Last month our article discussed the employment law implications to consider if your employees are working from abroad during the pandemic.
Since then, we have entered into a second lockdown in England and, with Christmas approaching, many more employees may have chosen to relocate for the next few months to see out the winter.
With Brexit approaching, this could have significant ramifications for employers.
Social security contributions
Generally, social security obligations for employers and employees arise in the country in which the employee is carrying out their working duties. However, there are currently exemptions to this general rule for countries in the EEA and Switzerland.
This means that UK employees and their respective employers can continue to pay UK national insurance contributions and not social security contributions in the country where the employee is working (as long as certain conditions are met). But, from 1 January 2021, the UK will no longer be in the EU.
In the absence of a trade agreement, this exemption is unlikely to apply to the UK, meaning social security contributions may be due to the employees’ ‘host’ country.
We advise you to check local legislation and plan ahead. You may want to get employees to return from abroad to avoid this additional cost to the business.
Penalties for illegal working can be enforced against employers and employees and can be substantial. Most jurisdictions (including the UK) prohibit work under business visitor visas, so legal advice must be sought, relevant to each jurisdiction.
Whilst UK nationals can currently live and work across the EEA with ease, this is likely to change come 1 January 2021. Again, in the absence of a trade agreement, we do not know what the position for UK employees will be. However, we do know that EEA nationals will require a visa to work in the UK from 1 January 2020 and the EEA is expected to adopt a similar regime.
Consideration should also be given to your employees who are not UK nationals, whose immigration status’ could be impacted by sustained periods overseas. Do speak to our immigration team for specialist advice.
We are helping our clients to #readyforBrexit ahead of the exit date on 31 December 2020. Visit our Brexit hub to access resources and insights to help your business to prepare.