RECENT CHANGES TO FRENCH SOCIAL SECURITY LEGISLATION HAS CAUSED MUCH ADO AMONGST THE LUXURY YACHT SECTOR, PARTICULARLY WHERE YACHTS ARE BASED MAINLY IN FRENCH WATERS
In reality the French authorities were attempting to ensure that the requirements of EU legislation and their obligations as a signatory (Member State) of the Maritime Labour Convention 2006 were being met. However, as a consequence of the manner of the change, i.e. minimal, if any, consultation with industry expertise, the initial legislation if applied as documented will have a catastrophic effect on the French luxury yacht sector. So why do I start an article about outsourcing payroll with my view of the French social security position? Quite simply because paying people is a complex issue when it is done correctly and not just making gross payments. One thing that the French authorities have succeeded in doing is igniting the debate about the payment of social security. A debate that I won’t necessarily go in to today but one that needs to be had.
The luxury yacht sector has existed for many years in splendid isolation from the majority of commercial shipping sectors and it took the introduction of MLC2006 to change this position, especially as yachts grow ever larger in size and demand more crew. MLC2006 was introduced for the protection of seafarers and the main thrust of this included the health and welfare of crew whilst they are onboard and also when leaving the industry through retirement or illness/injury etc. The legislation basically requires Member States to provide a social security system at least comparable to that available to shore based workers.
This is where the outsourced payroll provider is of great significance to the marine industry. In order to ensure that crew onboard a vessel are paid correctly in accordance with their SEA but also in accordance with any Flag State requirement, these figures need to be calculated correctly and any payments, including statutory payments, made in a timely manner into the correct bank account(s) in the correct currency.
One must remember that every crew member is unique when it comes to their personal tax and social security position and the mechanisms for recording and dealing with this are often complex and often involve more than one jurisdiction being taken into account. For example at CESG Limited, we transact payments to over 5000 individuals each month in nine currencies paid into bank accounts in over 89 countries and make payments to tax, social security, pensions, savings plans, trades unions, medical plans etc. in addition to salaries , allotments and various other payments. It is quite complex but when you know what you are doing it appears to be straightforward to the outside world.
A good crew member will always make their job look easy however, as we all know, keeping the lights on, getting from A to B safely and on time, serving up the perfect dinner in perfect surroundings does not happen without a competence long earned over time. A competence that is continually developed and honed to perfection. A good outsourced payroll provider is no different and just as legislation at sea changes so too does legislation ashore and has to be continually monitored as part of the service.
We have a simple objective each and every month to make sure that every employee is paid what they are due when they are due it, as simple as getting from A to B…… when you know how.
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