A crew member’s nationality, flag state of the yacht they’re aboard, and that yacht’s cruising schedule can all impact on social security requirements. Tim Schommer, Partner at Clyde & Co Europe LLP, tells us how.
Each yacht owner who relies on the support of a crew is usually confronted with the fundamental obligations of an employer vis-à-vis their crew members.
Although most yacht owners outsource all issues surrounding their crew to yacht management and service providers, it is still important for owners to understand the basic principles as well as their own obligations with regard to this topic. As a crew member, you should always make sure that you understand which social security system applies to you and whether there is any additional protection, for instance through additional insurances, which might be required or prudent in your particular situation.
Social security systems traditionally provide support to individuals, for instance in cases of loss of income, sickness or disability, retirement or childcare. Naturally, any mandatory rights and regulations also apply to crew members working on a Yacht.
Which factors are relevant with regard to the applicable social security regulations on a yacht?
Several factors are important with regard to the applicable social security regulations when it comes to a crew member. The first one being the flag. The flag of a yacht in principle determines the applicable law on that yacht. Hence, any mandatory social security regulations that are applicable in the flag state, are, as a matter of principle, applicable to each crew member. For instance, with regard to crew members from EU/EEA (European Economic Area) states or Switzerland, only one social security system of these states is applicable – hence they do not necessarily need to be registered separately in the flag state, if the flag state is a EU/EEA/Switzerland state. What also has to be taken into account with regard to the social security system applicable to a crew member is the crew member’s nationality and/or place of residency.
Depending on whether crew members are from EU/EEA states/Switzerland or from other countries, applicable social security systems – as well as the corresponding obligations that are placed upon the employer as well as the crew member – may vary.
The Maltese Social Security System
As one of the main flag authorities in the world, Malta puts an emphasis not only on the protection of crew members on yachts flying the Maltese flag, but also on the accessibility of its social security system for seafarers and crew members.
Malta, as any other EU member state, is subject to EU regulation 883/2004. Crew members are subject to the Maltese social security system, if they are working on a vessel registered in Malta. Again, there are exceptions. One such exception applies to EU/EEA/Switzerland residents, if employer and employee, in this case a crew member, both reside in the same EU/EEA/Switzerland state and are subject to the same social security regulations. Also, crew members who are not citizens or residents of EU/EEA/Switzerland, usually can opt for the social security system of their country of residence.
The contributions that have to be made to the Maltese social security system are shared between the employer and the crew member. The amount is calculated, up to a certain threshold, based upon a percentage of the weekly salary of a crew member.
Crew members that are insured in Malta receive a European Health Insurance Card and benefit from the so-called portability of rights with regard to their pensions, if contributions are paid into different social security systems within the EU/EEA or Switzerland. Consequently, if that crew member transfers to a different social security system, they do not lose the benefits acquired by contributing to the social security system.
Particularities of certain countries
In addition to these general rules, there are some particularities. By way of example, crew members working on yachts registered in France might be considered to be residing in France, if the yacht is in French waters for a minimum of six months (assessed on a rolling 12-month period and potentially made up of non-continuous stays). Whether the six-month period is concluded or not is to be evaluated in accordance with different criteria. If it is, every crew member must be registered with the French social security system. This does not apply to EU/EEA/Switzerland crew members who are residents and who make contributions to the social security systems of other countries that have a bilateral social security treaty with France.
Summary
Yacht owners should have a basic understanding of the social security regulations applicable to their crew members – some form of social security contribution is, generally speaking, mandatory. Likewise, crew member should understand their rights. Most crew make contributions to different social security systems during their career. Hence, they need to make sure that they have and keep the necessary documentation in order to benefit from the contributions paid even if several authorities in different countries are competent.
