14 March 2019 - Reading time: 4 Minutes
What will Brexit mean for the social security rights of UK nationals currently working in other EU states, and of nationals of the remaining 27 member states now in the UK? Will these cross-channel workers benefit, for example, from state pension contributions they made in the UK and vice versa if they return to their countries of origin?
These are questions that HR and payroll teams are likely to be asked more and more often as the UK’s departure from the EU, scheduled for 29 March 2019, approaches. Like much else surrounding Brexit, the answers are still shrouded in uncertainty. But no business can afford to wait and see what Brexit finally looks like before starting to prepare for it.
“You need to plan for all contingencies, including the possibility that the imminent loss of social security entitlements leads to multiple resignations,” says Elke Brees Senior Consultant, International Employment, SD Worx. “If that happens and you have plans in place to improve retention or attract talent from new sources, for instance, you’ll be able to maintain business continuity.”
The EU’s current social security co-ordination regulations require member states to give each other’s nationals equal treatment when it comes to access to pensions, unemployment and other benefits. The regulations also allow insurance accumulated in different countries to be aggregated, and enable some benefits to be “exported”.
Under the withdrawal agreement reached between the UK and the EU in November 2018, these principles would continue to apply during a transition period ending on 31 December 2020. But if the UK Parliament continues to reject the agreement, there will be no transition period, and current social security rules will cease to apply from the moment the UK exits the EU.
However, the European Commissions recently published a proposed regulation that aims to safeguard the social security entitlements of people moving between the UK and the EU under a no-deal scenario. This measure would ensure that member states continue to take account of periods of insurance, employment, self-employment or residence in the United Kingdom before Brexit when calculating social security benefits such as pensions.
Announcing the proposal, the Commission stressed that it “by no means replicates the significant advantages” of the withdrawal agreement. It does not cover any rights that individuals accumulate after 29 March, and nor does it mean that cash benefits, such as child benefit, will continue to be exportable. Intended to be a temporary measure, it will be adopted unilaterally by the EU.
Some individual EU states are making their own plans to protect social security rights from the negative impact of a no-deal Brexit.
In Germany, the federal government hopes to negotiate a new bilateral agreement with the UK. In the meantime it has approved a draft bill ensuring that existing social security rights continue to apply and that national insurance contributions paid until Brexit and for five years after Brexit would be taken into account. “as if the UK were still a member of the EU”.Similarly, Belgium has said it would continue to apply existing European regulations on social security to resident Britons until 31 December 2020.
Other countries with plans to protect social security rights after a no-deal Brexit include France, the Netherlands and Sweden. But in most cases, governments have said that they would only implement these plans if the UK did the same for their nationals living and working in Britain.The UK government has said it is exploring options to protect past social security contributions made in the EU and the UK, and reciprocal healthcare arrangements in the event of a no-deal scenario.
Social security rights are important for employees. For those working cross-channel the risk of losing these rights after Brexit could influence decisions on whether to join or remain with employers.
Continuing uncertainty about what could happen to these rights may tempt some HR teams to wait for more clarity before taking action. But this is not the best way forward. “Instead,” as the CIPD’s guide to Brexit workforce planning says, “it may be more appropriate to recognise from the outset that plans need to be adapted over time in response to how the future actually unfolds.”
Whatever the future brings, SD Worx can help your business navigate the complexities of Brexit and make sure it has the skills and talent needed for success in a transformed European employment landscape.
SD Worx offers expert advice on post-Brexit immigration and residency rules, visas, work permits, social security rights and other employment issues.
SD Worx explains the importance of balancing global and local payroll operations for expanding international businesses and how a multinational payroll provider can help keep this balance.14 May 2019
Britain’s decision to leave the European Union has left many employees on both sides of the English Channel in limbo – uncertain about how long they will be able to live and work in the country they’ve come to call home.30 April 2019
Running global payroll for an organisation operating in multiple countries can, at times, become somewhat overwhelming. With various rules and regulations to comply with and huge data sets to handle, many payroll professionals would welcome a helping hand. Today, with advancements in HR and payroll technology, that hand doesn’t have to be human—in fact, embracing these technologies can unlock the power of payroll within an organisation.4 April 2019
The clock is ticking on the UK’s exit from the European Union on 29 March 2019. But we still don’t know the terms of its departure or what impact Brexit will have on employment both in the UK and the 27 remaining EU member states. Faced with this level of uncertainty, HR and payroll teams need to start their HR Brexit planning right now.18 February 2019
Today’s business world is becoming increasingly international as technological advancements make it easier for organizations to operate in multiple regions, or even globally. However, when it comes to modern international payroll, many businesses struggle to run their payroll on a global scale.12 February 2019
After a year and a half of negotiations, on 13 November 2018 British Prime Minster May and the European Union reached a technical agreement on the UK leaving the European Union. The deal sets out the general terms on how the United Kingdom and the European Member states will cooperate after the UK has left the EU. The impact for you as an employer with employees inside or from the UK is now also clear. What you should know.30 November 2018
Expanding businesses internationally can mean increased profit, a better reputation and more capital to invest in getting the best talent from your industry. But international businesses face newer challenges, chief among which is working with international teams that are based in various cities, regions, countries and potentially even continents.
12 November 2018
The SD Worx team has returned from another great annual UNLEASH conference. Over 5,000 attendees gathered at the RAI Exhibition and Conference Centre in Amsterdam – the site of the first conference seven years ago.7 November 2018
Payroll is the lifeblood of an organization, so getting it right is crucial. When organizations branch out into new geographical locations, the risk of payroll mistakes heightens. It’s a scary thought for HR and payroll professionals.
30 October 2018
Business leaders are always searching for dynamic new ways to improve their business strategy, but there's one source of data which still remains largely untapped. There is a wealth of potential strategy ideas to be found in a place businesses already have unrestricted access to - their payroll system.
So, how can both large and small companies start utilising payroll data today to breathe new life into stale strategies?24 October 2018
If no agreement between the UK and the European Union is reached at the EU summit on 18 and 19 October, the transitional period that would have applied until the end of 2020 will expire. As a result, on 29 March 2019, the UK’s membership in the EU will end, and EU law will no longer apply. If your company employs people in or from the UK, this change could be far-reaching. So, take the bull by the horns and avoid unpleasant surprises caused by a ‘no deal’ scenario by making the right preparations.16 October 2018
September: the month that children dread as they make their return to school after the freedom of the long summer months. But for adults, especially those in the payroll industry, after the quiet summer period September should be a time to be motivated and to adopt that ‘back to school’ thinking. It’s important for teams not to be stagnant. In the ever-developing payroll industry, adaptability is key and so learning shouldn’t stop just because you’ve left school—in payroll and HR it’s all about continuous learning.18 September 2018
The multinational payroll industry is set to be worth 4.8bn by 2021, yet, despite the evident power of payroll, only a third of multinational organizations have a global payroll provider. Instead, they rely on a disparate selection of multiple local providers and therefore have no access to collated data or a clear insight into their employee attrition, engagement, or retention.30 August 2018
Is your HR and payroll team feeling the heat this summer? With the weather heating up, most of us want to get out and enjoy the sun or escape on a holiday. However, with more staff members out of the office, this can mean that the payroll team might be running on reduced numbers. And, typically, less team members results in a higher workload for those in the office. This is where HR and payroll technology can help, giving HR teams a well-deserved summer holiday.3 August 2018
The HR and payroll industry is in a constant state of change. New laws and regulations are introduced around the world, some of which—including GDPR—change the way the whole organization handles its processes and services.26 July 2018
Summer is finally here—and before long it will be over. HR and payroll teams face various challenges over the summer months, from increased staff holiday to keeping track of summer interns and flexible working.16 July 2018
Payroll data. How often do we stop and think about how important it is to a business? Although payroll is often viewed as a back-office function, it is an essential part of any organisation, and is much more than just payslips.5 July 2018
The multinational payroll market is growing at an impressive rate, with the entire payroll services market expected to reach 4.8 billion by 2021. The demand for international payroll services are increasing, due to the heightened need for compliance to local laws and legislations, and a demand for more comprehensive technology. However, even though the payroll market is growing, many organisations still aren’t unlocking the power of payroll.3 July 2018
The results of SD Worx’s recent international survey are in! With 1,500 respondents from nine European markets, the survey reveals that up to 87% of business leaders are now asking for employee data to inform business decisions—HR and payroll data is now being regularly used by business leaders.11 June 2018
The HR and payroll industry is in constant change, with digitalisation, GDPR, and the gig economy effecting the HR and payroll department in organisations around the world. So, how can you ensure that both your HR department and employees are able to keep up with the pace of change? It’s time to unleash the flexibility of your HR.26 April 2018
Payroll is a vital part of any organisation, whether it’s a local business or a multinational corporation. A simple payroll error can cause a large amount of damage, so getting it right is essential.
30 March 2018
PAREXEL provides best practice examples to international organisations.
With the General Data Protection Regulation (GDPR) coming into effect in May 2018, all organisations who handle data of EU citizens will need to comply with new guidelines. By nature, HR departments hold personal and sensitive employee data, including payroll data. However, with an increasing amount of payroll and HR departments adopting automated payroll processes, the question arises: how do you become compliant in a digital world, especially if you are an international company?12 March 2018
With more and more employees relying on technology and flexible working than ever before, the world is becoming increasingly connected and globalised. However, with this new reliance on global working, what do HR and payroll teams need to consider when implementing payroll for multinational companies?7 March 2018
The end of the payroll year is typically a very stressful time for payroll teams. With an extensive amount of tasks to be completed within tight deadlines, any mistakes can be costly.
However, the end of year process can be drastically simplified by engaging with tailored payroll software. This technology can be utilised to assist payroll professionals throughout the year, but how can it help payroll teams in April each year?27 February 2018
In an increasingly globalised world, there is a vast array of opportunities for businesses to explore. For companies looking to expand their international reach, payroll is one of the biggest consideration factors. Operating in multiple countries has its fair share of challenges: each region has its own local legislative requirements, and complying with these is crucial in maintaining both reputation and revenue. Here’s how outsourcing can help.12 January 2018
Technological advancements are helping to turn a vision of digitally accessible, automated payroll processes into reality. Here’s five predictions for the future of payroll:5 December 2017
A recent survey carried out by SD Worx revealed that out of 4,000 European employees surveyed, 44% had been paid late by their employers and 48% of those that had been paid late had also been paid incorrectly. The research exposes several risks for businesses associated with not paying their employees correctly: let’s explore the top three.13 November 2017
Businesses in every industry have been affected by the way that we now rely heavily on technology. Technology is now a part of everything we do – both at home and work—and in order to stay relevant in today’s world, all industries must continue to be innovative and remain up to date with technological advancements, especially in the workplace.19 October 2017
If someone was to ask you how much your payroll operations cost, would you know the answer? It seems like a straightforward question, yet the answer for many HR professionals is often hard to pinpoint. Understanding – and therefore being able to make future projections – about how much your payroll costs requires a clear appreciation of various business components.10 October 2017
The objective for payroll professionals used to be simple: all they had to worry about was paying employees accurately and on time. As organisations increasingly look beyond local domestic boundaries, the complexity of payroll operations has expanded and evolved so that the level of payroll sophistication has increased As a result, the needs and requirements of organisations globally have become more complex.6 August 2017
With Britain voting to leave the EU last June, 2016 was a big year for pan-European news. And, while the full implications of Brexit remain to be seen, it is clearly creating much discussion amongst business leaders who are already starting to plan ahead for the legislative changes that will no doubt impact both their operations and compliance.
One of the business areas most likely to be affected is international HR and payroll, so with that in mind, ‘Brexit and Business’ will be one of the key themes at our upcoming 2017 SD Worx European Conference. This year’s event will be bigger and better than ever before, taking place on the 8th February at London’s Hilton on Park Lane.