Transitional period for the neutralization of telework periods of frontier workers extended

Background

The Covid-19 crisis introduced a major change in work patterns, including teleworking, that is going to last in the future. Therefore, the EU and national governments agreed in the past to neutralize periods of work that were performed outside the usual place of work due to the Covid crisis to avoid changes in the applicable social security scheme. The details of the Covid concession measures can be read here.

During summer, the Administrative Commission for the coordination of social security systems has reached an agreement to create a transitional period specifically for teleworking frontier workers within the EU, again to avoiding a switch in the applicable social security scheme. This agreement would come to an end on 31 December 2022.
 

Extended transitional period for frontier workers

The transitional period agreed during summer was intended to allow frontier workers to continue working from home while granting employers and administrations more time to reflect on future initiatives, impact and policy making.

The famous 25% -rule, indicating the residence country as competent for social security when at least 25% of labour time is performed there, has been set aside and will continue to be set aside until 30 June 2023.

There is no change in policy or position compared to the previous transitional period. The full details can be found in the previous alert.

A summary of the key takeaways that remain unchanged:

• The transitional period applies to both existing and new cross-border employment situations;
• It only applies in relation with countries bound by the European coordination rules on social security - for other cross-border situations the standard rules have regained full applicability as of July 1st, 2022;
• The notion “frontier worker” is applied broadly by the Belgian authorities allowing all employees living outside the state where the employer is vested to rely on the transitional measure;
• An A1 certificate is not required for the Belgian authorities, however, a Limosa notification is mandatory;
• The decisions of the Administrative Commission are not legally binding and it remains unsure if all member states will apply the transitional period and share the same interpretations.
   

What’s next

The broader discussion on EU-level to modify the social security coordination rules are ongoing. The Member states are working towards a more general and definitive solution in different working groups. While the extension of the transitional measures is a very welcome initiative, it also confirms the difficulty of reaching an agreement on EU level on the adoption of new coordination rules that reflect the new ways of working while safeguarding the social security rights of individuals and the coordination mechanisms.

Feel free to reach out to your EY contact for further guidance and questions on this topic. EY will of course keep you posted on future developments.