Expatriate workers may continue in Social Security after the maximum contribution period in another country

In recent days, the Government has approved two measures that directly affect the international mobility of workers in terms of their contribution to Social Security and social protection. The first of these initiatives affects workers displaced to other countries by their companies, who now contributed to the Spanish Social Security for the maximum time established by the bilateral agreement with the country in which they were posted, but once this period has elapsed, These workers, also known as expatriates, had to start contributing exclusively to the Social Security of the country where they resided, with the consequent loss of rights, especially retirement pensions, that this implied for them.

This situation, as explained by the partner of People Advisory Services of EY, Juan Pablo Riesgo, “led many workers to ask their company to return to Spain once the maximum period of contribution to the Spanish system had elapsed from the country of destination, so as not to lose the levels of protection that are acquired with the contributions to the Spanish Social Security”. Moreover, from the Ministry of Social Security itself they recognize that “this circumstance has been discouraging in many cases workers, especially those who are in a stage of their working life close to retirement, to accept the proposal of their companies to go abroad to work, preferring to remain in Spain and, therefore, renouncing the most advantageous working and economic conditions that travel to another country often entails”.

To prevent expatriate workers from requesting to return to Spain or giving up leaving from the start due to the possible loss of protection, the Ministry of Inclusion, Social Security and Migrations published a ministerial order on July 20 in the Official State Gazette ( BOE) according to which workers posted by their companies to other countries are allowed to remain linked to the Spanish Social Security, with a situation assimilated to that of registration, “once the maximum period of duration provided for the application of the legislation of Social Security of the country of origin, including extensions that have been authorized”, in the event that the bilateral agreement with the specific country allows said extensions. This is indicated in the text published in the BOE, which also states that this new regulation will enter into force on November 1 and will therefore allow these employees to start contributing in the country where they are and, at the same time , continue linked to the Spanish Social Security.

This voluntary connection without time limits of expatriate workers to the Spanish Social Security will also apply to those displaced to countries with which Spain does not have a bilateral agreement or any international instrument on the coordination of Social Security systems, or even where this exists. Lastly, if the worker in question could not fit into it, explain the normative text.

The senior immigration lawyer, Mercedes Puy Pérez de Laborda, assures that with this legal change, “after the maximum time of contribution in the Spanish system that bilateral Social Security agreements allow displaced persons, which usually range between four and six years Depending on the country of destination, now the worker can continue to be linked to the Spanish system with a situation assimilated to that of registration, so that he will no longer have contribution gaps and will be able to collect all his full benefits in the future, mainly the retirement pension ”.

New regulation for cross-border

The second of the regulations recently approved by the Government in this matter consists of the signing by Spain, through the Ministry of Foreign Affairs, European Union and Cooperation, of a Framework Agreement, which allows regular cross-border workers who telework , to be included in the Social Security regime “of the State in which the employer has his headquarters or his domicile, provided that the cross-border teleworking carried out in the State of residence is less than 50% of the total working time”.

At this point, Puy Pérez de Laborda explains that until now this percentage was 25%, so raising it to 50% allows cross-border workers to work longer from another neighboring country without having to submit to the Social Security rules where they reside. and from where you usually telework. For example, adds this lawyer, the new rule would apply to a French worker who resides part of the week or year in Spain from where they telework and who, from now on, if said telework does not exceed half the time of their activity may continue to be included in the French Social Security.

For Pérez-Llorca’s Labor partner, Daniel Cifuentes, “this order was necessary because it clarifies where the teleworker who comes to Spain from another country has to pay contributions.” In many cases, he adds, efforts were made for the teleworker to pay contributions where he consumes and enjoys public services, but now it will be necessary to prove that telework is greater than 50% for this to be the case.

For its part, Riesgo, maintains that the Government has made this decision “to give legal certainty to foreign companies and that they can allow their employees to telework from Spain, at least 49% of the time, without having to open a contribution account in the Spanish Social Security and having to contribute here for his worker”. This idea is shared by Cifuentes, who points out that it is more difficult for companies in economic and bureaucratic terms to have to pay contributions in the country where their employee teleworks.

This rule, which came into force on July 1 in the first signatory countries and in Spain will be applicable from September 1 (it was published in the BOE on August 4), however, it can only be applied in the States that have signed this Framework Agreement which, as of June 30, 2023, were the following: Germany, Switzerland, Liechtenstein, the Czech Republic, Austria, the Netherlands, Slovakia, Belgium, Luxembourg, Finland, Norway, Portugal, Sweden, Poland, Croatia , Malta, Spain and France.

This framework agreement defines “cross-border teleworking” as “any activity that can be carried out from anywhere and that could be carried out on the premises or at the employer’s home and that: is carried out in one or more member states other than the one in which that the premises or domicile of the entrepreneur are located; and, secondly, that it relies on information technologies to remain connected with the employer’s or company’s work environment, as well as with clients”.

Although Puy Pérez de Laborda specifies that this regulation is not intended for all workers who are known as digital nomads in general, who reside and work most of the time in another country, but rather for those cross-border workers who cross into neighboring countries through Teleworking intermittently but habitually. In fact, to be a digital nomad in Spain, the employer is required to grant a “coverage certificate” for the period stipulated by law, according to which they are allowed to work in another country under the protection of the Social Security system of the State where they are located. your company. This regulation is different in each country, adds this expert.

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