The COVID-19 pandemic has drastically changed work arrangements. Teleworking has been introduced or expanded around the world to reduce the risk of infection at the workplace. This has also affected frontier workers in the European Union (EU). As they normally work in one country and reside in another one, changing the place of work to one’s home can influence which country’s social security legislation is applicable to them.
Being one of the regions most affected by the pandemic, EU countries rapidly introduced telework to reduce the spread of the coronavirus and ensure business continuity. According to a recent survey (Eurofound, 2020), 48 per cent of surveyed employees worked at home for at least some time during the COVID-19 pandemic, and 34 per cent were on full-time telework. This compares with a rate of only 15 per cent of workers in some type of telework before the onset of the crisis.
For frontier workers, the increase in telework arrangements may have important consequences in terms of their social security coverage. In line with guidance issued by the European Commission, a number of countries have therefore adapted the existing regulations with a view to ensuring continuity in the social security legislation applicable to them.
The impact of telework on the social security protection of frontier workers in the EU
Free movement of workers is a fundamental principle in the EU. Regulation (EC) No. 883/2004 on the coordination of social security systems, Article 1(f) defines a frontier worker as: “any person pursuing an activity as an employed or self-employed person in a Member State and who resides in another Member State to which he returns as a rule daily or at least once a week”. This legislation also applies to Iceland, Liechtenstein and Norway through the European Economic Area Agreement, and to Switzerland through a bilateral agreement.
Although general statistical data is unavailable, a study commissioned by the Directorate-General for Employment, Social Affairs and Inclusion of the European Commission, published in 2009, reported that there were approximately 780,000 frontier workers in the EU in 2006. Given that Bulgaria (2007), Romania (2007) and Croatia (2013) have since joined the EU, the number is expected to be even higher today.
Workers commuting across national borders are at risk of being subject to the social security legislation of more than one country or not being subject to the legislation of any one country. Therefore, under Regulation (EC) No. 883/2004, the EU protects the social security rights of persons moving across national borders and their families by coordinating the application of social security legislation between Member States. The Regulation stipulates that, as a general rule, persons are subject to the social security legislation of a single Member State. If persons pursue an activity in one Member State, they are subject to the legislation of that Member State regardless of their place of residence. If persons pursue an activity in two or more Member States and pursue a substantial part (over 25 per cent of working time) of their activity in the Member State of residence, they are subject to the legislation of the Member State of residence. If persons do not pursue a substantial part of their activity in the Member State of residence, they are subject to the legislation of the Member State in which their employer is situated.
According to the above provisions, if frontier workers who normally work in the Member State in which their employer is situated perform telework of more than 25 per cent of their working time, their social security status may change from the legislation of the country of employment to that of country of residence. This means that a country of employment and contributions are added to their insurance career, and the insurance period is divided into social security systems in multiple countries. Dispersion of the period of coverage may even prevent the insured from qualifying to receive a social security benefit or reduce the amount of the benefit. At the same time, for employers, a change in the applicable social security legislation may increase the administrative and procedural burden, as well as have a financial impact resulting from differences in contribution rates.
Ensuring continuity of the applicable social security legislation
To address these challenges faced by frontier workers in the context of telework, the European Commission and the Member States have taken steps to ensure continuity as regards the applicable legislation.
The European Commission clarified its views on this issue in the publication COVID-19: Information for frontier workers and posted workers (March 2020). The Commission states that for frontier workers who work exclusively in a Member State other than their country of residence, the current temporary teleworking situation should in principle not lead to a change in the applicable legislation. For workers who pursue an activity in two or more Member States, it explains that the legislation of a Member State of residence becomes applicable only if the average working time in the Member State of residence over a period of 12 months exceeds 25 per cent of the total working time in all Member States.
Furthermore, the Commission underlines that in cases where the social security legislation applicable to the frontier workers is to be changed, then the worker may make use of an exception stipulated in Article 16 of Regulation (EC) No 883/2004. This article indicates that upon an employee‘s request, an employer may apply to the competent authority of the Member State whose legislation the employee wishes to continue to be subject to, and the competent authorities may, by common agreement, provide for exceptional treatment in the interest of the employee.
Although these indications by the European Commission are not legally binding, they support a flexible interpretation in the best interest of frontier workers. The Commission also encourages Member States to make their own administrative arrangements on the matter.
A number of European Union countries have effectively taken measures in this regard. In Italy, the National Institute of Social Security announced on 15 April that the certificate of applicable legislation, which workers have obtained before the pandemic from the Member State in which they are insured, remains valid even if COVID-19-related mobility restrictions have changed the ratio of work performed in their country of residence.
Belgium has taken proactive unilateral measures to ensure that frontier workers remain under the same social security coverage. The Minister of Social Affairs and Public Health and the Minister for the Middle Classes, Self-Employed and SMEs informed that the periods of teleworking performed in Belgium by frontier workers due to COVID-19 will exceptionally not be taken into account for the determination of the applicable social security legislation. This decision allows frontier workers to continue to be covered by the social security legislation of the country of employment regardless of time teleworked in Belgium. The measure came into effect on 13 March 2020 and will be effective as long as the emergency measures taken by the Federal Government to limit the spread of the COVID-19 are in force.
In turn, Luxembourg has been preventing changes in the social security status of frontier workers through bilateral measures with its neighbouring countries. At the beginning of the COVID-19 crisis, the Minister of Social Security contacted Belgian, German and French counterparts in order to keep the social security situation of frontier workers unchanged despite increasing telework. As a result, Luxembourg and its three neighbouring countries agreed that the number of days of telework due to COVID-19 would not be considered in the decision on the applicable social security legislation. This agreement has been extended until 31 December 2020.
Similarly, France and its neighbouring countries have also agreed that workers will continue to be covered by the social security system of the country in which their employer is located, despite the significant use of telework. On 13 August 2020, the Directorate of Social Security, in consultation with the national authorities of Belgium, Luxembourg and Switzerland, set the deadline of 31 December 2020 for the flexible treatment of the applicable legislation.
Significantly, the social security agreement between France and Monaco contains a provision concerning employees who telework in a contracting state different from where the employer is located. This provision stipulates that the legislation of the country of the employer shall apply to an employee on condition that the employee works more than one-third of the weekly working hours in the country where the employer is located. This provision has now been lifted.
Social security institutions of other countries such as Czechia, Finland, Germany, the Netherlands and Switzerland have also taken measures and followed the European Commission's interpretation to ensure that the exceptional telework situation due to COVID-19 would not affect the applicable social security legislation.
Frontier workers are an important reflection of European integration and the freedom of movement in the EU. The EU has enacted regulations to ensure that its citizens have equal treatment and access to social security no matter where they live or work in the EU.
Faced with rapid changes in working arrangements due to the COVID-19 pandemic, the European Commission and social security institutions of EU Member States have swiftly responded to ensure that existing rules do not disadvantage frontier workers who are obliged to telework. Flexible interpretations and provisional measures have been put in place on a temporary basis, and have usually been extended in view of the second wave.
However, the experience with alternative working arrangements during the pandemic is likely to impact work preferences and work patterns in the longer-term. A recent survey (Eurofound, 2020) showed that over three-quarters of EU employees surveyed in July 2020 would like to continue working from home at least occasionally, even after the end of COVID-19 restrictions.
This indicates that social security regulations for frontier workers may need to evolve to respond to a more permanent increase in teleworking across the EU.
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