Social security

The risk that a workationer or business traveller becomes socially insured in the destination country and/or drops out of the coverage of the home country social security.

This dimension assesses the company risks of the temporary remote worker abroad becomes socially insured in the destination country and/or drops out of the coverage of the home country's social security, both of which are not desirable.  A Social Security Treaty is a legal agreement between two or more countries that outlines the rules and regulations regarding the social security benefits and coverage for individuals who move or work between those countries. These agreements are designed to prevent people from losing their social security benefits or being covered twice if they work or live in another country.

Consequences

• Contributions of € 5.000 to € 15.000

• Administrative obligations exceeding € 5.000

• Penalties and interest

Mobile working from abroad entails a twofold risk with regard to social security contributions. On the one hand, there is the risk that the employee loses the protection of the social security system of their home country and, on the other hand, the social security system of the destination country may apply. Both risks are relatively easy to manage in the European Union and other countries with a social security agreement.

Handling of risk

To assess and mitigate risks the following information is needed

· Nationality

· Second nationality

· Reason of stay

· Duration of trip

· Previous trips in that country

· Tax payment

In order to assess social security potential risks a workation can entail some information is required such as the employee nationality (and second nationality if it's the case), duration of the trip and social security number which would be required to issue an A1/Certificate of coverage. This document becomes quite relevant when it comes to remote work from abroad. When a talent works from abroad the authorities from the employment country need both to be notified and to be able to notify the destination country in order to avoid bureaucratic issues such as becoming insured in the destination country or losing the coverage from the employment country.

WorkFlex solution

WorkFlex supports employers with automated compliance risk assessments and implementation of relevant risk mitigation measures, including A1 certificates, CoC, PWD, insurance, and more. Upon approval of the employee request, WorkFlex can apply for an A1 or CoC in Germany, Austria, the Netherlands and the UK. After it has been issued - it will be uploaded to the platform. However, WorkFlex will always and immediately issue its unique WorkFlex Social Security Statement, the content of which is similar to an A1 or CoC (see example here). Moreover, for short requests (60 days or below) and for cases where a social security treaty applies, WorkFlex Social Security Statement ensures that the no-risk concept applies. Book a meeting with a Consultant to find out more

Deep-dive articles about social security

· Social security treaties: What’s it all about?

· How WorkFlex handles Posted Workers (PWD) notifications