Eurocommerce: Simplified Social Security Rules Are Vital for Cross-Border Business

European businesses operating across borders continue to face numerous bureaucratic hurdles, hindering both labour mobility and service provision, according to a statement issued by Eurocommerce.

This situation undermines Europe’s competitiveness. A modernised and simplified Regulation 883/2004 could help reduce the administrative burden on businesses, enhance worker mobility, and support the European Commission’s goal of cutting red tape.

Despite 12 EU Council presidencies, 18 trilogue meetings, and two provisional agreements, interinstitutional negotiations on the coordination of social security systems remain unresolved. While compromises have already been reached on 80% of the regulation, it is now time to conclude the process with a revised and streamlined version.

The alternative — withdrawing the proposal — would set Europe back by years, depriving European employers of the much-needed clarity on this vital issue.

Since the European Commission’s initial proposal in 2016, labour mobility has become significantly more complex. The telework boom following the COVID-19 pandemic and the rise of mobile self-employed workers are just a few examples.

Businesses need legal certainty to navigate these new mobility patterns and respond to evolving labour market conditions. The work of the European Labour Authority (ELA) and the 2023 Framework Agreement on Cross-Border Telework only partially address these complex scenarios.

A key issue where employers demand a clearer and simpler approach in the revised Regulation 883/2004 is prior notification. In particular, stakeholders must agree on an exemption from prior notification requirements for business trips and short-term postings (up to three days), excluding the construction sector.

At the same time, there is a need for a more digitalised approach to prior notification when it is required, especially for postings.

For instance, European employers would support a system where a notification request is acknowledged through an automatic confirmation of receipt, issued without delay, and considered as valid proof of notification, should such evidence be needed during a posting.

In this context, the development and implementation of digital tools can further facilitate labour mobility, reduce bureaucracy, and help combat undeclared work.

Digitalisation holds great potential to further streamline and accelerate social security coordination within the EU. Two initiatives are particularly noteworthy:

• The European Social Security Pass (ESSPASS) offers significant potential to reduce the administrative burden for businesses operating in a cross-border context. By consolidating key data in a single digital tool, the A1 form becomes obsolete. It is essential that the conclusion of the pilot phase is swiftly followed by a strategy for large-scale deployment of ESSPASS.
• A fully implemented Electronic Exchange of Social Security Information (EESSI) will facilitate cross-border exchange of data and information concerning social security coordination. Standardised data formats and binding deadlines are necessary to quickly integrate various branches of social security and cut red tape.

ELA can play a key role in raising awareness and supporting the implementation of both tools.