Those working in yacht jobs in France will have no doubt heard of the new social security law which applies to non-French yacht crew residing in France as of July 1st 2017.
Those following the situation closely will also be aware of the huge confusion surrounding the new social security law, with many of the details still to be clarified by the French authorities. Despite the uncertainty, the legislation is already active. It is therefore crucial that yacht crew based in France must keep informed of their social security obligations.
Weve compiled this easy to digest guide to help you better understand the situation.
Which yacht crew will have to pay social security in France?
[Please note: If, as of the 1st of July, 2017, you were already paying social security in another country and continue to do so, you will not have to pay social security in France. You cannot sign up to pay into social security elsewhere after 1st July. ]
You will have to pay social security in France if:
Your yacht is based in France for most of the year. Those seafarers with yachts jobs on board vessels that are based in France for 181 days or more of the year will be required to pay French social security (if not already paying in another country). The habitation period is counted from 1st January through to 31st December, not a rolling 365-day period.
2. You are considered a French resident for tax purposes. Those who are considered resident in France will have to pay into social security, including those seafarers who:
Spend more than 183 days per year in France (counted between 1st Jan and 31st Dec),
Have their principal residence in France,
Have their principle residence in France in which their family lives (even if they work abroad),
Have a business in France (even if it is not salaried),
Have the centre of their economic activities in France. This can be main investment income or the headquarters of a business.
Given the number of yacht crew who are based year-round in France or have principal homes and investments in the country, the social security changes stand to affect a high number of those with yacht crew jobs on vessels in France.
Why has the law been brought in? And what are the benefits to crew?
France has implemented the decree as part of its mandatory obligations under the Maritime Labour Convention (MLC) to bring seafarers of all kinds into the French social security net. The aim of the law is to give seafarers the same health benefits, benefit cover, and retirement plan as people who work on land.
This means that yacht crew who pay into the French social security system will qualify for:
Health cover under the French social security system (which is exceptionally good),
The full French pension from age 50 if the seafarer has completed 25 years of service,
A pro-rata pension, beginning at 55 years old, for those who have served more than 15 years but less than 25 years,
Retirement benefits to certain family members in the event of a seafarers death.
Is there any chance the law will be overturned or changed?
Some yachting industry groups are contesting the new law, hoping to overturn it. However, as a signatory of the MLC, France is legally required to enact this law, and will be considered in breach of international law if they do not. According to industry experts, this makes it very unlikely that the law will be overturned.
Having said that, ENIM, the maritime social security body in France, is consulting with the yachting industry and has announced that they are open to adapting the law to better-suit the yachting industry. Numerous yachting bodies are getting involved in negotiations on this matter, including the PYA, GEPY and ItalianYachtMasters.
While its details may change, the law has already been enacted as of 1st July.
Does it matter if the yacht is registered as private or commercial?
No. All seafarers on private and commercial vessels are considered employed, and therefore will be required to pay into social security if they are deemed to be French residents.
Won't this law just push owners to base yachts in Italy or Spain, instead of France?
Other countries that are signatories of the MLC, such as Italy and Spain, are also required to bring seafarers into their social security net. They will no doubt be watching closely to see how France navigates these tricky waters!
How do crew pay into French social security? Whats the process?
The percentages paid will be tiered, rising with rank and average pay within that rank. For example, a captain will pay a higher band of tax than a deckhand.
What is known is that the administration process will be managed by the yacht captain and/ or management company, not the crew themselves.
The yacht will have to provide crew details to ENIM, including the salary of all who reside in France for tax purposes or are on yachts based in France for more than 181 days of the year.
ENIM will calculate the monthly amount owed by each crewmember, and will multiply it by six to get a half-yearly figure. The employer will have to pay this amount in advance.
This process will happen every six months, adapted each time for crew who are joining or leaving the yacht. The yachts social security statements will need to be submitted monthly on the 25th.
How does this law impact jobseekers who are looking for yacht crew jobs right now?
To those candidates looking for yacht crew jobs on yachts based in France or who have homes, businesses or investments in France, you must know your tax status as it stands under this new law.
Do you require more information?
We hope this makes the issue clearer, even if not all details of the new law have yet been released. YPI CREW is on hand to provide more information to employers and crew alike. Alternatively, companies like Marine Accounts can oversee these sorts of issues.
Other good resources for this topic are provided by the PYA.
Please note: this article is intended as a guide and does not constitute legal or tax advice.