Skip to content Social security is a fundamental element of employment contracts. The aim of social security in labour law is to guarantee protection and welfare to workers, in different contexts and situations.
However, when work is carried out abroad, complex issues arise on the relevant jurisdictions and the application of international treaties.
How does social security work?
Social security is a system that provides financial protection and social assistance to workers and their families, in circumstances such as sickness, injury, unemployment, maternity and retirement.
In many countries, social security is managed through mandatory contributions of employers and workers. Such contributions are then used to finance the benefits provided by the system.
International social security
International social security in labour law refers to the social protection of the citizens of a country, who habitually reside in another country. Such protection is granted through international regulations.
In the European Union, social protection is realised through the application of EU Regulations on social security. Regulations are immediately and directly applicable in the 27 EU Member States.
To determine the applicable legislation on social security in the case of remote work abroad, a distinction is made between the regulations in force in EU Member States and those in force in extra-EU States.
In the European context, starting from May 1st 2010, the regulations currently in force are Regulation (EC) n. 883/2004 and its implementing Regulation (EC) n. 987/2009.
In relation to telework abroad, on June 21st 2023, the European Commission issued a multilateral Framework Agreement on the applicable legislation in terms of social security.
Outside the European Union, in the absence of multilateral or bilateral agreements governing social security, the applicable jurisdiction is determined by analysing the legislations of both the country of origin and the host country.
Social Security in Labour law: Juridictions applicable to work abroad
In the case of work carried out abroad, some questions arise on the jurisdiction applicable in terms of social security.
In general, there are two main jurisdictions to be considered:
- Legislation of the State of residence. In many circumstances, workers may continue to be subject to the legislation of the State where they reside, even if the work is carried out abroad. This depends on various factors, including the expected duration of the tasks performed abroad and the bilateral or multilateral agreements between the States involved.
- Legislation of the State where the work is carried out. In some cases, in particular if the performances abroad are of long duration or permanent, workers may become subject to the legislation of the State where they actually carry out their tasks.
Application of International Treaties
In order to solve issues related to social security in cases of cross-border work, many countries have entered into bilateral or multilateral treaties. Such treaties establish rules and procedures to determine the jurisdiction of social security and coordinate the social security systems of contracting States.
For instance, an international treaty may establish that a worker who is temporarily assigned abroad remains subject to the legislation of the country of origin. At the same time, the treaty may provide derogations or exceptions for specific cases, such as self-employment or temporary work.
Italy has signed various bilateral conventions on social security with extra-EU States. However, to date, the countries that have signed agreements with Italy on social security are still a small percentage.
Conclusion
The role of social security in labour law is crucial, especially in the case of international work contracts. However, its application may be complex, due to the different national legislations and international agreements. It is essential that employers and workers understand the rules and procedures applicable to their specific case. If needed, they should seek legal or tax advice to ensure compliance with the current regulations and maximise the benefits for workers.
Studio A&P supports companies in managing all the requirements on social security and labour law related to cross-border remote work.
Find out more about our services for cross-border remote working.