EU Social Security a real risk for recruiters
If the authorities discover your EU expatriate placement (operating outside their home country but within the EU) is not dealing with their social security liabilities in accordance with EU regulations, your client could face heavy statutory penalties and subsequently impose on you a financial retribution and a badly damaged reputation.
· Under the terms of your client’s contract, it is likely you are exclusively responsible for your placement’s tax and social security liabilities. ItsInternational believes you cannot rely on a defence which claims your contract is with an incorporated intermediary (such as an & lsquo;international umbrella’, & lsquo;international management company’, & lsquo;local service provider’, & lsquo;PSC’) chosen by your placement and not by you.
· As highlighted in http://europa.eu/youreurope/citizens/work/work-abroad/posted-workers/indexen.htmif you place an EU citizen on a fixed term assignment in an EU country which is not their home country, that & lsquo;expatriate’ is liable for social security in the country of work from day one-unless he or she has obtained an AI Certificate which allows them to continue paying social security in their home country.
· Some recruiters continue contracting with international umbrellas which obtain low-cost, A1 Certificates from either Bulgaria or Gibraltar or Spain or Switzerland. This is done to boost net income retention. However, it disregards the fact that most, if not all, of those placements had not lived and worked in the & lsquo;A1 country’ for several months immediately prior to entering the country of work. Neither had they ever visited those countries nor had any intention to do so.
· http://europa.eu/youreurope/citizens/work/unemployment-and-benefits/country-coverage/indexen.htmincludes this key statement: “You (referring to your placement) may not choose which country you will be covered by (for social security). When working or living abroad, you will have social securitycover in either your home country or the host country. In either case, you'll need to make arrangements to make sure you stay covered after you move to your new country. (When) posted abroad on a short term assignment of less than 2 years (and) as anEU national, you can worktemporarilyin anotherEU countryand still remain covered by your home social security system, that is the system of thecountry where you usually work.”
· ItsInternationalsuggests you Insist your chosen intermediary provides you with either a copy of your placement’s registration for local social security or a copy of the A1 Certificate from your placement’s home country. Such evidence of compliance can help mitigate any accountability your client and you may face during a future social securityaudit or investigation involving a placement’s non-compliance with local and EU social security laws.
ItsInternational facilitates special immigration, tax management and payment services for individuals placed on fixed term assignments in many countries across the world. The company offers solutions which address & lsquo;risk’ to help protect recruiters and their clients as well as enable valuable placements to realise highly desirable income retentions from their assignments.