This strict application of the general “Pay-where-you-work” provision for employee-led requests means that facilitating temporary cross-border remote-working/implementing flexible working policies may be difficult for Irish employers. If the general rule is applied, then social security should be operated in the remote working location even though the employee may only be working there for a short period (subject to any domestic relief in the overseas location). The administration and costs associated with complying with the remote-working location’s social security system often means that facilitating such requests is hard for Irish employers, at a time when providing additional work-location flexibility is needed to attract and retain talent.
As an example, in the case of an Irish employee wishing to work in Spain for two months for personal reasons, based upon recent DEASP feedback, an A1 Certificate to retain the employee within the Irish social security system is not obtainable and so in strictness, Spanish Social Security should apply for the two-month period. To comply, the employer is required to register for Spanish social security, and operate/remit Spanish social security for two months. This would be time-consuming and costly for the employer.
We note that depending on the applicable social security rates, there may also be a direct social security cost to both employer and employee in these instances. In the example above, the additional employer social security cost is almost 20 percent – the Irish employer social security rate is 11.05 percent, whereas the Spanish equivalent is 29.90 percent. Furthermore, given the short duration, employees are unlikely to derive any benefit from these host-country social security contributions, and there may be corresponding gaps in the employee’s Irish social security record. These gaps could adversely impact the employee’s entitlement to certain state benefits.
The DEASP is of the view that provisions relating to commuters do not apply as short-term working overseas does not form part of the ordinary working pattern of the employment. They may consider relief under Article 16 (i.e., the exceptions article) in such instances, however, as this is reviewed on a case-by-case basis, approval will depend on the fact pattern.
