Brexit and cross-border work: a 'solution' afoot

Brexit. On 30 March 2019 the time has come, unless British and European politicians pull a rabbit out of their hat once more. The first rabbit was the Brexit Agreement, 585 pages long. It tells about the many connections between the United Kingdom and the Continent. The United Kingdom resolutely rejected this agreement.

And now? We read it in the newspapers. There will be more traffic jams in Dover. Belgian customs will work overtime. But entrepreneurs have much more than customs to worry about. The Brexit has a big impact on employees - and their employers - who cross the Channel. The situation is serious, but there is no need to panic yet. On both sides of the Channel a solution is afoot.

Social security and posting: how it works today

A Belgian entrepreneur who temporarily employs an employee in the United Kingdom must only deduct and remit Belgian social security contributions. Employer and employee must not pay social security contributions in the United Kingdom as the employer has posted the employee abroad. As proof, the Belgian administration issues an A1 form. The same rule also applies in the opposite direction. The British employer and employee only pay social security contributions in their home country and are exempt in Belgium. This coordination rule applies throughout the European Union and should stimulate free movement.

A treaty dating back from 1957

If the United Kingdom leaves the European Union on 30 March, the European coordination rules will no longer apply. Although Belgium and the United Kingdom did conclude a treaty in 1957, it is not meaningful to stick to revive old agreements. The labour market has changed a lot in the meantime. More and more employees work alternately in different countries. Those who work in two or more EU Member States are generally subject to the social security system of their place of residence. The treaty does not address this situation; European rules do.

A temporary solution afoot

The United Kingdom is working on a concrete solution for a hard Brexit. It transposes the European coordination rules into national law. The Belgian employee posted to the United Kingdom remains, for the United Kingdom, subject in the home country. So the Belgian employer and employees are exempt from social security contributions in the United Kingdom.

Belgium opts for the same approach. So this means that nothing will change, at least for the time being. Actually, it is just a transitional solution which will end on 31 December 2020. Meanwhile, Belgium and the United Kingdom must negotiate a fundamental solution: a new treaty that will replace the 1957 treaty.

30 March 2019 is quickly approaching. Meanwhile, the Belgian Brexit emergency legislation still has to be approved by the Chamber.

Pensions, health care and much more

The new solution proposed by Belgium, albeit only temporary, also covers the benefits. In this way, Belgian pensions can be paid to retired employees in the United Kingdom. A Belgian resident on a (business) trip in the United Kingdom will continue to have access to all necessary medical assistance on the basis of the European Health Insurance Card (EHIC).

On 30 January the European Commission elaborated its own proposal. The text must guarantee that EU citizens who made use of their right to free movement before the withdrawal date, maintain their social security rights. Unlike Belgium's solution, the European Commission only regulates situations before the Brexit.

A broader approach is needed

The more EU Member States join the solution proposed by Belgium, the better. Especially since more and more employees work alternately in different EU member states. Suppose a British employee who works in Belgium and in the Netherlands. The solution can only be fully effective if the Netherlands adopt the same approach.