Spain: These are the social security rules applicable to workers relocated abroad

Spain - 07 / 24 / 2023

A new piece of legislation defines in detail the cases in which relocated workers will be treated as having registered status for social security purposes, such as in the absence of a bilateral agreement, where such an agreement does not apply to the specific case concerned, or the maximum period for keeping up contributions in the worker’s country of origin has ended.

Order ISM/835/2023 of July 20, 2023 on the treatment as having registered status in the social security system for workers relocated abroad and employed by companies operating in Spain was published in the Official State Gazette on July 22, 2023. This order determines the scope and conditions for treatment as having registered status in the social security system.

The order defines relocated individuals as workers employed in Spain by a company carrying on its operations in Spain and sent by this company to another country to perform salaried work for that company.

In article 3 it defines the cases in which workers may be treated as having registered status:

1. The relocation of workers to a country in which no international instrument is applicable on the coordination of social security systems (article 3.a) or in which, although such an international instrument is applicable, those workers do not fall within its personal scope (article 3.b).

They will be treated as having registered status in the social security regime in which they are classified, and the obligation for contributions to be made by both the employer and the relocated workers will exist for as long as those workers stay in the host country and their employment relationships with the employer remain in effect.

The employer will have to notify the Spanish Social Security General Treasury of the relocation of workers before it commences.

The social security protection in these cases includes subsidies for temporary incapacity as a result of occupational or nonoccupational contingencies, birth and caring for a minor, shared responsibility for infant care, risk during pregnancy, risk while breastfeeding and caring for minors with cancer or another serious illness, in addition to the contributory pensions for permanent incapacity and death and survivors as a result of nonoccupational or occupational contingencies and the contributory retirement pension, with the extent and scope envisaged in the legislation applicable to the social security regime in which they are classified.

2. The relocation of workers to a country in which an international instrument on coordination of social security systems is applicable which provides for application of the social security legislation of the country of origin during that relocation period, after the maximum period provided for the relocation has been used up, including any extensions that have been authorized, if they are envisaged in the international instrument concerned (article 3.c) or where the international instrument on coordination of social security systems does not provide for the relocation of workers by their employers to the country of the other party (article 3.d).

Workers relocated abroad by their employers to work for them may voluntarily continue to be subject to the Spanish legislation after the maximum relocation period provided for in the international instrument concerned has ended, including any extensions that have been authorized if they were covered in that instrument.

The employer, following an agreement with those workers, may apply to the Social Security General Treasury for those workers to remain subject to the Spanish social security legislation, and be treated as having registered status in the social security regime in which they are classified, with the following effects:

If the application is filed before the date on which the relocation periods mentioned above end and until the last day of the month following the month in which that date falls, the workers’ treatment as having registered status will start on the day following the date on which that relocation period ends.
If the application is filed outside the period mentioned above, the treatment as having registered status will start on the filing date of the application.

Workers and employers will have to formalize, jointly and in writing on an official form, an agreement to apply the Spanish social security legislation, separately from the mandatory application, in addition, of any social security legislation of the country to which they have been relocated which is required to be applied. Employers will be required, in all cases, to provide the Social Security General Treasury with that agreement together with the application, on an official form.

The social security protection in this case will include the contributory pensions for permanent incapacity and death and survivors as a result of nonoccupational contingencies and the contributory retirement pension, with the extent and scope in the legislation applicable to the social security regime in which they are classified.

The treatment as having registered status described above may only be retained during a relocation period that originated from a contract formalized in Spain, including where the worker changes to another host country, provided that, in this latter case, the conditions required in articles 3.a, 3.b or 3.d of the order are fulfilled.

Any new contract that is formalized outside Spain will entail termination of the worker’s treatment as having registered status. A new contract will not, however, be considered to include the signature of any contracts signed in the host country solely for the purpose of fulfilling the requirements of the local legislation, provided that the contract with the employer in the country of origin remains in force at the same time, the employment relationship with that employer prevails at all times over the relationship with the local company and the conditions in article 3 continue to be fulfilled.

The new legislation also determines the information that has to be notified by employers to the Social Security General Treasury.

This order comes into force on the first day of the fourth month following the month of its publication in the Official State Gazette and contains a transitional regime:

Employers with workers who are in the case defined in article 3.b must notify that relocation to the Social Security General Treasury, within six months running from its entry into force.
Employers with workers relocated abroad who, on the date of the order’s entry into force, are in any of the cases defined in articles 3.c and 3.d may, following an agreement with the affected individuals, apply to the Spanish social security authorities for voluntary treatment as having registered status.
The order will not give rise to any right for a period preceding the date it becomes applicable.