Newsletter: July 30, 2024

Welcome to the latest edition of our newsletter! Our goal is to ensure that you are well informed and equipped with the latest information.

Read on to stay ahead, stay compliant, and set the course for success.

Belgium Introduces a Duty to Actively Monitor the Right to Work for Subcontractors

While EU nationals don’t need a work permit to be employed in Belgium, third-country nationals require a professional card. Although there are some exceptions in both cases, infringement can lead to severe sanctions on employers and self-employed people. More often than not, infringements are committed by the last company in a subcontractor chain rather than the main employer.

However, under Article 12/4 of the Act of April 1999, regarding the employment of foreign workers, the principal company could be held liable for infringements of the law on subcontractors’ right to work. The law followed a three-step method to determining infringement.

1. The principal could be held liable if a direct contractor hired by them infringes the law. This legislation does not relate to subcontractors of the direct contractor.
2. The liability for infringement by a direct contractor will not apply if the principal has a written agreement with the direct contractor that people will not be employed without following the rules for the right to work in Belgium. This essentially means including a clause in the agreement that the contractor will comply with the law.
3. The principal could be held liable for an infringement by a direct contractor if the principal was aware of the said infringement.

However, a decree passed on October 27, 2023, has amended the second step of the process. Although this decree is yet to be enforced, the Official Journal of June 4, 2024, included a decree, dated April 26, 2024, which included essential implementation measures and stated that the October 2023 decree would come into force on January 1, 2025.

The decree converts the second step of the three-step approach into a duty, wherein the principal needs to actively verify and monitor compliance with the right-to-work law by its direct subcontractors. To avoid liability for infringements by a direct contractor, the principal requires a written statement from the direct contractor confirming compliance with the legislation. In addition, the principal needs to show “appropriate diligence” to prevent infringements by the direct subcontractor.

For foreign companies working temporarily in Belgium, the documents required include:

• Proof of the right of residence in the home country.
• The Limosa declaration, which provides information about the employer and the worker.
• Evidence of the home country’s social security regime remaining applicable during the period of work in Belgium.

Luxembourg – New Rules for Highly Qualified Third-Country Workers

Luxembourg has passed a new law that eases work and residence conditions for highly qualified third-country workers. The new legislation simplifies the application process for the EU Blue Card, making it more attractive to skilled foreign workers. The aim is to fill the skill shortages in Luxembourg’s labour market.

The new law, published in the Luxembourg Official Journal Mémorial A 261 on June 27, 2024, implements Directive (EU) 2021/1883, which establishes the criteria for entry and residence of third-country nationals in Luxembourg for the purposes of “highly qualified” employment.

The simplified and improved work and residence conditions under the law ensure easier movement across the EU through the following changes:

• Long-term mobility: Workers holding EU Blue Cards can now travel from one member state to another for highly qualified employment following 12 months of legal residence (compared to the earlier 18 months) in the member state that issued the Blue Card. They can begin working in the new member state immediately upon completing the application process rather than waiting for immigration to be granted. If the application is rejected, the worker can return and work in the EU Blue Card issuing member state.
• Short-term mobility: EU Blue Card holders can now reside in another member state for up to 90 days during any 180-day period for the purposes of conducting business activities. Such activities can include business trips, attending seminars and conferences, contract negotiations, marketing and sales activities, and training.
• Changes to conditions for obtaining a Blue Card: Changes have been made to the duration of the employment contract, skills required to be considered a highly qualified worker and minimum remuneration.
• Thresholds lowered: The period of employment before which the third-country worker can change employers and access to equal treatment with Luxembourg nationals related to highly qualified employment has been lowered from the earlier 24 months to 12 months.
• Duration of residence permit: This duration has been raised to 4 years from the earlier 2 years.

Other changes include:

• Extension of permitted periods of unemployment
• Facilitating family reunification
• Consolidation of rights related to self-employment and training and recognition of qualifications

The law came into force on July 1, 2024.

Germany – Chancenkarte or “Opportunity Card” for Non-EU Nationals

Germany has implemented a new work visa, known as the Chancenkarte or Opportunity Card, with effect from June 1, 2024. This new visa gives non-EU nationals the opportunity to work and reside in Germany based on specific criteria and a points-based system for granting a work visa. The Opportunity Card eases and speeds up the process of obtaining a work visa for Germany, especially for skilled and experienced third-country nationals.

The Chancenkarte is designed to attract talent from around the world, allowing non-EU citizens to enter Germany without needing a prearranged job offer. With the Opportunity Card, the individual can live in Germany for up to one year while searching for employment.

The card is awarded based on a points-based system that evaluates the applicant’s qualifications, work experience, language skills, age and several other factors. The new work visa offers flexibility while recognising foreign qualifications and allowing part-time work and residency while looking for full-time work.

The Opportunity Card addresses the country’s growing labour shortage by making it easier for professionals from the fields of education, medicine, engineering, manufacturing and others, to work in Germany. Applicants will require an academic degree or professional qualification recognised in Germany. Some of the other key requirements include:

• Qualifications: A university degree or vocational training (of a minimum of 2 years).
• Language Proficiency: Basic knowledge of German (A1 level or above) or English (B2 level or above).
• Financial security: Evidence of the ability to support oneself financially during their stay in Germany, along with a valid health insurance policy.
• Score: A minimum of 6 points are required to qualify for the Opportunity Card. The points system assesses the applicant’s qualifications, work experience, language skills, age, previous stays in the country and potential job offers.

There are no advantages of scoring much beyond 6 points. The minimum requirements make the individual eligible to apply for the Chancenkarte.

Reform of the German Nationality Act Part 2: Admission of Dual and Multiple Citizenship

With effect from June 27, 2024, the Act on the Modernization of Citizenship Law, permitting multiple citizenship, has been implemented in Germany. Prior to this reform, Germany did not allow citizens to acquire the citizenship of another country without renouncing their German citizenship. Similarly, citizens of another country wanting to obtain German citizenship had to renounce their existing citizenship to become German citizens.

The new law has brought about several changes to the German citizenship law, such as:

• Multiple citizenships: German citizens can now hold citizenships of one or more nations, although there are some exceptions under rare circumstances.
• Shorter naturalisation periods: The minimum duration of German residence required for naturalization has been reduced from 8 years to 5 years. In addition, in special cases where the individual is perceived as “exceptionally well-integrated,” the minimum period could be as little as 3 years.
• Easier naturalisation for children: Children of foreign nationals born in Germany will now be granted German citizenship by birth if at least one parent has been residing in Germany for a minimum of 5 years and holds permanent residency. Previously, the minimum duration of residency for the parent was 8 years.

The Modernisation of Citizenship Law is expected to make German citizenship more attractive, increasing its uptake. It might make Germany more attractive as a labour market for foreign talent, since access to a German passport will become easier. The uptake of German citizenship is currently below the EU average despite Germany being one of the strongest economies in the bloc.

Ireland: New Employment Permit Type, Labour Market Testing Improvements and Change of Employer Rules Forthcoming

The Employment Permits Act 2024 was signed into law on June 25, 2024, bringing about changes to Ireland’s employment permit system. The new law aims to consolidate the rules on employment permits for seasonal workers, modernising the system by streamlining the country’s labour market testing processes, amending the “change of employer” guidelines and introducing new notification requirements.

While the law will make it easier to attract talent to Ireland, it could also create administrative challenges for employers, given the increased focus on compliance by the Irish government. The timeline for the implementation of the new law is yet to be disclosed.

The changes include:

• Seasonal employment permit: A work permit for foreign seasonal workers was unavailable in Ireland till now. The new permit applies to “seasonally recurrent” work for a specified period during the year, lasting between 3 and 7 months. The permit could be refused if the employer fails to arrange adequate health insurance or accommodation for the seasonal employee. Currently, employers need to resort to alternative immigration pathways for seasonal workers, which are usually more challenging administratively and more expensive.

• Labour market testing processing: Labour market testing will no longer be required via newspapers. Instead, advertisements for job openings can only be placed on approved online platforms. This is likely to make the labour market testing processes more efficient and cost-effective for employers.

• Change of employer: Holders of General Employment or Critical Skills Employment Permits will now be able to apply to amend their employer, given that their permit is valid for at least two more months. Currently, permit holders need to apply for a new employment permit. In addition, Seasonal Employment Permit holders can amend their employer if their permit is valid for at least three more weeks. Also, employees will no longer be allowed to apply for another employment permit till they complete 12 months under the first permit.

The Employment Permits Act 2024 also allows the Minister of Justice to amend rules to better respond to changes in the labour market, without needing to implement further legislation. This will help Ireland respond quickly to changes in in-demand roles and other labour market factors.

Sweden: The Government Proposes Changes to Rules for Pension Payments

On June 18, 2024, the Swedish government signed a proposal for changes to the rules for the payment of occupational pensions from pension savings accounts and pension insurance. These changes were originally proposed by a multi-party working group comprising representatives of the eight parliamentary parties, Pensionsgruppen, in October 2023. The aim was to make withdrawals from occupational pensions more flexible.

The amended rules will allow pensioners to pause pension payments or extend the payment period within the first five years after the pension has begun. “Sweden’s pensioners should be able to choose how they want to set up their pension. The government is now enabling a more flexible withdrawal of the occupational pension,” said Swedish Finance Minister Elisabeth Svantesson.

The proposal changes the existing “five-year rule,” under which pension insurance and pension savings account payments cannot be made for a period of less than 5 years. Plus, each payment must consist of the same amount or increasing amounts, which means that pension payments cannot be interrupted for the first 5 years after the payments have begun.

With the new rule, pensioners can pause their pension payments and resume gainful employment. The new rules make it more advantageous and easier for pensioners to restart working without taking a financial hit of higher taxes due to their occupational pension.

The bill also proposes greater flexibility for survivor’s pension payments, based on the recommendations put forth by the Swedish Pensions Agency (Pensionsmyndigheten) and the National Pensioners’ Community Association (Riksförbundet PensionärsGemenskap).

The proposed amendments to the pension payment rules are set to come into force on January 2, 2025.