other countries indicated that they would apply a similar but different exception, whilst other countries had not declared their position. This potentially meant that the social security position for UK workers who were temporarily seconded to the EU would have been both complex and uncertain and, if social security was payable in the EU country in which the employee was physically working, the costs for the employer may have been prohibitive.

What does the detached worker exception mean?

Subject to transitional rules, if a UK employee is sent to work in an EU country after 31 January 2021, UK employee and employer national insurance contributions (NICs) can continue to be paid, and no social security will arise in the EU country, provided that:

  • The posting will not exceed two years.
  • The employee has not been sent to replace another detached worker.

Similarly, if an employee from an EU country is sent to work in the UK, no NICs will arise in the UK and social security will continue to be payable in the employee's home country provided the conditions above are met.

The UK has negotiated a separate social security agreement with Ireland, which also contains a detached worker exemption...

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