| Movement of Labour |
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| A key provision within the EU is freedom of movement of workers. For example, a French national can just as easily work in any of the current EU member countries as he can in France . Similar treatment will be applicable to the workers from new member states and from the accession countries that will move freely without the need for work permits . |
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| Current EU legislation gives each current member state the right to delay free movement of workers from the accession countries. Thus, different rules apply for new member states, except for Cyprus and Malta . |
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| In the opposite direction, workers moving from the current member states to the new states will no longer need to obtain visas and work permits. Such provisions have already been implemented in domestic law of these countries and/or will come into force depending on the accession process. |
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| The challenge for employers will therefore be to find the right balance in their pan-European workforces. Freedom of movement will give employers a wider pool from which to address any skill shortages, with significantly easier administrative procedures. At the same time, employers will need to ensure that key personnel in the accession countries do not leave for the greater rewards on otter in the current member states. Similarly, employers must ensure that workers from other states do not create unease in the workforce already present. |
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| In time, no doubt, these problems will resolve themselves as the level of reward equalizes across Europe . In the short -term, employers should give the matter careful consideration, as it may significantly influence their costs from the workforce perspective. |
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| Social Security |
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| From the experience of the other member states, EU accession should not create any major changes to domestic social security legislation. Its impact will be felt in the area of international assignments. EU legislation in this area encourages freedom of movement by directing that employees seconded within the EU (those who continue to be employed in their home country while sent to work in another) are to remain within their home country's social security scheme, typically for a maximum of five years. |
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| Although the advantages of continuing benefit entitlement and the non-fragmentation of state pension benefits between different states are clear, there could be an unexpected cost, particularly for assignees to accession countries. Currently, it is usually possible to avoid both home and host country social security for secondees to non-member states in Europe through some relatively straightforward planning. However, EU legislation makes it virtually impossible to avoid a charge somewhere. With social security rates within the EU as high as 30%, it will be necessary to budget for the additional costs and to consider planning in order to manage this issue adequately. |
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| The number of assignments of Romanian employees to EU countries has increased as these individuals have developed their performance and professional skills. Under the EU accession, these assignments from Romania to EU member states could become less expensive from a social security cost point of view. Compliance regulations in terms of documentation, applications would need to be observed. |
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| How we can help you? |
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| Our Human Resources Services group offers comprehensive advisory ser vices in response to the need to prepare companies operating in accession countries for the changes relating to EU integration. These services cover interpretation of the EU rules relating to the movement of labor, taxation and social security. They show you how these rules will affect your company and advise your company on the HR aspects of any restructuring or relocati on of your workforce. |
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| In addition, we hold workshops for companies regarding these issues. Our HRS experts from PricewaterhouseCoopers offices in the EU member stales and acceding countries prepare the workshops. |
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| For further information please contact one of our experts in the enclosed listing or your usual PricewaterhouseCoopers representative. |
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