Commission delays digital social security

Europe is no closer to resolving the exploitation of cross-border workers following the communication on digitalisation in social security presented today by the European Commission.

The lack of interconnected social security systems within the European Union creates a loophole which allows companies to cut costs by avoiding the payment of social security contributions for their workers.

In its 2021 Action Plan on the Social Pillar, the European Commission committed to: “Start a pilot in 2021 to explore by 2023 launching a digital solution to facilitate the interaction between mobile citizens and national authorities.”

Today the Commission pushed back the end date for the pilot project to 2025 and still have not announced whether that will lead to any legislation.

That will leave workers, trade unions and authorities without the concrete tools they need to effectively enjoy and enforce social security rights across the whole EU.

Social security fraud cases raised by trade unions with the European Labour Authority:

  • Several seafarers residing in Belgium and employed under the Cyprus or Madeira flagged vessels have been refused access to the social security scheme of the Flag state. This will have a negative impact on their right to social assistance such as unemployment benefits in future.
  • Non-payment or under-payment of social security contributions for workers from Italy, Romania, Albania, Kosovo and Egypt employed by an Italian subcontractor to construct the Rive Gauche shopping centre in Charleroi.
  • A group of 31 construction workers from Bosnia and Croatia were posted by a Slovenian company to Austria. The company did not comply with Slovenian law for registering the posted workers. This may have a serious impact on their social security and pension contributions when they return.

ETUC Deputy General Secretary Isabelle Schömann said:

“Effective social security coordination is a prerequisite for freedom of movement to function properly, ensuring fair mobility for workers.

“The current lack of digital tools for cross-border enforcement means companies are getting away with avoiding their obligations to pay social security contributions with serious consequences for mobile workers when they fall ill, become unemployed or retire.

“The Commission has already spent two years ‘exploring’ this scandal and now they’ve kicked the issue into the long grass for the next Commission to deal with.

“The failure to come forward with any concrete proposals to close the loopholes will continue to allow the exploitation of the most vulnerable workers.

“Experience shows that digital solutions for fair mobility are within reach, but it requires that the Commission as well as the Member States play their part, in terms of ensuring that the necessary resources and infrastructure is available.

“With the right political will it is possible to act swiftly. In 2021, within less than six months it was possible to develop and deploy the EU Digital COVID Certificate across the whole continent. That stands in stark contrast to the Commission’s lack of action on digital social security over the same period.”