Risks of breaches in Social Security during international mobility
Employees who are sent to a Member state of the EU, and the purpose of these trips is not to provide services but to hold meetings, attend conferences, etc.
Mobility of Employees
They are employed in a Member State of the European Union by their employer and are sent to another country to provide a service maintaining the legislation of the country of origin.
In both cases, we find frequent practices within these companies regarding the displacement of workers such as:
- 88% of companies do not audit their temporary displacement processes for frequent travellers.
- The EU and Social Security find themselves in a constant fight against so-called “PO box businesses” and undeclared work.
A PO Box business is a company without any real economic activity in the country which they have their headquarters and where they hire workers, but they have activity in other Member States of the EU.
The real establishment of these businesses depends, not only on how or where they declare their activity, but also the percentage of turnover in each country.
What does the EU do in this regard?
- The recent establishment of the European Labour Authority with the intended purpose to grant better access to workers and businesses to information about their rights and obligations of workers and businesses.
- One of their objectives is to provide support to national labour authorities in their transnational activities, facilitate joint, simultaneous, or subsequent inspections between two or more EU Member States to fight against undeclared work.
- They also coordinate inspections, but it is not a European labour inspection.
New Busines Challenges
In the framework of established changes with the EU Directive 2018/957, that regulates transnational labour services provided, businesses need to plan in detail the legal questions surrounding the movement of workers and create a strategy focused on developing the following five points:
- Importance of A1
- Fraud prevention
- Real establishment of the business
- European Labour Authority
This information does not constitute under any circumstances legal advice, serving only for informational purposes. In case you need professional services in Global Immigration and Mobility, please contact us.
* It should be taken into account that the regulations of any of the countries analysed as well as the established procedures may change at any time and without prior notice.
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