Oceanskies Crew Limited, the Guernsey based yacht crew employment and payroll division of Oceanskies, is receiving many enquiries regarding the current situation concerning the payment of social security contributions by yacht crew as the Mediterranean yachting industry gears up for the 2018 season.
We have therefore prepared this pre-season update to advise of the current situation as we understand matters.
The implementation of the Social Security Financing Act for 2015 in France in respect of social security obligations has reinforced the need for yacht crew and their employers to ensure that they are making the appropriate contributions when and where they fall due.
The French Social Security Financing Act for 2015 needs to be considered in conjunction with European Regulation (EC) No 883/2004 of The European Parliament And of The Council which, since 2004, has determined obligations for seafarers working onboard yachts flagged in Europe as well as the Maritime Labour Convention of 2006 which, at an international level, has also afforded protection for seafarers working onboard commercially registered yachts.
EU Regulation 883/2004
EU Regulation 883/2004 requires the registration of seafarers legally residing in the EU either with the flag state of the yacht on which the seafarer is engaged or with another EU state which can then provide an Article 16 agreement (under the provisions of the EU Regulation 883/2004) for exemption from being registered with the yacht’s flag state.
For example, a UK domiciled seafarer working onboard a Malta flagged yacht could make UK National Insurance contributions and request an Article 16 Agreement from the UK to be exempt from registration for social security in Malta.
However, in general, we would expect seafarers legally resident in Europe working onboard a EU flagged yacht to be registered to the social security regime of the flag state. In some cases EU non-resident nationals can also be registered.
Maritime Labour Convention 2006
The Maritime Labour Convention 2006 applies to all ships, including yachts, ordinarily engaged in commercial activities and is viewed as best practice for the employment of crew onboard all yachts where possible. Under the MLC a seafarer has the right to receive social security protection.
The Social Security Financing Act for 2015
The implementation of the Social Security Financing Act for 2015 in France has greatly complicated matters and recognises that most crew based in the Mediterranean are working onboard non-EU flagged yachts, and, as such, have no social security cover.
To combat this perceived problem the Social Security Financing Act for 2015 requires the following for employers whose seafarers are deemed resident in France (resident, for the purposes of the act being defined as spending, cumulatively, more than six-month period in a twelve month period in the territory of France (i.e. French mainland, French waters or French overseas territories):
- Register seafarers and declare their services with ENIM (the French social security office responsible for seafarers); or
- Provide evidence of registration with another state and/or private welfare scheme allowing a coverage at least equivalent to the one prescribed by Article L. 111-1 and article L. 111-2-1 II of the French social security code.
A step-by-step approach can be taken to assess compliance as follows:
1 is the seafarer affected by the decree?
If the seafarer spends, cumulatively, more than six-months in a twelve month period in the territory of France (i.e. French mainland, French waters or French overseas territories) then the seafaer will become French resident for the purposes of the act.
Note – There is the potential for crew working onboard yachts entered into France on a temporary basis for refit and repair purposes to be exempted.
2 if the seafarer is affected what is the solution?
The first step should always be the flag state, as such if the yacht is EU flagged then the crew should register with flag state.
If the yacht is non-EU flagged the options are ENIM, or a private welfare scheme allowing coverage at least equivalent to the one prescribed by Article L. 111-1 and article L. 111-2-1 II of the French social security code.
Below is a very simple summary of the various scenarios:
|Seafarer||Flag||Time in France||Solutions|
|EU||EU||+ 6 Months||Flag State or Home State|
|EU||EU||– 6 Months||Flag State or Home State|
|EU||Non EU||+ 6 Months||Private Scheme|
|EU (not French)||Non EU||– 6 Months||Not Applicable|
|Non EU||EU||+ 6 Months||Private Scheme|
|Non EU||EU||– 6 Months||Not Applicable|
|Non EU||Non EU||+ 6 Months||Private Scheme|
|Non EU||Non EU||– 6 Months||Not Applicable|
How Oceanskies Crew can assist
Oceanskies Crew is able to efficiently employ and pay crew working onboard any yacht of any size whether operated privately or commercially.
Pricing is really straight forward at EUR 260.00 take on per crew member, (including contract), then EUR 65.00 per month per crew member plus EUR 15.00 bank charges.
The system works by the yacht owner outsourcing the employment of their crew to Oceanskies Crew either on a stand alone basis or as part of a third party management structure. OCL takes care of the crew’s employment and payroll on behalf of the yacht owner or yacht manager in an administratively efficient manner from our home island of Guernsey.
Oceanskies Crew currently employs crew onboard yachts ranging in size from small single Captain vessels to the largest superyachts and can assist yacht owners, yacht mangers and yacht crew in the following areas in respect of social security:
- In France, assist with ENIM registration and payments.
- In Malta, arrange social security registration of employer and seafarers including deduction of social security at source and obtaining of A1 and S1 certificates as well as a European Health Insurance Card.
- In the UK, assist with the registration of UK domiciled seafarers for National Insurance contributions.
- Assist with social security registration and payments in other EU and suitably qualifying foreign jurisdictions.
- Facilitate equivalent private welfare scheme in conjunction with third party insurance partners (our recommended course of action for all yacht crew regardless of whether the French rules apply).
Effect offshore ‘gross’ payroll for applicable seafarers.
- Effect social security registration of employer and seafarers for yachts in build, for example in Holland where seafarers engaged during the build phase can become liable to local taxation.
For further information, please do not hesitate to contact Tom Becker here at Oceanskies who is also a fluent French speaker.