The Impact of Remote Work in Europe by 2030
The EU structure has been designed as an integration project to ensure democracy and human rights protection.
Through the 19th and 20th century, progress in the political system led democracy and long-lasting social systems becoming core values of the European actions.
Although there are still scenarios of dictatorships, communism, poverty, and human rights breaches, higher living standards made the lives of Europeans more liveable.
Many European region countries share various benefits, including ‘Freedom of movements’, enabling citizens with greater opportunities and choice. This specific aspect has a key role when referring to remote working.
Although European citizens can reach almost every corner of the continent simply by carrying their identity card, some barriers could limit this freedom.
As the majority of the current social and political systems are administered at a national level, what happens to the social benefits of pan-European remote workers? Let’s go deeper into these social issues.
Workers’ Social Benefits
A national approach still affects many areas regarding workers’ social benefits, such as pensions, taxes and health insurance. Even if we live in a greater integrated area compared to other regions of the world, governmental systems remain designed with place-based work in mind.
A shift to greater reliance on remote work, likely accelerated by the global pandemic experience, will force European countries and companies to rethink strategies on these topics. Remote work progress will need a new level of integration.
Multinational companies have fewer problems with those issues, as they usually own multiple registered offices spread across different countries. Therefore, workers can relocate easily as long as the corporation has an office there. However, the problem comes with smaller companies and when the remote worker wants to move in a country without a place-based branch. It impacts both companies and remote workers.
- Opening new branches is costly and time spending, as it requires a charged registration.
- Responsibility on accessing health insurance, paying taxes and contributions weight only on the employee.
The European Union, to save its role as “guarantor” of workers’ rights, should increase and harmonise remote work policies and benefits. Over the next decade, we will see a growth in the number of companies with remote teams, which means the necessity of new regulations and a more integrated legislation system.
While it is hard to accomplish globally, Europe has a unique position for this. Throughout some target enhancements in its governance system, Europe could lead this change, and enable a more decentralised, but equally fair, working environment. All of those developments will improve opportunities both for workers and companies, with quite a few possibilities to strengthen the economy of the European region.
- Digitize Public Administration
To avoid the fragmentation of public administrations in the EU, a digital and integrated administration system at the governmental level is necessary. The first step is to manage taxation and payroll digitally, and prevent issues in paying taxes and loss of workers’ protections or double taxation. Better remote working conditions will then make cash flows more efficient and secure for both businesses and individuals.
- Widen Health Insurance Plans
Although the EU already implemented a European Health Insurance Card, it covers only emergency health services and it is time-limited. Moreover, international remote workers still have to pay higher premiums to cover their own health insurance. We should expand partnerships between providers in the various European countries to allow both individuals and companies to contribute from their resident countries for full healthcare access.
- Providing Flexible Pension Schemes
Pension plans have been a growing crisis for decades. This is due to the often minimum contribution periods in some countries. Therefore, if someone split their career over multiple European countries, they could in turn end up missing out with the current national pension systems. Providing the option to choose from either a national or pan-European pension plan would help to mitigate some of the issues that international and remote workers face. European financial institutions also need to evolve to offer more and better pension funds across Europe, enabling people to plan for their retirement more efficiently.
Remote Workers’ Rights
Europe is known for strong workers’ rights. They vary from country-to-country, but basically, they protect employees from being fired instantaneously or without cause. These rules limit discriminations and ensure support to the employee after being fired.
However, when we refer to remote workers unless the company holds a branch in the country, the employee’s rights are more uncertain. For instance, if someone lived in Portugal, but worked remotely for a company in Spain, they often are not guaranteed the rights of either country. Although the European Parliament has passed minimal labour protections for gig economy employees, these protections are still far less than standard workers receive.
This pushes the harmonisation of workers’ rights as a prime concern that needs to be addressed with common standards. With the improved mobility, the continent also needs to ensure that protections move with these employees and that as technology enables more international workers in Europe, that they are not cut out of essential protections.
Political participation is the other side of the coin. These issues affect either people who moved abroad or in another region of the same country as well as workers of a company based elsewhere.
If a significant percentage of Europe’s workforce go remote, then voting might become a battle between residency and citizenship. Without citizenship, a lengthy process, voting rights are rarely granted, even if residency means that these elections will have the greatest impact on an individual. These issues cut the person out of the democratic process of the place they live.
Even if remote working will not completely remove voting barriers for nations, it might lower those barriers in Europe, giving citizens the possibility to vote for national elections of their residence country. However, home country elections could impact the employer living abroad alike. As 3% of Europeans living and working in a country they are not a citizen of, this is already an issue across our region. With an increasing number of remote workers, we will likely start to see countries rethinking their voting policies. Some EU members have already opened up voting rights, adding foreign nationals from EU member states rights.
2020 will be also remembered as the year of remote working. While some sectors have flourished, some others faced many challenges. The global pandemic stressed several issues related to remote worker’s rights and conditions, who are commonly disadvantaged compared with traditional workers.
With more harmonisation of social policies, Europe could lead this progress and make remote working a common policy in the region.