The United Kingdom pulling out of the European Union (EU) has created uncertainty about the social security regime applicable to employees and self-employed workers in cross-borders situations, whether on secondment or working in several EU states, since the applicable social security regime has been a topic governed by EU regulations over several decades. There are also frequent questions concerning employees hired under local contracts in France or the United Kingdom (“UK”).
Our experts have set-up the below FAQ covering the main questions raised and issues faced by companies.
Brexit context for social security
When does Brexit actually come into force?
The United Kingdom formally left the EU on January 31, 2020 midnight, upon their ratifying the Withdrawal Agreement.
What does transition period mean?
The UK has left the EU and the transition period after Brexit ends on December 31, 2020.
What does transition period mean, as far as the applicable EU regulations are concerned?
The Withdrawal Agreement provides that all the EU regulations remain applicable in the United Kingdom during the transition period from February 1 to December 31, 2020.
What does transition period mean, for the application of the EU regulation N°883/2004 governing social security?
Employers with employees seconded or working in multi-states situations before December 31, 2020 may file an application with the relevant social security authorities for an A1 certificate through December 31, 2020: the competent social security authorities determine the applicable social security regime.
Where do we stand as far as the negotiations regarding social security applicable in case of employees seconded to or from the UK, as of January 1st, 2021?
The ninth round of UK-EU future relationship negotiations has just ended, with no deal agreement reached by the parties regarding social security.
Uncertainty remains therefore as of today, for seconded employees and multi-state workers, together with their employers, regarding the social security regime applicable from January 1, 2021. If no international agreement applies, any professional activities performed in France give rise to French social security charges.
Secondment before December 31, 2020 to the UK of an EU citizen employed by a French company:
What is the Brexit impact?
The EU regulation n°883/2004 is applicable:
- The secondee may remain in the home (French) scheme and is not required to contribute in the host (UK) under the terms and conditions stated by Article 12 or 16
- The employer must apply for an A1 certificate. This certificate is the document certifying that the home (French) country social security regime is continued
When does the A1 certificate expire if the secondment started prior December 31, 2020?
Until now and notwithstanding the actual end date of the assignment, the French social authorities used to issue A1s expiring on December 31, 2020, disregarding the provisions of Article 30 of the Withdrawal Agreement that provides that EU citizens who are employed or self-employed in the UK or in a EU Member State upon the end date of the transition period and who are governed by Chapter II of the EU social security regulation (N°883/2004) are covered as long as they continue without interruption to be in this situation involving both a Member State and the UK.
The French social authorities recently confirmed to us having instructed the social security office (« CPAM ») to cease this practice concerning the end date of A1s. From now on, the A1s for secondments staring prior December 31, 2020 shall be delivered for the entire secondment duration.
How to get an amended A1 certificate if the present expiration date is December 31, 2020?
We suggest filing a request for amendment with the relevant CPAM, based on the initial duration (initial end date) indicated in the application.
An employee who is about to file an A1 application before December 31, 2020 in connection with a secondment to the UK:
The relevant CPAM must issue an A1 covering the entire secondment period.
Secondment to France before December 31, 2020 of an EU citizen employed by a UK company
What is the Brexit impacts?
The EU regulation n°883/2004 remains applicable:
- The assignee may remain in the UK scheme and is not required to contribute in Frances under the terms and conditions provided by Articles 12 or 16;
- The UK employer must apply for an A1 certificate with the UK social security authorities.
What is the end date of the A1 certificate in such case?
The UK social security authorities strictly apply Article 30 of the Withdrawal Agreement: they deliver A1s covering the duration of secondments.
The seconded employee will continue to be registered with the UK social security regime: employer shall pay the contributions into the UK scheme during the whole secondment period.
Assignee working before December 31, 2020 in more than one EU country including France and the UK (multistate workers)
What does the current EU social security regulation provide?
Such employee or self-employed individual working in more than one country before December 31, 2020 is governed by Article 13 of the EU social security regulation.
The employer (or the self-employed individual himself) shall file the A1 application with the social security authorities of the state of residence of the employee or of the self-employed worker. This A1 certificate will be the document justifying the applicable social security regime.
What about the employee (or the self-employed individual) who resides in the UK?
The UK social security authorities strictly applying literally Article 30 of the Withdrawal Agreement: they deliver an A1 certificate covering the duration of the multi-state situation.
What about the employee (or the self-employed individual) who resides in France?
The CPAMs shall apply strictly Article 30 of the Withdrawal Agreement and thus deliver an A1 certificate covering the duration of the multi-state situation.
Until recently the French authorities used to state an expiry date of 31 December 2020, disregarding the actual end date of the multi-state position as filed in the A1 application, however the French authorities have instructed the CPAMs to cease this practice.
What about the employee (or the self-employed individual) residing in France who has been issued an A1 certificate expiring on December 31, 2020?
We suggest requesting the amendment of its end date with the relevant CPAM, based on the initial end date indicated in the application.
Local employment contracts: UK citizens holding French employment contracts, French citizens holding UK employment contracts
What is the applicable social security regime for a French national residing and working in the UK under a UK employment contract?
He/she is compulsorily subject to the UK social security regime: his employer and himself/her are compulsorily subject to the UK social security legislation.
What is the applicable social security regime for a UK national residing and working in France under a French employment contract?
He/she is compulsorily subject to the French social security regime: his employer and himself/her are compulsorily subject to the French social security legislation. All social contributions are due in France.
When the individual is employed by a foreign company and he/she does not work for a French establishment of his/her employer located in France, the contributions must be paid to the CNFE (“Caisse Nationale des Firmes Etrangeres”).
Covid-19 Pandemic: What is the social security regime for the newly hired employee of a UK company, not currently residing in the UK, who is hired under a UK employment contract and cannot yet join his UK place of work due to Covid-19 travel restrictions?
We recommend that the employer file an application for an A1 certificate under Article 16 of the EU social security regulation: this provision enables the States to jointly agree on exceptions to the EU secondment or multi-states rules for the benefit of the concerned individual.
Although in such situation, the individual is neither seconded nor performing a multi-state activity, the States may agree voluntarily and on an exceptional basis, for the registration with the UK social security regime or for the maintenance into the social security regime of his/her current country of residence.