COMMISSION STAFF WORKING DOCUMENT IMPACT ASSESSMENT Accompanying the document Proposal for a Council recommendation on access to social protection for workers and the self-employed
Date: 2018-03-13
Institutions: Directorate-General for Employment, Social Affairs and Inclusion, European Commission
Subjects: EU Member State, European social policy, labour force, labour market, self-employed person, social security

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 13.3.2018 SWD(2018) 70 final  COMMISSION STAFF WORKING DOCUMENT  IMPACT ASSESSMENT  Accompanying the document Proposal for a Council recommendation on access to social protection for workers and the self-employed {COM(2018) 132 final}  - {SWD(2018) 71 final}   
 
 
Table of contents 

1. 

2. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT ......................................................................... 1 

PROBLEM DEFINITION .................................................................................................................. 2 

2.1. 

2.2. 

2.3. 

A FIRST LOOK AT HOW MANY PEOPLE ARE POTENTIALLY NOT COVERED BY SOCIAL SECURITY ............................... 3 

PROBLEM DRIVERS .............................................................................................................................. 6 

CONSEQUENCES ............................................................................................................................... 12 

3.  WHY SHOULD THE EU ACT? ......................................................................................................... 16 

3.1. 

3.2. 

3.3. 

LEGAL BASIS .................................................................................................................................... 16 

RESULTS OF THE SOCIAL PARTNERS CONSULTATIONS AND OF THE PUBLIC CONSULTATION ................................ 16 

SUBSIDIARITY: NECESSITY AND VALUE-ADDED OF EU ACTION .................................................................... 17 

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? ..................................................................................... 18 

4.1. 

4.2. 

GENERAL OBJECTIVES ........................................................................................................................ 18 

SPECIFIC OBJECTIVES ......................................................................................................................... 19 

5.  WHAT ARE THE AVAILABLE POLICY MEASURES? .......................................................................... 20 

5.1. 

BASELINE SCENARIO .......................................................................................................................... 20 

5.2.  MEASURES DISCARDED AT AN EARLY STAGE ........................................................................................... 23 

5.3. 

5.4. 

DESCRIPTION OF THE POLICY MEASURES ................................................................................................ 24 

IMPACTS OF THE POLICY MEASURES ...................................................................................................... 28 

6.  WHAT ARE THE POLICY PACKAGES AND THEIR IMPACTS? ............................................................ 36 

6.1. 

6.2. 

6.3. 

DESCRIPTION OF ALTERNATIVE POLICY PACKAGES .................................................................................... 36 

IMPACTS OF THE POLICY PACKAGES ...................................................................................................... 38 

COMPARING THE POLICY PACKAGES ...................................................................................................... 39 

7. 

PREFERRED PACKAGE .................................................................................................................. 41 

7.1. 

7.2. 

PREFERRED POLICY OPTION ................................................................................................................ 41 

OVERALL IMPACTS ............................................................................................................................ 41 

8. 

THE CHOICE OF LEGAL INSTRUMENT ........................................................................................... 43 

8.1. 

8.2. 

LEGAL OPTIONS ................................................................................................................................ 43 

PREFERRED INSTRUMENT ................................................................................................................... 44 

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? ................................................ 46 

9.1.  MONITORING .................................................................................................................................. 46 

9.2. 

EVALUATION ................................................................................................................................... 47 

ANNEX 1: PROCEDURAL INFORMATION ............................................................................................... 48 

ANNEX 2: GLOSSARY AND TERMINOLOGY ........................................................................................... 50 

ANNEX 3: FURTHER INFORMATION ON THE ORGANISATION OF SOCIAL PROTECTION SYSTEMS ........... 55 

ANNEX 4: FURTHER INFORMATION ON NON-STANDARD EMPLOYMENT AND SELF-EMPLOYMENT ....... 62 

ANNEX 5: VISUALISATION OF THE PROBLEM TREE ............................................................................... 74 

 
 
 
ANNEX 6: INTERNAL DRIVERS .............................................................................................................. 75 

ANNEX 7: OVERVIEW OF RECENT REFORMS IN MEMBER STATES ......................................................... 93 

ANNEX 8: THE EXISTING EU INSTRUMENTS ........................................................................................ 105 

ANNEX 9: ANALYTICAL METHODS ...................................................................................................... 109 

ANNEX 10: FURTHER INFORMATION ON IMPACTS OF POLICY MEASURES AND POLICY PACKAGES ..... 115 

ANNEX 11: STAKEHOLDER CONSULTATION ........................................................................................ 129 

ANNEX 12: WHO IS AFFECTED AND HOW? ......................................................................................... 142 

ANNEX 14: MONITORING INDICATORS .............................................................................................. 146 

ANNEX 15: SUMMARY OF CASE STUDIES ........................................................................................... 149 

ANNEX 16: BEHAVIOURAL STUDY ...................................................................................................... 157 

 
 
 
1. 

INTRODUCTION: POLITICAL AND LEGAL CONTEXT 

Globalisation,  technological  developments  and  demographic  ageing  have  driven  changes  in 
the European labour markets for the last two decades and will continue to do so in the future. 
Employment  will  increasingly  be  more  diverse  and  careers  will  be  less  and  less  linear.  As 
labour markets evolve, social protection systems too need reforms in order to make our social 
model future-proof making the most of the future world of work.  

Offering  access  to  social  protection  is  crucial  for  the  economic  and  social  safety  of  the 
workforce and the well-functioning labour markets that create jobs and growth. Yet there is a 
growing  number  of  people  who,  due  to  their  employment  status,  are  left  without  sufficient 
access to social security. 
The Commission Reflection Papers on harnessing globalisation1 and on the social dimension2 
recall  that  national  social  protection  systems  in  the  EU  differ  due  to  different  national 
traditions, political preferences and budgets but they face similar, transformative challenges. 
They  underline  the  importance  of  social  policies  for  a  better  distribution  of  the  benefits  of 
globalisation so people are confident that governments will protect and empower them in the 
adaptation  to  change.  They  also  stress  the  importance  of  delivering  new  protections  to  help 
individuals use their full capacities in fast-changing labour markets. 
During  the  public  consultation3
  on  the  European  Pillar  of  Social  Rights  many  stakeholders 
expressed  concerns  regarding  the  obstacles  faced  by  workers  in  non-standard  forms  of 
employment and by the self-employed in accessing social protection such as unemployment 
benefits, sickness benefits, disability benefits and pensions.  

In his State of the Union speech in September 2017, President Juncker further stressed that a 
social  fragmentation  and  social  dumping  are  to  be  avoided  in  Europe.  He  underlined  that, 
whilst  national social  systems will still remain diverse and separate for a long time, the EU 
should  strive  for  a  European  Social  standards  Union  and  for  a  common  understanding  of 
social fairness in the single market. 

Solemnly  proclaimed  in  November  2017,  the  European  Pillar  of  Social  Rights4  is  the  EU's 
political commitment to address these challenges and to uphold citizens' social rights in times 
of structural changes, including by stressing that "regardless of the type and duration of their 
employment relationship, workers, and, under comparable conditions, the self-employed have 
the right to adequate social protection" (principle 12). The Commission's initiative on "Access 
to social protection for workers and the self-employed"5 is a key step to make principle 12 of 
the  Pillar  a  reality  on  the  ground.  The  initiative  (2017/EMPL/003)  is  contained  in  the 
Commission  Work  Programme  20176  and  20187  and  is  a  key  component  of  the  Social 
Fairness Package8 to be adopted by the Commission on 13 March 2018.   

The objective is to support people in non-standard forms of employment and self-employment 
who, due to their employment statuses, are not sufficiently covered by social security schemes 
and thus are exposed to higher economic uncertainty. By focusing on the level playing field 

1 COM/2017/0240 final, available online. 
2 COM/2017/0206 final, available online. 
3 SWD(2017) 206, available online.     
4 COM(2017)250, available online. 
5 COM(2017)251 
6 COM/2016/710 final, available online. 
7 COM(2017) 650 final, available online. 
8    Together  with  a  proposal  for  a  Regulation  of  the  European  Parliament  and  the  Council  establishing  a  European  Labour  Authority 
(COM(2018)131) and a communication on the monitoring of the implementation of the European Pillar of Social Rights (COM(2018)130) 

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for  economic  agents  at  national  level,  the  initiative  will  also  aim  at  avoiding  short-term 
competitions in the internal single market, complementing the coordination of social security 
across  borders9  already  set  at  EU  level  and  ensuring  long-term  gains  stemming  from  the 
economic benefits throughout the Union.  

While  acknowledging  that  many  social  protection  schemes  aim  at  protecting  all  citizens  - 
whether or not active in the labour market - the initiative is expected to concentrate primarily 
on  social  security  schemes  which  are  governed,  financed  and  designed  in  function  of  the 
labour market dynamics and leaves out of scope social assistance and other social protection 
schemes  which are based on residence/citizenship status. The initiative focuses in particular 
on  social  security  areas  which  are  mostly  impacted  by  the  changing  nature  of  work 
relationships,  namely  unemployment  benefits;  sickness  benefits;  maternity  and  equivalent 
paternity  benefits;  invalidity  benefits;  old-age  benefits  as  well  as  benefits  in  respect  of 
accidents at work and occupational diseases. 

This  Impact  Assessment  describes  the  current  gaps  in  social  security  for  people  in  non-
standard forms of employment and self-employment across the Member States and discusses 
different  policy  options  and  impacts  for  EU  action.  It  is  important  to  note  that  the 
quantification of impacts described in this document does not capture the entire scope of the 
problem  analysed.  The  limited  nature  of  the  quantification  made  stems  from  technical 
limitations  of  the  statistical  data  and  of  the  simulation  models  available.  It  also  reflects  the 
uncertainty related to the decisions on design and financing of social security systems. Since 
these decisions are to be left to the Member States, according to the principle of subsidiarity 
underlined in Article 153 (4) TFEU, the choices to be made are yet unknown and therefore a 
full measurement of their fiscal and economic impacts is not possible.  

In  light  of  the  above,  this  document  presents  a  proportionate  assessment  of  impacts.  The 
impacts  are  primarily  described  through  a  qualitative  assessment  and,  where  possible,  a 
quantification of impacts is outlined.   

Procedural information regarding the preparation of this Impact Assessment can be found in 
Annex 1. Annex 2 provides the glossary and definitions of key terms used in this document. 

2.  PROBLEM DEFINITION 

Social security serves to protect people against the financial implications of social risks, such 
as  ill  health,  old  age  or  job  loss,  and  contributes  to  preventing  and  alleviating  poverty  and 
social  exclusion.  It  also  functions  as  a  buffer  during  economic  downturns  by  supporting 
domestic  demand.  Social  security  can  take  the  form  of  in-cash  benefits  which  replace  or 
supplement work income (unemployment benefits, pensions, sickness benefits, child benefits) 
and/or  in-kind  benefits  which  provide  support  through  the  supply  of  goods  and  of  services 
(healthcare,  child  care,  training  or  job  search  assistance).  Further  information  on  the  basic 
characteristics of social security systems in the EU can be found in Annex 3.  

Well-designed  social  security  systems  are  an  important  lever  of  competitiveness  and 
sustainable  growth  as  they  facilitate  labour  market  participation  and  support  human  capital 
investment in a  world  of rapid and growing  labour  market transformations.  Adequate social 
security contributes to a better allocation of the labour force towards emerging and dynamic 
sectors  of  the  economy  by  providing  workers  opportunities  and  incentives  to  participate  in 

9 COM(2016) 815 final, available online 

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education  and  training  and  devote  time  to  search  for  a  job  matching  their  skills.  It  helps 
people  feel  secure  in  order  to  fully  embrace  the  opportunities  created  by  new  forms  and 
patterns  of  work,  new  working  relationships  with  employers,  growing  career  transitions  as 
well  as  self-employment.  Social  security  systems  thereby  fulfil  important  functions  for 
individuals, labour  markets  as  well  as  at  macroeconomic  level,  where  they  act  as  automatic 
stabilisers dampening welfare-reducing economic cycles.  

This initiative addresses the problem that a significant and increasing share of people in the 
EU's labour market has insufficient social security coverage due to their employment status, 
in particular non-standard workers and the self-employed.  

This  development  impedes  social  security  systems  from  fully  fulfilling  their  multiple 
functions outlined above. Such gaps increase risks to the welfare of the affected individuals 
and their families who endure greater economic uncertainty. The accumulated effects of such 
disparities  in  entitlements  are  likely  to  give  rise  to  new  inter-  and  intra-generational 
inequalities  between  those  who  have  or  manage  to  gain  employment  on  contracts  with  full 
social  rights  and  those  who  do  not.  Women  may  also  be  more  disadvantaged  by  social 
security systems still geared towards linear full-time employment as they are more exposed to 
non-standard employment, particularly to part-time work, but also to temporary work and to 
fragmented careers due to interruptions related to children or caring for dependent relatives.  

Negative consequences are also felt at the aggregate level, including in terms of higher labour 
market segmentation and unfair competition between firms employing staff on non-standard 
contracts exempted from social security contributions and those not doing so. Further, there 
can be effects on the financing base of social security systems, and labour market dynamism 
to the extent that mobility and transitions between different employment forms are hindered 
by  differences  in  social  security  coverage.  In  the  long  run,  it  is  the  social  and  economic 
sustainability  of  national  social  security  systems  that  is  at  stake.  Gaps  in  access  to  social 
security for growing groups of the workforce will lead them to take recourse to safety nets of 
last resort in the case of social risk while the number of people contributing to social security 
systems will be proportionately smaller. 

2.1.  A first look at how many people are potentially not covered by social security 

Social security systems were primarily developed for and remain geared towards workers in 
‘standard  employment  relations’,  implying  a  long-term,  full-time  work  relationship10. 
Recently  developments  towards  social  security  systems  with  more  incentives  to  work  have 
taken place, but the systems were not tailored to the specificities of people in different forms 
of employment, creating deficiencies in the way they are protected.  

This potentially concerns a large share of people in the EU's labour market since the share of 
people  in  non-standard  employment  relationships  and  dependent  self-employment  has  been 
increasing11.  In  2016,  14%  of  the  total  219  million  people  employed  in  the  EU  were  self-
employed, 8% were full-time temporary employees, 4% were part-time temporary employees, 
13%  were  part-time  permanent  employees  and  60%  were  employees  with  a  full-time 
permanent  contract  (Figure  1).  Altogether,  people  in  all  categories  of  non-standard 
employment and self-employment constitute around 39% of the employed population.  

10 Eurofound (2016), Sixth European Working Conditions Survey – Overview report. 
11 European Commission, White Paper on the Future of Europe, COM(2017)2025, 1 March 2017. 

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In  addition  to  the  increasing  diversity  in  employment  forms,  careers  are also  becoming  less 
linear. In the space of a generation, the average European worker has gone from having a job 
for life to having more than ten in a career12. People are frequently moving between different 
employment statuses and/or combining salaried employment and self-employment. Moreover, 
transitions  from  school  to  work  are  taking  more  time  than  before,  and  many  young  people 
accumulate several traineeships in the process, which in many Member States’ social security 
systems implies delaying the start of the payments of contribution and thus has an impact on 
the  building  up  of  entitlements.  In  general,  evidence  shows  that  the  crisis  has  led  to  rising 
involuntary  temporary  and  part-time  work  and  to  increased  perceptions  of  job  insecurity 
overall13, which may have been accentuated by the existing deficiencies in protection (further 
information on the levels and the observed trend increase in non-standard employment and on 
self-employment are presented in Annex 4). 

Figure 1: Extent of different types of employment relationship in the EU28 in 2016 

Source: Eurostat 

Matsaganis et al. (2015)14 estimated the risk for non-standard workers and the self-employed 
of not being covered15 by three social benefit schemes: sickness, unemployment and maternity 
benefits.  Their  results  show16  a  significant  risk  of  not  being  covered  by  benefits  for  non-
standard workers and the self-employed in relation to these three benefit schemes.  

As shown in  Figure  2, two million people employed  on  non-standard contracts  in the EU 
could be at risk of not being covered by sickness benefits, with a significant variation across 
Member  States.  In  particular,  this  risk  concerns  5.1%  of  temporary  full-time  workers  and 
9.7%  of  temporary  part-time  workers  in  the  EU.  Concerning  the  risk  not  to  be  covered  by 
unemployment  benefits,  eight  million  people  in  non-standard  contracts  are  at  risk:  31.9%  of 
temporary full-time workers and 38.7% of temporary part-timers are at risk, against 0.1% of 
the standard workers (Figure 3). When it comes to maternity benefits, the proportion of non-
standard  workers  at  risk  of  not  being  covered  is  1.8%  for  permanent  part-timers,  8.5%  for 

12 European Commission, SWD(2016)51 Key economic, employment and social trends behind the European Pillar of Social Rights. 
13  EP  (2016): Precarious  Employment  in  Europe:  Patterns,  trends  and  policy  strategies.  Luxembourg.  Publications  Office  of  the European 
Union. Henceforth, this is referred to as P (2016). 
14  Matsaganis  et  al.  (2015):  Non-standard  employment  and  access  to  social  security  benefits.  Luxembourg.  Publications  Office  of  the 
European Union. Henceforth, this is referred to as Matsaganis et al. (2015). 
15 A detailed explanation of the methodology and the assumptions of the approach can be found in Annex 9.  
16 In view of the methodological approach, the estimates could be regarded as an upper bound for two reasons: Firstly, as explained in Annex 
9, based on the Labour Force Survey, the analysis cannot precisely identify the numbers of non-standard workers and the self-employed who 
are  unable  to  meet  the  requirements  for  eligibility  at  the  present  moment.  Secondly,  the  research  does  not  take  into  account  access  of  all 
categories of the self-employed when access to benefit schemes is voluntary — e.g. the study assumes that ‘the self-employed with employees 
belong to such schemes whereas those without employees do not’ (Matsaganis et al. 2015: 17). 

 4 

 
 
 
 
 
 
                                                            
temporary full-time workers and 12.7% for temporary part-timers. As will be shown later, in 
general,  the  existing  rules  do  allow  non-standard  employees  to  adhere  to  the  corresponding 
social  security  schemes  ("formal  coverage"),  although  some  specific  categories  may  be 
excluded.  The  estimated  figures  thus  also  reflect  the  fact  that  despite  being  members,  non-
standard  employees  may  often  not  be  able  to  build  up  and  access  benefits  ("effective 
coverage").  

Figure 2: Distribution of people in employment aged 15-64 at risk of not being entitled 
to sickness benefits by type of employment, 2014 (% of the total in employment) 

Source: Matsaganis et al. 2015 

Figure 3: Distribution of people in employment aged 15-64 at risk of not being entitled 
to unemployment benefits by type of employment, 2014 (% of total in employment) 

Source: Matsaganis et al. 2015 

Among  the  self-employed  in  the  EU,  about  12  million  are  estimated  not  to  be  eligible  for 
sickness  benefits,  again  with  a  wide  variation  between  countries  (Figure  2).  The  risk  of  not 
being  covered  by  unemployment  benefits  for  the  self-employed  is  as  high  as  54.5% 
(corresponding to ca. 17 million), again with significant cross-country differences (Figure 3). 
In  both  schemes  the  variation  across  Member  States  relates  to  the  fact  that  insurance  is 
mandatory in some Member States, voluntary in others and non-existent in another group of 
countries.  The  proportion  of  the  self-employed  who  are  estimated  not  to  be  covered  by 
maternity or paternity benefits is much higher: 46.1%. 

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These  figures  illustrate  the  problem  for  three  branches  of  social  security.  A  qualitative 
mapping17 by Member State, by social security branch and by employment category carried 
out  for the purposes  of this Impact Assessment (see  Section 2.2.2 and Annex 6)  shows that 
similar  problems  also  exist  for  other  branches  of  social  security  even  if  data  limitations 
prevent the presentation of corresponding quantitative estimates.  

Complementary  evidence  is  available  from  a  survey  commissioned  for  this  Impact 
Assessment.18 Considering the self-reported rates of coverage by key social security branches, 
large  gaps  emerge  between  standard  employees  on  the  one  hand  and  the  self-employed  and 
non-standard workers on the other (see Figure A.28 in Annex 16). These gaps are particularly 
pronounced  when  considering  unemployment  benefits  and  sickness  benefits.  Compared  to 
standard  employees,  the  incidence  of  self-reported  benefit  coverage  in  case  of  need  is  50 
percentage  points  (pps)  lower  for  the  self-employed  and  29  pps  lower  for  non-standard 
employees  regarding  unemployment  benefits.  For  sickness  benefits,  self-reported  benefit 
coverage is 35 pps for the self-employed and 33 pps for non-standard employees.  

Differences are less pronounced in the case of old-age benefits between standard employees 
and  the  self-employed  non-entrepreneurs  (6  pps),  while  there  is  a  difference  of  22  pps 
between  standard  and  non-standard  employees.  Similar  gaps  were  registered  in  case  of 
maternity, invalidity and accidents at works and occupational injuries. 

It  is  important  to  notice  that  such  gaps  in  self-reported  coverage  may  reflect  existing  real 
limitations, but also reflect a lack of transparent information allowing people to be aware of 
benefits they are entitled to.    

2.2.  Problem drivers 

The  gaps  of  access  in  social  security  affecting  non-standard  workers  and  the  self-employed 
are  the  result  of  external  drivers  to  social  security  (like  changes  in  labour  markets, 
technological progress, globalisation and demographic change) as well as intrinsic ones. They 
are now reviewed according to the structure outlined in the problem tree shown in Annex 5. 

2.2.1. 

External drivers 

Several  factors  are  shaping  developments  in  the  EU  labour  market(s)  contributing  to  an 
increasing  share  of  people  being  outside  standard  employment  and  thus  potentially  affected 
by gaps in social security coverage.  

Intensifying  globalisation  has  changed  production  processes  and  increased  competition  for 
firms19.  Resulting  needs  to  increase  cost  efficiency  have,  among  others,  been  addressed  by 
firms by lowering their labour costs – by offshoring and also by containing domestic labour 
costs  and  making  it  more  flexible.  As  part  of  these  efforts,  employers  may  call  in  self-
employed  workers  or  hire  temporary  staff  as  well  as  people  in  new  forms  of  work.  Such 
flexible forms of labour can at the same time be more compatible with the above-mentioned 
requirements of production in a global economy. Moreover, there is an ongoing  shift in the 

17  See  ESPN  (2017):  Access  to  social  protection  for  people  in  non-standard  employment  and  in  self-employment,  Synthesis  report. 
Luxembourg: Publications Office of the European Union. Henceforth, this is referred to as ESPN (2017). 
18 Open evidence (forthcoming): Behavioural Study on the Effects of an Extension of the Access to Social Protection for People in All Forms 
of Employment. Brussels: European Commission, Henceforth, this is referred to as Open Evidence (forthcoming). 
19 Bang K.E., Markeset T. (2012): Identifying the Drivers of Economic Globalization and the Effects on Companies’ Competitive Situation. 
EC: Globalisation and the EU economy, available online. 

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sectoral  structure  of  the  EU  economy  from  manufacturing  towards  an  increasing  role  of 
services. Since non-standard employment is more prevalent in the services sectors, this shift 
also  implies  an  increase  in  this  kind  of  employment20,  including  non-standard  jobs  in  some 
high-skills service areas21. 

The increasing recourse to existing forms of non-standard work as well as the emergence of 
new ones is also closely linked to recent technological developments transforming the world 
of  work  in  unprecedented  ways.  New  IT  technologies,  automation  and  digitalisation  are 
changing  the  production  and  delivery  of  goods  and  services  while  technologies  such  as 
increased robotisation of standardisable tasks or the development of digital platforms are also 
having important impacts on the organisation of work22. These developments are giving rise 
to  such  phenomena  as  platform  work,  crowdsourcing  and  the  collaborative  economy.  In 
conjunction  with  the  above-mentioned  changes  related  to  globalisation,  these  technological 
transformations also resulted in higher use of traditional non-standard employment and self-
employment and to the development of new atypical working arrangements23, such as workers 
with  no  employment  contract  (casual  workers;  "zero  hours"  contracts),  workers  who  report 
working a very small number of hours (< 8 hours a week) or who hold a temporary contract 
for less than 6 months.  

At  the  same  time,  an  increase  in  non-standard  forms  of  work  may  result  from  policies  in 
response  to  population  ageing,  which  is  weighing  on  the  size  of  labour  forces  and  putting 
financial  pressure  on  social  security  systems,  both  on  the  expenditure  side  (healthcare, 
pensions)  and  on  the  financing  side  (shrinking  workforce)24.  Offering  flexible  working 
practices25 may play a key role in encouraging more people to enter the workforce (including 
women,  low-qualified  people  and  migrants),  and  may  imply  increasing  the  number  of  non-
standard workers and expanding the diversity of new forms of employment. 

The  additional  pressures  of  the  recent  economic  crisis  may  have  further  contributed  to  the 
increasing use of new arrangements instead of traditional forms of work and contracts. While 
such new forms of work in relation to the developments outlined above respond to flexibility 
needs of (public and  private) employers and workers, and have  supported the integration of 
people  in  the  labour  market  who  otherwise  risked  to  stay  in  unemployment,  increases  in 
labour  flexibility  may  be  associated  with  higher  levels  of  job  insecurity,  as  reflected  in  the 
emergence of unstable and informal jobs, with irregular salaries and reduced social security. 
Effective  welfare  policies  are  thus  needed  to  accompany  the  changes  to  avoid  larger 
inequalities within countries and heightened fragility of employment26. 

Changes  in  labour  markets  institutions  can  mediate  the  effects  of  globalisation  and 
technological progress on work and employment relations27. The ongoing rise of new working 
arrangements  poses  some  challenges  to  the  existing  framework  of  employment  legislation 
and, more broadly, of welfare policy – from minimum wages to benefits and pensions – which 

20 Greve (2017): Technology and the Future of Work: The impact on labour markets and welfare states. Edward Elgar Publishing. 
21  Eichhorst  and  Marx  (2015):  Non-standard  employment  in  post-industrial  labour  markets:  an  occupational  perspective.  Edward  Elgar 
Publishing. 
22  While  less  than  5%  of  all  occupations  can  be  automated  entirely  through  the  use  of  demonstrated  technologies,  about  60%  of  all 
occupations have at least 30% of constituent activities that could be automated. Tasks can sometimes be replaced by smart machines or be 
split up, making it possible to outsource tasks to freelancers online. 
23 Broughton et al. (2010): Flexible forms of work: 'Very atypical' contractual arrangements. European Working Conditions Observatory. 
24 See European Commission (2015), The 2015 Ageing Report, European Economy, 3. 
25 Di Tella, MacCulloch (2002): The consequences of labour market flexibility: Panel evidence based on survey data, European Economic 
Review 49. 
26 Bluth (2017): Globalisation and the welfare state. Focus paper, Bertelsmann Stiftung. 
27 Gonos (1997): The Contest over “Employer” Status in the Postwar U.S.: The Case of Temporary Help Firms. Law & Society Review 31: 
81– 110. 

 7 

 
 
 
                                                            
remains  structured  around  the  concept  of  standard  employment  contract.  Furthermore,  the 
employment/self-employment binary approach of employment legislation is no longer clear in 
labour  markets.  New  forms  of  employment  have  blurred  the  boundaries  between  the  two 
groups creating legal loopholes and leaving many people in the labour market unprotected.  
The  observed  decrease  in  collective  bargaining  coverage28  implies  a  loss  of  protection  of 
working  conditions  for  a  growing  number  of  workers29.  Moreover,  the  instability  of 
employment  relationships,  the  fear  of  reprisals  and  the  limited  opportunity  to  join  a  union 
could  sometimes  hamper  the  "de  facto"  exercise  of  collective  rights  which  are  often  being 
defined with reference to  an open-ended  contract model30, affecting  especially non-standard 
employees. These developments thus imply an additional, complementary lack of protection.  

2.2.2. 

Internal drivers 

Alongside the external drivers, there are factors intrinsic to the social security systems which 
are root causes for the lack of access for non-standard workers and the self-employed. They 
regard  the  rules  governing  formal  coverage,  effective  coverage,  transferability  and 
transparency.  A  summary  overview  of  these  drivers  is  presented  in  this  section;  Annex  6 
provides more detail and background.  

It should be noted that, although principle 12 of the European Pillar of Social Rights refers in 
general  to  social  protection  as  an  instrument  to  support  fair  and  well-functioning  labour 
markets  and  welfare  systems,  the  internal  drivers  presented  here  relate  only  to  a  subset  of 
social security branches.  
A  comprehensive  mapping31  of  gaps  in  access  for  all  branches  –  unemployment  benefits, 
sickness benefits, old age benefits, benefits related to accidents and injuries at work, invalidity 
benefits,  healthcare,  family  benefits,  maternity/paternity  benefits  and  long-term  care  -  has 
been conducted. The mapping clearly showed that not all social protection areas are affected 
by labour market evolutions.32  

The mapping showed that the areas where the type of work contract or employment status has 
a  strong  influence  on  the  social  protection  coverage  are  unemployment  benefits,  sickness 
benefits,  maternity  and  equivalent  paternity  benefits,  invalidity  benefits,  old-age  benefits, 
benefits  in  respect  of  accidents  at  work  and  occupational  diseases;  the  analysis  on  these 
branches will thus be presented in more detail below. 

The common element among these branches is that the benefits they provide have a function 
of  income  replacement  in  case  the  associated  risk  materialises  and  interrupts  the  person's 
work.  For  instance,  sickness  benefits  provide  income  replacement  in  the  case  of  prolonged 
illness.  While  healthcare  also  involves  some  cash  benefits,  these  relate  to  the  provision  of 
services rather than to the replacement of income, and it has not been possible to identify a 
strong impact of a person's labour market status on the corresponding coverage. This branch 
is thus not included it in the scope of this initiative. 

28  See  European  Commission  (2015):  Employment  and  social  development  in  Europe,  Publications  Office  of  the  European  Union, 
Luxembourg. 
29  Koukiadaki  et  al.  (2016):  Joint  regulation  and  labour  market  policy  in  Europe  during  the  crisis:  a  seven-country  comparison.  Joint 
regulation and labour market policy in Europe during the crisis, Brussels, ETUI, 7-134. 
30 Gyulavári et al. (2008): The impact of new forms of labour on industrial relations and the evolution of labour law in the European Union, 
p. 72, European Parliament. 
31 See ESPN (2017). 
32 Going beyond the social security branches, for the same reason social assistance, a key part of social protection, is considered out of scope 
for this initiative, as mentioned in Chapter 1.  

 8 

 
 
 
 
                                                            
Another  important  point  to  note  concerns  the  personal  scope  of  the  initiative.  The  initiative 
supports  workers  (as  defined  in  Annex  233)  which  do  not  have  a  full-time  open-ended 
contract,  and  the  self-employed.  Both  groups  show  a  high  level  of  heterogeneity  and  the 
current  forms  of  non-standard  work  and  self-employment  are  described  more  in  detail  in 
Annex  2  and  Annex  4.  By  virtue  of  the  residual  definition  of  non-standard  workers  given 
above,  all  current  forms  of  non-standard  employment,  as  well  as  of  self-employment,  are 
included in the scope of the initiative, without further sub-classifications. This also allows the 
initiative  to  be  future-proof,  since  labour  markets  are  evolving  fast  and  technologies  are 
giving rise to many different new forms of employment not yet known.  

Formal coverage 

Formal  coverage  means  that  a  person  in  employment  or  self-employment  is  entitled  to 
participate  in  social  security  systems.  It  is  a  prerequisite  for  benefitting  from  the  protection 
granted  by  the  scheme  in  case  of  need.  Limited  formal  coverage  means  that  the  rules 
governing access to social security schemes do not allow individuals from specific groups to 
become members. Thus individuals are neither covered on a mandatory basis nor can they opt 
to join corresponding schemes on a voluntary basis.  

Overall, people in non-standard employment usually have the same formal coverage by social 
benefit schemes as those in standard employment. However, in certain Member States, there 
are  important  exceptions  relating  to  specific  categories  of  non-standard  workers,  notably 
casual  and  seasonal  workers,  apprentices  or  trainees,  on-demand  workers,  and  those  on 
temporary agency contracts as well as people working on certain contracts defined at national 
level, such as civil law contracts in Poland (more than half a million people) or mini-jobs in 
Germany  (7.6  million)  (see  Table  A.2  in  Annex  6).  Such  coverage  gaps  are  wide-spread 
geographically,  they  have  been  identified  in  fifteen  Member  States  for  unemployment 
benefits,  twelve  Member  States  for  sickness  benefits,  twelve  Member  States  for  maternity 
benefits,  seven  Member  States  for  accident  at  works  and  occupational  injuries  and  thirteen 
Member States for old-age and survivors' benefits. 

The  situation  is  more  critical  for  the  self-employed.  There  are  fundamental  gaps  in  formal 
coverage  regarding  three  core  branches,  where  the  self-employed  as  a  group  are  excluded 
from membership. In particular, the self-employed, or important subgroups, do not have any 
access to unemployment benefits in eleven Member States (see Table A.3 in Annex 6). They 
cannot  be  insured  against  accidents  at  work  and  occupational  injury  through  social  security 
schemes in ten Member States and they are not covered by sickness benefits in three.  

In other countries, the self-employed, or at least some categories, have formal coverage on a 
voluntary  basis  for  unemployment  insurance,  sickness  benefits  and  accidents  at  work  in 
eleven,  seventeen,  nine  countries,  respectively.  It  is  worth  noting  however  that  rates  of 
enrolment in voluntary schemes are low (less than 1% to 20 %) in most Member States where 
this  possibility  exists.  The  low  adherence  of  self-employed  may  be  related  to  alternative 
individual coping strategies, affordability and financial disincentives, to unfavourable system 
design, lack of awareness or individual myopic behaviour. The latter may affect the individual 
decisions on intertemporal income distribution. This may be related to erroneous foresight, or 
to an unfounded fear that what has been promised for tomorrow might not materialise.  

33 The definition is in line with the one in the recent proposal for a Directive on transparent and predictable working conditions in the EU 
(COM(2017) 797 final, available online). The link of the current initiative with the proposal is further discussed in Chapter 5. 

 9 

 
 
 
 
                                                            
Effective coverage and transferability 

Even  when  non-standard  workers  and  the  self-employed  have  formal  coverage,  they  may 
experience gaps  of  effective  coverage,  that  is,  rules  of  social  security  schemes  applicable  to 
non-standard  workers  and  the  self-employed,  compared  to  those  applicable  to  standard 
employees,  embed  obstacles  preventing  them  from  accruing  and  taking  up  adequate 
entitlements in case of need. This may be because the rules are less favourable for the self-
employed  or  non-standard  workers  or  because  identical  rules  for  all  three  groups  are  more 
difficult to meet for people outside standard employment. For instance, given that temporary 
employees transition more frequently into unemployment than standard employees34, it can be 
relatively  more  difficult  for  them  to  accumulate  a  given  qualifying  period  within  the 
corresponding reference period to qualify for unemployment benefits.  
According to the expert mapping35, the rules affecting effective coverage of the self-employed 
and  of  non-standard  employees  relate  to  time  thresholds  for  contributions  and  entitlements 
(minimum  qualifying  period,  minimum  working  period,  waiting  period  or  duration  of 
benefits),  to  the  way  the  income  base  is  assessed  for  the  self-employed  or  to  the  level  of 
adequacy  of  the  benefits  (Annex  6).  Overall,  obstacles  to  effective  coverage  have  been 
identified for at least nineteen Member States and in relation to six social security branches, 
notably  unemployment,  sickness,  maternity,  accidents  at  work  and  occupational  injuries, 
invalidity  and  old  age  and  survivors'  benefits.  Minimum  qualifying  periods  and  are 
particularly  problematic  for  non-standard  workers,  while  the  self-employed  mostly  face 
problems related to longer waiting periods and shorter duration of benefits. 

Regarding non-standard workers, minimum qualifying periods and minimum working periods 
in  unemployment  benefit  schemes  have  been  identified  as  problematic  in  six  and  four 
Member States respectively. Minimum qualifying periods are also challenging in the case of 
sickness  benefits  in  five  Member  States.  Waiting  periods  are  unfavourable  in  six  Member 
States in the case of maternity benefits (see Table A.6 in Annex 6).  

Regarding the self-employed, they face longer qualifying periods for unemployment benefits 
in  four  Member  States  and  are  subject  to  longer  waiting  periods  before  receiving  sickness 
benefits in eight Member States (see Table A.7 in Annex 6). The methods for calculating the 
income base or the reference income may also be unfavourable to them because they consider 
long previous periods of earnings or on future earnings instead of current earnings, not taking 
into  account  the  fluctuations  characterising  incomes  from  self-employment.  Moreover,  in 
some  Member  States  many  self-employed  may  receive  lower  benefits  compared  to  an 
employee with the same earnings because benefits are set at different levels according to the 
form of employment (e.g. pensions for the self-employed in Italy or sickness benefits for the 
self-employed in Belgium).  

Transferability may refer to the possibility of transferring accumulated entitlements to another 
scheme  following  professional  transitions  between  sectors  or  employment  forms.36  In  this 
case  a  lack  of  transferability  can  hinder  the  building  up  of  adequate  entitlements  over  the 
course of a career characterised by frequent transitions as in the case of old age pensions. 

34  See  European  Commission  (2017):  Employment  and  Social  Developments  in  Europe  review,  Luxembourg:  Publication  Office  of  the 
European Commission. 
35 See ESPN (2017). 
36 This implies that entitlements can only be transferred when the individual has formal coverage (and does choose to be enrolled in the case 
of voluntary coverage) before and after the transition. 

 10 

 
 
 
                                                            
Transferability can also refer to making qualifying periods in the previous employment status 
(or  in  concomitant  employment  statuses)  count  towards  the  qualifying  periods  in  the  new 
status. This is because the entitlement to benefits in the new scheme depends on contribution 
history but the entitlements in the old scheme cannot be transferred. In this second case, gaps 
in  transferability  may  impede  individuals  for  example  of  transitioning between  employment 
and  self-employment  when  these  two  statuses  are  covered  by  different  schemes  (see  Table 
A.8 in  Annex 6).  In  view of  careers that  are increasingly characterised by frequent  changes 
between  jobs  and  employment  statuses,  this  regulatory  failure  is  of  rising  importance. 
Obstacles to transferability can be due to lack of regulation in this area (four Member States), 
to  extremely  high  administrative  costs  (one  Member  State)  or  to  different  rules  governing 
different schemes (two Member States) which prevent people from transferring accumulated 
rights. 

In the case of voluntary schemes, the transfer of entitlements may be influenced by behaviour 
of  individuals.  A  number  of  factors  can  drive  the  decision  to  adhere  or  not  to  a  voluntary 
scheme,  including  whether  coverage  is  already  available  through  the  first  job,  the  family 
context  and  private  wealth  accumulation  which  provide  alternative  means  of  coping  with 
risks, as well as the individual's assessment of future risks facing them.  

In  some  Member  States  the  time  profile  of  replacement  rates  in  unemployment  insurance 
depends on the contribution history and shorter contribution histories are likely to characterise 
workers  on  temporary  contracts  as  compared  to  full-time  workers.  Here  again  behaviour  of 
individuals  matter.  Particularly  in  the  case  of  the  self-employed,  where  the  rules  for 
declaration  of  income  are  less  stringent,  or  where  the  individual  has  the  option  to  (legally) 
choose  what  level  of  income  to  be  assessed  upon,  they  may  report  low  incomes,  leading  to 
low entitlements. The low declaration of income due to myopic behaviour has been identified 
as  an  obstacle  to  the  adequate  protection  of  the  self-employed  in  at  least  half  a  dozen  of 
Member States37. 

Transparency  

Finally,  there  are  gaps  in  the  provision  of  transparent  information  to  the  general  public, 
potential  scheme  members,  schemes  members  and  beneficiaries  about  the  scheme's  rules  or 
about  the  individual  obligations  and  entitlements.  Transparency  of  information  is  ever  more 
important  due  to  the  growing  numbers  of  transitions  between  different  employment  status, 
contracts  forms  and  social  security  schemes.  A  lack  of  simple  and  transparent  information 
lowers the level of people's awareness on their rights and obligations towards social security 
and  stops  them  from  taking  informed  decisions.  Indeed,  a  significant  proportion  of  the 
population (see also Annex 6), especially among the self-employed and non-standard workers, 
is  unaware  of  their  social  security  coverage  (up  to  20%  for  some  categories)38.  If  generic 
information about social security schemes is only absent in five Member States, personalised 
information,  including  an  overview  of  rights  and  obligations  and  the  possibility  to  obtain 
information  through  online  simulation  tools,  is  only  available  in  about  half  of  the  Member 
States (see Table A.10 in Annex 6).   

Despite the general acknowledgement of the challenges at hand, corroborated by the majority 
of  stakeholders  during  the  consultations  organised  in  the  framework  of  this  Impact 
Assessment, national reform efforts are partial and uneven across the EU Member States. In 

37  In  Spain,  86  %  of  self-employed  choose  the  minimum  contribution  base  (see  Case  study  on  economically  dependent  self-employed 
(TRADE) and box A.6. 
38 OpenEvidence (forthcoming).  

 11 

 
 
 
                                                            
recent years, some Member States started reforms to address some of the deficiencies related 
to social security coverage for non-standard worker and for the self-employed (see Annex 7 
for  a  full  overview  of  the  national  reforms).  These  reforms  have  mostly  concerned  the 
extension  of  social  security  coverage  to  people  in  non-standard  employment  and  in  self-
employment,  in  particular  concerning  unemployment  benefits  coverage  (e.g.  France, 
Lithuania, Poland, Portugal and Sweden). Only a few reforms have addressed the problems of 
effective  coverage  (e.g.  Spain),  transferability  (e.g.  France  and  Ireland)  and  transparency. 
Moreover,  although  a  number  of  countries  have  developed  specific  guidance  and  start-up 
programmes  for  the  entrepreneurial  self-employed,  this  has  rarely  also  led  to  a  redesign  of 
social security taking into account their special needs. 

The  results  of  the  implementation  of  already  undertaken  national  reforms  can  only  be 
evaluated in some years. However, the reforms seem partial in their scope (both regarding the 
branches of social security and groups of people in the labour market) and the efforts appear 
to be uneven across the Member States. The identified gaps in formal and effective coverage 
and  the  lack  of  transparency  and  transferability  of  accumulated  rights  and  together  with 
behavioural biases (and their influence on the voluntary take-up of social security schemes), 
therefore leave a large number of people in the labour market uncovered by social security.  

2.3.  Consequences 

With  an  increasing  number  of  people  outside  the  scope  of  the  social  security  systems,  their 
ability to insure people against the financial implication of social risks, to prevent poverty, to 
support  labour  market  participation  and  act  as  an  automatic  macroeconomic  stabiliser  is 
significantly reduced. Overall, a differential coverage of social security, based on contract and 
status  of  people  in  employment,  has  previously  been  criticised  and  documented39  as  both 
unfair and inefficient. It has consequences on those directly affected by the gaps but also on 
companies, on the economy and on society as a whole.  

2.3.1. 

Consequences for non-standard workers and the self-employed 

Insufficient  coverage  of  social  security  significantly  raises  the  risks  to  the  welfare  of  the 
affected  and  their  families.  People  who  earn  their  living  from  non-standard  employment  or 
self-employment  and  do  not  have  sufficient  social  security  coverage  are  exposed  to  greater 
economic  uncertainty  due  to  the  individualisation  of  risk.  At  the  same  time,  some  of  these 
groups  may  be  less  able  to  deal  with  these  risks  on  an  individual  basis.  Together,  this  may 
lead  to  more  precarious  lives.  Indeed  non-standard  workers  and  the  self-employed  are 
exposed to significantly higher poverty risk in most EU countries.  

Non-standard  employees'  rate  of  being  at-risk-of-poverty  (AROP)  is  higher  in  all  Member 
States  (except  in  Malta)  than  the  one  for  workers  with  a  permanent  and  full-time  job.  On 
average in the EU28, around 15% of temporary and part-time workers are at risk of poverty, 
more than double the share observed for standard employees. 

Figure 4: In-work at-risk-of-poverty rate employees according to their status, by 
countries, 2015, % 

39 Matsaganis et al. (2016) and ESPN (2017). See European Economic and Social Committee (EESC) (2010): New trends in self-employed 
work: the specific case of economically dependent self-employed work, available online. EESC (2013): Abuse of the status of self-employed, 
available online. EESC (2016): The changing nature of employment relationships, available online. European Parliament (2014): Social 
protection for all, including self-employed workers, available online. 

 12 

 
 
 
 
 
                                                            
Source: Eurostat, Employees with a temporary job; Employees at part-time. 
Note: countries are ranked according to the growing poverty risk rate of workers with permanent jobs. 

The significant variation that exists across Member States (see figure 5) reflects differences in 
both protection through the tax-benefit system and in income. Indeed, non-standard workers 
are  estimated  to  have  lower  wages  with  respect  to  standard  employees.  For  instance,  it  has 
been estimated that, controlling for workers characteristics, there remains a significant wage 
gap  disadvantaging  temporary  employees  relative  to  standard  employees  of  13%  to  21% 
depending  on  the  Member  State40.  The  lack  of  social  security  coverage  can  thus  compound 
disadvantages stemming from lower levels of income and unfavourable social security rules. 
Similarly,  the  self-employed  face  a  higher  risk  of  poverty41  than  standard  employees;  their 
AROP  exceeds  20%  in  the  EU28,  nearly  three  times  the  risk  of  standard  employees.  As 
reflected  in  Figure  5,  observed  ratios  are  much  more  pronounced  in  some  Member  States, 
with a maximum of 10 reached in Romania. Moreover, there is a negative correlation (- 0.6), 
between the at-risk-of-poverty of the self-employed and that of the employees42. This means 
that, in general, in Member States where employees are relatively well-protected against the 
risk of poverty, this is far less so for the self-employed. Where also the employees face a high 
risk,  differences  between  both  groups  are  less  marked.  When  analysing  the  role  of  social 
security  in  alleviating  poverty  of  both  groups,  it  is  noticeable  that  (see  Figure  643)  social 
security diminishes the poverty rate of both people in employment and self-employment in the 
majority of the Member States. However, across most Member States the reduction is visibly 
more pronounced for employees than for people in self-employment, which partly reflects the 
identified gaps in access for the latter group44.  

Figure 5: In-work at-risk-of-poverty rate 
employees vs. self-employed, by 
countries, 2015, % (%) 

Figure 6: Percentage change in at-risk-of-
poverty rate, from pre-benefit to disposable 
income  

40 See European Commission (2017): Labour Market and Wage Developments in Europe Annual Review. The gap is estimated to be more 
pronounced in Member States with a high share of temporary workers. 
41 Measuring poverty among the self-employed is complex. While income poverty levels are quite high among the self-employed, material 
deprivation rates are generally much lower and this difference is higher for the self-employed than for the employees. This can be due to the 
fact  that  the  self-employed  can  more  often  draw  on  assets  accumulated  over  the  life  cycle  or  on  business  assets  they  control.  The  self-
employed constitute a very mixed segment of the workforce and within-group inequality is quite significant. Own-account workers emerge 
as being particularly at-risk of poverty substantiating worries about the rise of this form of self-employment. 
42 See ESPN (2017), fig. 6, p. 25.  
43 The figure shows the difference between at risk of poverty rates calculated on the basis of market income adjusted for taxes, but not yet 
taking into account benefits, versus those calculated on the basis of disposable income (post-benefits).  
44 In addition to differences in the effect of social security benefits, results may inter alia also reflect differences in household composition 
between both groups. 

 13 

 
 
 
 
 
 
 
                                                            
Source: Eurostat, EU SILC data for 2016 

Source: Eurostat, EU SILC data for 2016. 

The  gaps  in  coverage  of  non-standard  employment  contribute  to  a  lack  of  fairness  within 
society,  widening  divides  between  generation,  gender  or  social  groups,  since  young  people, 
the foreign-born and women are less frequently hired on full-time, open-ended contracts. The 
differences  in  coverage  may  also  impede  labour  market  mobility  of  these  groups,  which 
makes it even more difficult to close gaps between groups in the long-term.  

2.3.2. 

Consequences for businesses and competitiveness 

Differences in treatment related to social security create bias in the level playing field relating 
to companies’ hiring choices: firms may overuse employment contracts exempted from social 
security  contribution.  They  transfer  the  risks  and  the  costs  of  protection  through  social 
security  systems  to  third  parties  (workers,  dependant/bogus  self-employed  and/or  public 
budget).  Such  practices  contribute  to  maximise  profits  in  the  short-term,  but  they  also  have 
costs  in  the  long  run:  they  demotivate  workers,  lead  to  higher  turnover,  have  reputational 
effects,  and  slowdown  productivity  gains  and  innovation  at  the  company  level.  They  also 
create  unfair  competition  with  companies  that  continue  to  contribute  to  social  security 
systems and they threaten to erode the economic basis for standard employment as such jobs 
will be subject to competition from jobs exempted from the cost of social contributions. 

During  discussions  on  globalisation,  business  and  political  circles  have  expressed  concerns 
that high employer contributions to social security make national economies less competitive. 
However, several studies have found a positive correlation between the openness and size of 
the welfare state, and social expenditure and competitiveness45. In particular they found that 
social  spending  increases  competitiveness  and  show  that  reverse  causality  (i.e.  that  higher 
competitiveness leads to larger welfare states) is weak. They also find that inward FDI flows 
in OECD countries are positively affected by countries’ expenditure on social welfare. 

2.3.3. 

Consequences for the labour market, public budgets, the economy and society 

From  an  employment  perspective,  deficiencies  in  social  security  coverage  increase  labour 
market segmentation46, which can be associated with higher levels of unemployment (mainly 

45 Epifani and Gancia (2009): Openness, Government Size and the Terms of Trade, Review of Economic Studies, 2009, vol. 76, issue 2, 629-
668. 
46  Labour  market  segmentation  indicate  the  persistent  divide  in  job  security  and  working  conditions  between  workers  with  similar 
characteristics but holding different types of contracts. 

 14 

 
 
 
 
 
 
 
 
                                                            
for vulnerable groups) and lower quality of skills matching47. Moreover, the absence of social 
security  make  it  less  attractive  for  people  to  take  non-standard  jobs  or  move  between  and 
combine  dependent  employment  and  self-employment,  preventing  labour  reallocation  and 
hampering labour market's ability to respond to shocks as well as making segmented labour 
markets self-perpetuating, ultimately with negative implications on (total factor) productivity 
growth48. 

Moreover,  differences  in  social  security  coverage  distort  the  playing  field  between  people 
who  pay  no  or  lower  social  security  contributions  and  those  with  full,  obligatory 
contributions.  It  creates  legal  possibilities  to  avoid  paying  contributions  and  to  underbid, 
leading to a race to the bottom and downward social convergence. 

Insufficient  protection  through  social  security  systems  for  certain  groups  may  contribute  to 
higher  spending  for  public  budgets  in  other  areas.  In  the  short  term  an  increasing  share  of 
people  in  non-standard  work  or  self-employment  without  social  security  coverage  does  not 
necessarily save public money and may even lead to rising costs for (generally tax-financed) 
safety nets of last resort that they may then rely upon. This is because, on the one hand, even 
if  not  paying  social  contributions  and  receiving  social  benefits,  they  are  entitled  to  social 
assistance,  minimum  income  or  universal  minimum  healthcare  benefit  package.  Increased 
reliance on the latter can have an additional efficiency cost including through delays in care 
seeking  and  overuse  of  costly  emergency  services  instead  of  primary  or  integrated  care 
services.  

In  the  longer  run,  the  absence  of  benefits  to  facilitate  social  and  economic  inclusion  may 
make  long-term  unemployment  and  mental  health  problems  more  likely49.  Therefore,  if  the 
longer-term welfare of people in non-standard work and self-employment is not secured, this 
will imply a social cost to be borne by these individuals and by the society, with higher costs 
to public budgets50.  

Importantly,  the  main  fiscal  basis  of  social  insurance  remains,  in  many  countries,  standard 
work.  An  increasing  share  of  people  outside  the  systems  may  thus  impair  the  fiscal 
sustainability of social security systems, an effect comparable in nature to the corresponding 
detrimental effects of population ageing and resulting increases in the dependency ratio51 on 
their sustainability52. Annex 3 provides further information on the financing of social security 
systems and the challenges to their sustainability relating to the problem under review.  

47 Brodolini (forthcoming). 
48 OECD (2012): OECD Employment Outlook 2012, OECD Publishing, Paris. 
49  Eurofound  2013:  Access  to  social  benefits:  reducing  non-take-up.  Moreover,  unemployment  insurance  mitigated  adverse  health  effects 
during the financial crisis. Unemployment benefits may provide alleviation for people in vulnerable situations, allowing them access to basic 
services, with the potential to prevent or reduce escalation of problems (Ferrarini et al (2014): Decomposing the effect of social policies on 
population health and inequalities: an empirical example of unemployment benefits. Scand J Public Health. 2014 Nov; 42(7):635-42.). 
50 Increasing the coverage of non-standard workers could have a positive net effect. E.g. the mini-job and midi-regulations engender fiscal 
costs (social security contributions and taxes) ranging between EUR 600 and 800 million per year (see Case study – gaps in access to social 
protection for  mini-jobbers in Germany) and the estimated loss of the public social insurance systems in Romania due to the replacing of 
regular employment contracts by day-labour is around 1,824 million RON in 2017 (see Case study – gaps in access to social protection for 
casual workers in Romania). 
51  Sachverständigenrat  zur  Begutachtung  der  gesamtwirtschaftlichen  Entwicklung  (2006),  Jahresgutachten  2006/2007,  available  online, 
p. 262. 
52  As  the  new  forms  of  work  may  push  down  the  overall  wage  level  (see  European  Commission  (2017):  Labour  Market  and  Wage 
Developments), the fiscal basis for insurance could be further eroded. 

 15 

 
 
 
 
                                                            
3.  WHY SHOULD THE EU ACT? 

3.1.  Legal basis 

The initiative "Access to social protection for workers and the self-employed" will support the 
Union's aims recognised in Art. 3 of the Treaty on the EU: to promote the well-being of its 
peoples,  the  sustainable  development  of  Europe  aiming  at  full  employment  and  social 
progress, but also the aim to promote social justice and protection, equality between women 
and men and solidarity between generations.  

Moreover, it will respond to Art. 9 TFEU, which states that "In defining and implementing its 
policies and activities, the Union shall take into account requirements linked to the promotion 
of a high level of employment, the guarantee of adequate social protection, the fight against 
social exclusion, and a high level of education, training and protection of human health". In 
addition, Art. 151(1) TFEU states that the Union and the Member States shall have as their 
objectives the promotion of "proper social protection".  

Furthermore, the initiative will promote the aims of the Charter of the Fundamental Rights of 
the  European  Union  as  reflected  in  its  dedicated  article  on  Social  security  and  social 
assistance (Art. 34). 

Article  153(1)(c)  and  (2)  TFEU  enables  the  EU  legislator  to  adopt  measures  in  the  field  of 
social  security  and  social  protection  of  workers  as  long  as  it  (i)  avoids  imposing 
administrative,  financial  and  legal  constraints  in  a  way  which  would  hold  back  the  creation 
and  development  of  small  and  medium  sized  undertakings,  ii)  does  not  affect  the  right  of 
Member States to define fundamental principles of their social security systems; (iii) does not 
significantly affect the financial equilibrium of these systems. This legal basis can be used to 
address  the  challenges  of  access  to  social  security  and  social  protection  for  persons  in  non-
standard employment. The Council is requested to act in unanimity. 

Article  352  TFEU  can  provide  the  legal  basis  of  an  initiative  related  to  the  challenges  of 
access  to  social  security  for  people  in  different  forms  of  self-employment.  In  this  case  the 
Council is also requested to act in unanimity.  

The existing EU acquis related to the rights and obligations in relation to social protection is 
implemented through a variety of legislative and non-legislative provisions. However, none of 
these  fully  address  the  rights  and  obligations  of  people  in  non-standard  employment  and 
forms of self-employment. For an overview of available EU instruments, see Annex 8. 

3.2.  Results of the social partners consultations and of the public consultation 

The European Pillar of Social Rights was jointly proclaimed by the European Parliament, the 
Council  and  the  Commission  on  17  November  2017.  The  consultations  undertaken  in  the 
context  of  the  Social  Pillar  had  already  seen  many  stakeholders  express  concerns  regarding 
the obstacles faced by workers in non-standard forms of employment and by self-employed in 
accessing  social  protection  such  as  unemployment  benefits,  sickness  benefits,  disability 
benefits,  health  insurance  and  pensions.  Relevant  contributions  from  other  EU  institutions, 
notably  the  European  Economic  and  Social  Committee,  the  Committee  of  Regions  and 

 16 

 
 
 
 
European Parliament to the Consultation also highlighted issues in this area and, in the case of 
the European Parliament, called on the EU to act.53  

Article  155  TFEU  requires  that  labour  and  management  are  consulted  on  a  range  of  issues 
concerning employment and social affairs set out in Article 153 of the Treaty, including the 
area  of  social  security  and  social  protection.  Consultation  of  representative  social  partner 
organisations  took  place  prior  to  the  presentation  of  the  proposal  regarding  access  to  social 
security  of  non-standard  workers  in  accordance  with  Article  154  TFEU.  The  procedure  of 
Article  154(2)  TFEU  is  not  as  such  applicable  to  Union  action  to  address  the  challenges 
related to the self-employed on the basis of Article 352 TFEU. It was therefore on a voluntary 
basis that the Commission invited the social partners to share their views as regards the self-
employed.  

There was no agreement among social partners to enter into direct negotiations on any of the 
issues  raised  during  the  consultations  While  both  sides  broadly  agreed  with  the  challenges 
presented by the Commission during the consultations, they differ on the opportunity for EU 
action.  On  the  side  of  labour,  trade  unions  expressed  support  for  a  legislative action  setting 
minimum  standards  at  EU  level.  On  the  side  of  management,  representatives  of  employers 
have underlined that the action should be left to Member States, given their responsibility on 
the design of social security systems. During the second phase of the consultation, all social 
partners  agreed  on  higher  transparency.  Whereas  trade  unions  call  for  full  transferability, 
employers  would  like  to  limit  transferability  of  minimum  social  protection  rights  and 
according to them there should not be an additional burden or cost of transferability.  

All  trade  unions  favour  mandatory  formal  coverage,  equalised  to  those  of  standard  workers 
but  national  traditions  should  be  taken  into  account.  Employers  referred  to  subsidiarity  and 
expressed  different  views  on  the  options.  Some  agree  that  social  protection  should  be 
mandatory  but  employees  should  have  the  right  to  choose  the  form  of  coverage  (public  or 
private)  and  the  freedom  of  choice  for  the  self-employed  is  particularly  highlighted.  Other 
employers  favour  voluntary  formal  coverage  in  order  to  take  into  account  the  diversity  of 
forms of employment of the heterogeneity within the self-employed. 

The detailed outcomes of the consultation are presented in Annex 11.  

In  order  to  further  support  the  preparation  of  the  Commission's  initiative,  the  Commission 
launched an open public consultation on 20 November until 15 January 2018, available in all 
languages.  Targeted  hearings  with  representatives  of  the  self-employed,  social  insurance 
organisations  and  civil  society  and  the  Social  Protection  Committee  (composed  by 
representatives of Member States) were also organised in December 2017 (see also Annex 11 
for further details).  

3.3.  Subsidiarity: Necessity and value-added of EU action 

The problem of insufficient access to social security for a growing number of people in the 
labour market and its negative consequences on social cohesion, labour market dynamism and 
sustainable growth are wide-spread across Member States.  

In  principle  Member  States  could  take  measures  to  improve  the  situation  and  several  have 
indeed adopted reforms or are carrying national debates on the subject. In the Member States 

53 See Annex 11 for more details on the position of these institutions as well as on the overall results of relevance 
of the consultations relating to the European Pillar of Social Rights.  

 17 

 
 
 
 
                                                            
where reforms have been implemented, those reforms are steps in the right direction, but the 
evidence is that they are not comprehensive and systematic, i.e. they are not closing gaps in 
access for all groups and all branches of social security. Nor do current debates imply that all 
Member  States  necessarily  plan  to  take  action.  Individual  Member  States  may  hesitate  to 
regulate  in  this  area  on  their  own,  as  they  may  fear  that  such  action  could  put  their  own 
companies at a disadvantage relative to companies from other Member States. 

Action at EU level will support the implementation of principle 12 of the European Pillar of 
Social Rights so that all people in the labour market, regardless of their employment status, 
are protected against social risks such as unemployment or illness. Through a careful choice 
of the level of detail of the provisions, such EU action fully respects subsidiarity, irrespective 
of  the  specific  legal  instrument  chosen.  EU  action  can  be  a  springboard  for  further  national 
reforms and ensure that progress is not partial or uneven but is instead secured across groups, 
social  security  branches  and  Member  States,  creating  a  level  playing  field  for  economic 
agents in the internal market. The EU action can avoid short-term distortions of competition 
and  ensure  that  all  Member  States  move  in  the  same  direction  at  the  same  time  promoting 
upward  convergence,  to  the  benefit  the  EU  economy  as  a  whole.  In  this  respect,  it  is  also 
worth  noting  that  a  special  Eurobarometer  survey  on  the  Future  of  Europe  shows  strongly 
increasing  support  for  more  European  level  decision-making  dealing  with  health  and  social 
security issues54. 

EU action can also diminish the obstacles that the problem poses to the pursuit of the Union's 
objectives.  Differences  between  employment  statuses  in  access  to  social  security  can  be 
detrimental  the  EU's  fundamental  objective  of  promoting  full  employment  by  hampering 
occupational labour mobility including towards higher productivity sectors. It can discourage 
workers  from  undertaking  a  certain  type  of  employment  or  deter  people  from  taking  on  the 
risks  associated  with  self-employment,  which  thus  hinder  entrepreneurship  and  innovation. 
The problem can also be an obstacle to the achievement of the Union's objectives in relation 
to quality of jobs and poverty. 

By enhancing convergence towards robust labour market institutions and social infrastructure, 
EU action can facilitate resilience, social cohesion and macro-economic adjustment within the 
euro area and beyond. As highlighted in the Five Presidents' Report on Completing Europe's 
Economic  and  Monetary  Union55,  in  a  single  currency  area,  there  is  a  need  to  build  up  the 
shock absorption capacity and labour market adjustment mechanisms of Member States.  

4.  OBJECTIVES: WHAT IS TO BE ACHIEVED? 

4.1.  General objectives 

The general objective of the initiative "Access to social protection for workers and the self-
employed" is to support all people who, due to their employment statuses, are not sufficiently 
covered by social security schemes and thus are exposed to higher economic uncertainty.  

The  initiative  is  a  concrete  way  to  fulfil  the  EU's  objective  to  promote  social  justice  and 
protection,  as  stated  in  Article  3  of  the  Treaty  on  the  European  Union.  It  further  aims  at 
implementing principle 12 of the European Pillar of Social Rights that states that 'regardless 
of  the  type and  duration  of  their  employment  relationship,  workers,  and,  under  comparable 

54 Special Eurobarometer 451: The Future of Europe. Field work: October 2016. Publication: December 2016, available online.  
55  "Completing  Europe's  Economic  and  Monetary  Union",  Report  by  Jean-Claude  Juncker,  in  cooperation  with  Donald  Tusk,  Jeroen 
Dijsselbloem, Mario Draghi and Martin Schulz, June 2015 

 18 

 
 
 
 
                                                            
conditions, the self-employed have the right to adequate social protection'. It also contributes 
to the implementation of other Pillar principles such as those relating to "secure and adaptable 
employment", "unemployment benefits" and "old-age income and pensions".  

It  will  support  Member  States  in  adapting  social  security  to  present  and  future  changes  in 
labour markets. It will contribute to improving labour market dynamism by reducing labour 
market  asymmetries  in  social  security  obligations  and  rights  for  different  forms  of 
employment.  It  will  facilitate  transitions  between  jobs,  sectors  and  employment  status  by 
ensuring better preservation and transferability of acquired rights.  

Its ambition is to foster sustainable growth as well as increase fairness, competitiveness and 
social justice by improving adequate access to social security for those without it, including 
many  categories  of  people  in  non-standard  employment  and  the  self-employed,  thereby 
addressing long-standing and new gaps and inequities in access. At the same time, ensuring 
that  more people in  the labour  market contribute to  the financing of social security systems 
would  enhance  their  financial  sustainability,  contributing  to  intergenerational  fairness  and 
promoting social cohesion in the longer run.  

4.2.  Specific objectives 

In order to reach the previous general objective, the initiative will have the following specific 
objectives:  

-  Closing  formal  coverage  gaps:  ensuring  that  legislation  and  collective  agreement 
allow everyone in employment or self-employment to participate in the social security 
schemes.  

-  Addressing  the  problem  of  effective  and  adequate  coverage  and  facilitating 
transferability of social security rights: ensuring that rules governing contributions 
and  entitlements  ensure  the  adequacy  of  protection  and  do  not  limit  the  accrual  of 
entitlements  and  the  access  to  benefits  on  the  basis  of  employment  status  or  type  of 
employment  relationship  and  do  not  distort  the  playing  field  between  employment 
statuses  or  type  of  employment  relationship.  The  initiative  aims  at  preserving  social 
security  rights  when  workers  or  the  self-employed  change  jobs,  sectors  of  activity, 
type of employment relationship, or employment status. 

- 

Increasing transparency on corresponding systems and rights: ensuring access to 
user-friendly  information  on  rights  and  obligations  to  social  security,  irrespective  of 
the employment relationship or employment status. 

Formal coverage is a necessary, but not a sufficient condition to ensure adequate protection 
through  social  security  systems.  A  person  may  be  a  member  of  a  social  security  scheme 
without  de  facto  being  able  to  build  and  take  up  adequate  entitlements  to  benefits  and 
services,  notably  if  the  rules  governing  contributions  and  entitlements  disadvantage  some 
types  of  employment,  employment  statuses  or  career  history.  The  rules  should,  on  the 
contrary,  promote  social  justice  and  a  level  playing  field  between  employment  statuses  and 
types  of  employment  relationship.  Any  difference  between  employment  statuses  or  types  of 
employment  relationship  regarding  the  rules  governing  entitlements  should  reflect  the 
situation  of  beneficiaries  and  be  justified  by  policy  objectives.  This  objective  concerns  in 
particular  the  rules  governing  time  thresholds,  i.e.  minimum  qualifying  period,  minimum 

 19 

 
 
 
 
 
 
 
working  period,  waiting  period  and  the  duration  of  benefits.  It  also  concerns  the  rules 
determining the assessment of the income assessment base.  

If  a  person  changes  employment  status,  type  of  employment  or  economic  sectors  or  if  a 
person  combines  different  jobs,  the  transferability  and  preservation  of  rights  between  the 
scheme available under the new status and the previous scheme covering the same risk should 
be  facilitated.  The  preservation  of  rights  should  also  be  facilitated  for  persons  combining 
different  jobs  and/or  employment  status  at  the  same  time.  This  is  key  in  careers  that  are 
characterised by several job contracts and transitions. If rights are transferable, people will be 
more confident to make transitions, the labour market can be more dynamic and the allocation 
of resources more efficient.  

Even  when  they  have  formal  and  de  facto  coverage,  people  may  not  benefit  from  social 
security  if  they  do  not  have  sufficient  knowledge  about  their  rights.  If  the  rules  governing 
social  security schemes  are transparent  and if information  about individual entitlements  and 
obligations are easily accessible, individuals will be in a better positon to exercise their rights 
to social security.  

Although these objectives are valid across all branches of social security, the issues have been 
found  to  be  more  acute  in  the  branches  that  are  more  closely  related  to  employment  status, 
(unemployment  benefits;  sickness  benefits;  maternity  and  equivalent  paternity  benefits; 
invalidity benefits; old-age benefits; benefits in respect of accidents at work and occupational 
diseases). 

5.  WHAT ARE THE AVAILABLE POLICY MEASURES? 

5.1.  Baseline scenario 

Under  the  baseline  scenario  the  existing  coverage  gaps  in  social  security  would  continue  to 
exist  across  Member  States  and  can  be  expected  to  lead  to  insufficient  social  security 
coverage for an increasing number of citizens.  

On  the  one  hand,  external  drivers  like  globalisation,  transition  towards  a  service  economy, 
technological  developments,  demographic  ageing  outlined  in  section  2.2.1  are  expected  to 
persist.  They  will  continue  to  rapidly  change  the  European  labour  markets  and  make 
employment  opportunities  steadily  more  diverse.  This  implies  that  overall,  employment  on 
both old and new forms of non-standard contracts and in new forms of self-employment will 
likely  constitute  a  steadily  rising  share  of  job-opportunities  in  the  future.  If  observed  recent 
trends  continue,  the  share  of  traditional  non-standard  work  in  employment  could  rise  from 
25%  in  2016  to  29%  by  2030,  while  self-employed  would  remain  broadly  constant  at  4 % 
(14%  in  2016)56.  For  many  individuals,  most  notably  the  young  and  the  high-skilled,  new 
forms  of  employment  or  own-account  self-employment  will  represent  an  opportunity  to  be 
integrated in the labour market, expand choices and find a better work-life balance.  

On the other hand, several Member States have taken steps in the recent past (see also Annex 
7) to address some parts of the problem and change the internal drivers but overall progress is 
uneven across Member States, social security branches and targeted groups. Existing policies 
and  planned  reforms  appear  insufficient  to  prevent  gaps  in  formal  coverage,  effective 
coverage, transferability and transparency in the absence of further EU action. 

56 Source: Own calculations based on EU-LFS. 

 20 

 
 
 
 
                                                            
Over time an increasing share of the working population would thus be left without effective 
coverage under the baseline scenario. 

There are a few relevant initiatives at EU level which address parts of the problem, yet a more 
comprehensive approach is lacking. 
The  existing  EU  guidance  in  the  area  of  access  to  social  protection57,  particularly  in  the 
context of the European Semester and the Social Open Method of Coordination, will continue 
to  provide  recommendations  for  Member  States'  in  this  field.  These  efforts  have  yielded 
results in the past58 by reinforcing cooperation between Member States and helping identify 
common objectives, but it is less likely that they could trigger the needed accelerated changes 
to  social  security  systems  through  comprehensive  action  in  the  remaining  areas,  given  their 
general  nature  and  Member  States'  reservations  that  unilateral  steps  in  some  areas  would 
entail risks for their competitiveness.  

in 

With the European Pillar of Social Rights, Member States and the EU institutions politically 
committed to  strengthen the social  acquis and deliver more  effective rights  to  citizens. This 
political  commitment  should  encourage  Member  States'  actions  and  some  other  recent 
initiatives  taken  in  the  context  of  the  Pillar  can  be  expected  to  contribute  only  partially  to 
solving  the  problem  (see  below  e.g.  for  the  Commission's  proposal  for  a  Directive  on 
the  European  Union  regarding 
transparent  and  predictable  working  conditions 
transparency).  
Regarding  formal  and  effective  coverage,  the  Directive  2010/41/EU59  on  equal  treatment 
between men and women engaged in self-employed activity foresees the possibility to grant 
women (including spouses of the self-employed) the right to be entitled to maternity leave and 
benefits  for  at  least  14  weeks.  Since  this  Directive  leaves  to  Member  States  decision  if  the 
right to such benefits should be granted on a mandatory or voluntary basis, levels of benefits 
and  eligibility  conditions  vary  widely  among  Member  States.  An  independent  expert 
evaluation  concluded  that  the  Directive  was  unsuccessful  in  delivering  improved  maternity 
and  social  benefits  to  the  self-employed.60  The  Commission's  proposal  for  a  Directive  on 
Work-Life Balance for Parents and Carers61 provides for coverage by paternity and parental 
benefit  and  carers'  benefit  for  all  workers  with  an  employment  contract  or  relationship, 
including non-standard workers to whom the definition applies.    

Regarding transferability, there is no requirement in EU law to ensure the transferability of 
occupational  pension  rights  but 
the  portability  of 
supplementary  pension  rights  encourages  Member  States  to  improve  it  and  in  fact,  all 
Member  States  have  opted  to  extend  the  same  legal  treatment  to  all  workers  (the  Directive 
does not apply to self-employed persons) who leave an occupational pension scheme. 

the  Directive  2014/50/EU62  on 

57  Council  Recommendation  of  27  July  1992  on  the  convergence  of  social  protection  objectives  and  policies  (92/442/EEC),  OJ  L  245, 
26.8.1992, p. 49–52, Commission Recommendation of 3 October 2008 on the active inclusion of people excluded from the labour market 
(C(2008)  5737),  OJ  L  307,  18.11.2008,  p.  11–14,  Commission  Communication  Towards  Social  Investment  for  Growth  and  Cohesion  – 
including implementing the European Social Fund 2014-2020, COM (2013)83, A renewed commitment to social Europe: Reinforcing the 
Open  Method  of  Coordination  for  Social  Protection  and  Social  Inclusion’,  COM(2008)  418  final,  Council  Decision  (EU)  2015/1848  of 5 
October  2015  on  guidelines  for  the  employment  policies  of  the  Member  States  for  2015,  OJ  L  268,  15.10.2015,  Country-specific 
recommendations. 
58 See Annex 7 for a review of reforms undertaken by Member States and Annex 8 for an overview of relevant EU level instruments. 
59 Available online. 
60 Barnard C. and Blackham A. (2015), The implementation of Directive 2010/41 on the application of the principle of equal treatment 
between men and women engaged in an activity in a self-employed capacity, report of the European network of legal experts in the field of 
gender equality, commissioned by the Directorate-General Justice of the European Commissioned 
61 COM(2017)253/884003. 
62 See Annex 8 for more details.  

 21 

 
 
 
                                                            
Moreover,  several  recent  EU  initiatives  will  contribute  to  addressing  the  problem  of 
transparency.  First,  this  concerns  old-age  benefits  in  the  context  of  occupational  pensions. 
This  will  be  addressed  by  the  Directive  on  minimum  requirements  for  enhancing  worker 
mobility  between  Member  States  by  improving  the  acquisition  and  preservation  of 
supplementary  pension  rights63  (Portability  directive)  and  by  the  recast  Directive  on  the 
activities  and  supervision  of  institutions  for  occupational  retirement  provision  (IORP 
directive)64.  Both  directives  improve  the  provision  of  information  on  the  pension  schemes. 
The  Portability  directive  also  covers  the  protection  of  pension  rights  upon  termination  of 
employment65. The two directives should be transposed into national law by 21 May 2018 and 
13 January 2019 respectively. 

Second, the lack of transparency for other social security areas for workers will be partially 
addressed  by  the  Commission's  proposal  for  a  Directive  on  transparent  and  predictable 
working conditions in the European Union66, but not for the self-employed. According to the 
proposal,  workers  will  receive  information  on  the  social  security  institution(s)  receiving  the 
social  contributions  attached  to  the  employment  relationship  and  any  protection  relating  to 
social security provided by the employer. 

This legislative proposal also allows clarifying the boundaries between workers and self-
employed bringing clarity on where the status of self-employed is unduly used (bogus self-
employment).  In  relation  to  access  to  social  security,  such  clarity  helps  ensure  that  those 
people erroneously considered self-employed can now have access to the available protection 
as workers (which is generally higher). However the personal and material scope of the two 
initiatives  is  different  as  the  proposed  directive  does  not  cover  the  self-employed.  Also,  the 
proposed directive does not determine whether workers should have access to social security. 
It limits itself to secure that information on acquired rights is available to employees. 

It could be argued that even without public intervention at EU or Member State level, the set-
up  of  effective,  efficient  and  accessible  –  in  terms  of  prices/premiums  -  social  security 
systems  by  social  partners  or  professional  organisation  may  solve  the  identified  access 
problems.  However,  it  is  unlikely  that  such  initiatives  would  lead  to  a  comprehensive 
solution. Occupational schemes for pensions are indeed wide-spread in a number of Member 
States (including BE, DE, DK, FR, IE, NL, SE, SI and the UK), occupational funds may also 
play an important role in health insurance (e.g. IT)67 and social partners may be involved in 
unemployment  insurance  schemes  (e.g.  DK,  FR).  However,  there  is  no  evidence  of  a  trend 
increase  in  such  schemes  despite  the  existing  problems.  The  challenges  that  have  to  be 
overcome  are  among  others  the  need  to  mobilise  a  sufficient  number  of  members  to  pool 
risks,  while  there  has  been  a  general  decline  in  most  Member  States  in  the  organisation  of 
workers in trade unions and in trade union density. 

Summing  up,  it  is  unlikely  that  the  problem  of  insufficient  access  to  social  security  will  be 
comprehensively addressed by Member State action only with the support of the existing EU 

63 Directive 2014/50/EU of the European Parliament and of the Council of 16 April 2014 on minimum requirements for enhancing worker 
mobility between Member States by improving the acquisition and preservation of supplementary pension rights. Article 6 requires Member 
States  to  ensure  that  active  scheme  members  can  obtain,  on  request,  information  on  how  a  termination  of  employment  would  affect  their 
supplementary pension rights.  
64  Directive  (EU)  2016/2341  of  the  European  Parliament  and  of  the  Council  of  14  December  2016  on  the  activities  and  supervision  of 
institutions for occupational retirement provision (IORPs).  
65 Article 37 (1,j) of Directive 2016/2341 on general information on the pension scheme has provision on transferability. In case a member 
has the right to transfer pension rights, further information about the arrangements relating to such a transfer must be provided.. 
66 COM(2017) 797 final, available online 
67 ESPN (2017) synthesis report p. 33.  

 22 

 
 
 
                                                            
initiatives. As a consequence, it can be expected that the share of people in the EU who do not 
have access to social security will increase significantly under the baseline scenario. 

5.2.  Measures discarded at an early stage 

When considering the policy measures, a number of approaches have been discarded:  

Labour inspections: A non-legislative option to improve formal coverage that was discarded 
is  increasing  and  improving  labour  inspections.  Doing  so  could  reduce  the  incentives  of 
companies to replace employees with independent contractors not covered by social security 
who  are  in  reality  disguised  employees  to  reduce  the  cost  of  labour68.  However,  that  could 
potentially solve only a small part of the problem of lack of formal coverage and not solve the 
problem of lack of coverage for the majority of the self-employed69.  

Universal basic income: In the face of rising non-standard employment and self-employment, 
one  popular  option  could  be  delinking  social  insurance  from  employment  by  providing  a 
universal social assistance benefit regardless of income, contribution history and employment 
status.  Firstly,  the  focus  of  the  current  analysis  is  on  the  effects  of  employment  status  or 
contract type on the available protection through social security schemes. Coverage by social 
assistance and similar schemes is primarily based on criteria regarding residence and income, 
and thus they are out of the scope of the current initiative. Secondly, while this option may be 
feasible  for  countries  that  are  in  the  process  of  setting  up  their  social  protection  system,  it 
seems  to  be  more  difficult  to  implement  in  countries  that  have  already  a  well-established 
welfare system (as is the case for the EU Member States)70 due primarily to strongly rooted 
traditions  and  preferences,  the  significant  cost  of  switching  from  the  old  to  the  new  model, 
and the extra cost associated with providing a comparably adequate protection for all71. Such 
an  option  would  therefore  very  likely  fail  to  garner  the  necessary  political  support  for 
adoption  and/or  implementation.  Therefore,  the  problem  of  insufficient  access  to  social 
security  is  best  addressed  in  the  framework  of  the  existing  social  security  systems  in  the 
Member States.  

Individual protection arrangements outside social security schemes: One option mentioned 
by stakeholders  would be to  restrict legislative action to  demanding that  all  groups, notably 
including  the  self-employed, prove having  some form of protection or insurance against the 
risks covered by social security systems, leaving to them the choice whether to arrange this 
via social  security schemes  or  through purely  individual  private arrangements. First,  private 
purely market-based arrangements are not available regarding all the risks under consideration 
(e.g.  regarding  unemployment),  Second,  where  they  exist,  the  solidarity  manifested  in 
collective  schemes  could  be  undermined,  including  by  significant  self-selection72  where  the 
financial 
corresponding  potentially  substantial  costs  could  possibly  weaken 

their 

68 An increase in the gap between the level of employees and self-employed contributions by one percentage point increases the likelihood of 
being  a  solo  self-employed  by  2.4%  (slightly  less  for  women,  those  in  manufacturing  electricity  and  wholesale)  according  to  the  Labour 
Market and Wage Developments in Europe 2017. 
69 Eurofound (2017), "Exploring self-employment in the European Union", Publications Office of the European Union, Luxembourg.  
70 Digital dividends, World Development Report 2016. Nevertheless, there are still some  EU Member  States (Bulgaria, Estonia, Hungary, 
Latvia, Lithuania and Spain) for which addressing shortcomings in the coverage and adequacy of minimum income schemes remains high on 
the  policy  agenda according  to  the  2017  Country-Specific  Recommendations  (CSRs) (Labour Market  and  Wage  Developments  in  Europe 
2017). 
71  Basic  income  as  a  policy  option:  Technical  Background  Note  Illustrating  costs  and  distributional  implications  for  selected  countries, 
OECD, 2017. 
72  Whereby  they  would  presumably  attract  mainly  the  "bad"  risks,  whereas  individuals  with  low  risk  characteristics  would  be  better  off 
buying private insurance.  

 23 

 
 
 
 
                                                            
sustainability.  Possible  measures  and  options  therefore  refer  only  to  social  protection 
concluded through an employment relationship which is coherent with the EU approach used 
in the Directive 2014/50/EU and Directive 2006/54/EC.  

Benefits  in  kind:  While  benefits  in  kind  account  form  an  important  part  of  the  protection 
offered through some branches of social security, notably including health care, they are out 
of the scope of the current initiative. Regarding healthcare, an initial mapping did not provide 
sufficient  evidence  of  significant  differences  in  access  related  to  labour  market  status. 
Similarly  for  other  areas  where  benefits  in  kind  are  of  key  importance,  the  labour  market 
situation is not expected to play a key role for access.  

5.3.  Description of the policy measures  

The  objective  to  improve  access  to  social  security  can  be  achieved  by  a  combination  of 
measures relating to three areas: 

  Closing formal coverage gaps: 

 

 Addressing the problem of effective coverage and facilitating transferability of social 
security rights  

 

Increasing transparency on corresponding systems and rights  

The first dimension allows people to be member of relevant social security schemes. It is thus 
a  prerequisite  for  the  second  dimension.  We  discuss  measures  for  each  of  these  areas.  The 
policy measures retained are those that provide the alternatives that are most feasible (legally, 
technically  and  politically),  coherent  with  other  EU  instruments,  effective,  relevant  and 
proportional  to  tackle  the  problem  drivers  detected  in  section  2.  In  section  6.1,  option 
packages will be built from the individual measures regarding the defined specific objectives. 

As  explained  in  Section  2.2.2,  the  personal  scope  (same  or  different  measures  to  apply  for 
workers  and  self-employed)  considered  across  policy  measures  and  options  will  be  left 
general enough to allow the initiative to take into account new forms of work that could arise 
in the future. In terms of material scope, the measures would apply to the branches of social 
security which have been identified as most relevant of the Commission's initiative, namely 
unemployment  benefits;  sickness  benefits;  maternity  and  equivalent  paternity  benefits; 
invalidity  benefits;  old-age  benefits  as  well  as  benefits  in  respect  of  accidents  at  work  and 
occupational diseases. 

The measures aim at eliminating or reducing obstacles which impair social security systems 
from providing people with adequate protection regardless of their employment status, while 
respecting Member States’ competences in design their social security systems.  

Dimensions of the policy options left to Member States’ discretion in view of subsidiarity and 
proportionality  and  in  respect  of  article  153(4)  TFEU  include  i)  the  level  of  protection 
provided,  ii)  whether  to  extend  coverage  under  existing  schemes  or  by  the  creation  of  new 
schemes, iii) the way to finance the protection, which includes important design issues such as 
how to address the split of social contributions between employees and employers in the case 
of  the  self-employed  and  iv)  combinations  of  schemes  to  be  used  (public,  occupational  or 
private). These issues are beyond the scope of the current initiative. Member States are best 
placed to decide about these dimensions in ensuring effective protection in the most efficient 
way given the diversity of existing social security systems across the Member. 

 24 

 
 
 
 
5.3.1.  Measures to extend formal coverage   

Formal coverage can be addressed by granting access to social security schemes to previously 
excluded groups on a mandatory or voluntary basis. These alternatives may reflect different 
levels of ambition and may strongly influence the number of additional people that would be 
covered by social security as a result of this initiative.  

i)  mandatory  coverage:  extending  coverage  to  groups  of  people  previously  excluded  by 
virtue of their  employment  status or contract type73 but also reviewing minimum income 
levels  below  which  individuals  in  some  Member  States  currently  do  not  have  access  or 
only have access on a voluntary basis regarding certain branches of social security.  

ii) voluntary coverage: previously uncovered groups would have the possibility to have join 
social security schemes, but the final decision on whether to use this option would be left 
to the individual.  

The  approach  to  coverage  could  be  the  same  (either  mandatory  or  voluntary)  for all  groups 
without  access  to  social  security  (i.e.  non-standard  workers  and  self-employed)  or  could  be 
differentiated  between  non-standard  workers  (mandatory  coverage)  and  self-employed 
(voluntary)  to  reflect  the  differences  of  both  groups  regarding  the  allocation  of  risks, 
discretion over their work, decision-making power, financial autonomy and responsibility.  

Combinations  of  the  two  alternatives  could  also  be  considered.  Decisions  on  coverage 
could  be  linked  to  decisions  on  the  level  of  protection  (which  is  to  be  decided  by  Member 
States).  In  particular,  a  basic  level  of  protection  can  be  mandated  and  supplemented  with 
additional  coverage  on  a  voluntary  basis74.  Such  calibration  of  the  mandatory  element  can 
also  be  motivated  by  the  observation  that  uncovered  individuals  in  most  Member  States  do 
have access to non-contributory safety nets of last resort. Mandating a basic level of coverage 
close to the one provided by basic safety nets can thus also contribute to avoiding free riding 
behaviour of uncovered individuals and the corresponding costs to public budgets. Decisions 
on additional coverage, which are not associated with the same possible externality, are left to 
the individual75.    

In their replies to the second phase social partners' consultation (see also Annex 11), all trade 
unions favour mandatory formal coverage, equalised to those of standard workers but national 
traditions should be taken into account. Employers expressed different views on these options. 
Some agree that social protection should be mandatory but employees should have the right to 
choose the form of coverage (public or private) and they highlighted in particular the freedom 
of choice for the self-employed. Others favour voluntary formal coverage in order to take into 
account the diversity of forms of employment of the heterogeneity within the self-employed. 
Many employers referred to subsidiarity that should prevail. 

Regarding  the  open  public  consultation,  around  2/3  of  the  respondents  consider  that  social 
protection  rights  and  obligations  should  be  mandatory  for  every  kind  of  job,  irrespective  of 

73 It is proposed to exclude the following groups :Family workers, for whom granting access in terms of obligations and benefits seems 
unfeasible in view of the unpaid nature of their work, and, farmers.  
74 This is the case for instance in the two-tiered unemployment insurance scheme in Sweden. A universal flat-rate benefit is provided by the 
state. Coverage by state-subsidised earnings-related compensation going beyond this minimum level is optional.  
75  According  to  the  ILO75,  voluntary  coverage  may  be  considered  a  suitable  supplement  to  mandatory  schemes  in  ensuring  effective 
protection and the global social efficiency of national systems only when the following conditions are fulfilled: i) they are controlled by the 
State  or  managed  by  representatives  of  the  social  partners;  ii)  also  applicable  to  low-income  workers  and  iii)  meeting  to  the  general 
requirements  of  compulsory  social  insurance  schemes  (inter  alia  collective  financing,  periodicity  and  predictability  of  benefits,  legal 
protection, financial guarantees etc.). 

 25 

 
 
 
  
                                                            
the type of contract. Only a small share of respondents think that social protection rights and 
obligations should be voluntary (5.9 % for non-standard work and 10.1 % for self-employed). 

5.3.2.  Measures to promote effective coverage and transferability  

Measures  to  address  problems  of  effective  coverage  relate  to  the  rules  governing  time 
thresholds  (minimum  qualifying  periods,  the  minimum  working  periods,  waiting  periods76) 
and  to  rules  governing  transferability.  The  latter  concerns  the  two  cases  outlined  earlier  in 
Section  2.2.2:  i)  the  build-up  of  entitlements  over  the  course  of  a  career  characterised  by 
transitions;  ii)  the  preservation  and  transfer  of  entitlements  from  one  scheme  to  a  new  one 
where there are minimum time thresholds to be respected. 

During  the  second  phase  social  partners  consultation,  views  on  effective  coverage  and 
transferability  were  mixed.  Trade  unions  called  for  guaranteeing  full  portability  by  tying 
social protection entitlements to individuals through an equalised calculation and aggregation 
but  without  leading  to  an  individualisation  of  social  protection.  On  the  other  hand,  some 
employers  agree  with  the  principle  of  transferability  of  rights  but  call  for  an  impact 
assessment before creating legally binding realities or argue that subsidiarity prevails and that 
a mapping of existing transferable systems should be favoured. Others recommend the EU to 
limit  itself  to  general  provisions  or  would  like  to  limit  transferability  to  minimum  social 
protection rights. The administrative cost of transferability should be kept at a minimum and 
no  additional  costs  for  the  new  employer  to  take  on  the  provision  of  the  transferred  rights 
should occur. 

Rules governing time thresholds 

In schemes where minimum qualifying periods, minimum working periods, or waiting periods 
exist  and  are  stricter  for  non-standard  workers  and  the  self-employed  than  for  standard 
employees,  or  are  the  same  as  for  standard  employees,  it  can  be  more  difficult  for  the  two 
groups  to  fulfil  them.  Policy  measures  can  adjust  the  minimum  periods,  so  they  are  not 
longer than justified by policy objectives, including avoiding abuse.77  

Time  thresholds  make  the  conditions  for  take-up  of  benefits  more  stringent  and  are  used  to 
minimise abuse, protecting the interest of the members of the scheme. The total elimination of 
time  thresholds  is  therefore  unrealistic  because  it  would  eliminate  all  disincentives  to  abuse 
embedded in the system. This hypothesis is therefore disregarded in our analysis below.  

Modifications  regarding  qualifying  periods,  minimum  working  periods  and  waiting  periods 
could  be  made  for  all  insured  people.  Alternatively,  they  could  be  adjusted  only  for  non-
standard  workers  and/or  the  self-employed  in  the  specific  cases  where  the  time  thresholds 
have been identified as obstacles to reach the same social protection outcomes for everyone.  

76 For definitions refer to Annex 2. 
77 This qualification is important as these features may play an important role for ensuring the incentive compatibility of social security 
systems, see Box A.4 in Annex 6 for a discussion.  

 26 

 
 
 
 
 
 
 
 
                                                            
Rules governing transferability  

i) Ensuring preservation, transferability and aggregation 

Preservation of entitlements can support the build-up of entitlements over the course of a 
career  where  transferring  is  not  possible  (because  for  instance  the  person  will  not  have 
coverage  by  another  scheme  after  changing  job  or  sector  or  employment  status78).  The 
method of preservation may vary depending on the nature of the scheme. For instance, the 
value of pension rights may be adjusted in accordance with: inflation rate or salary levels 
(typically  in  a  defined  benefit  scheme);  return  from  investments  derived  by  the  scheme 
(typically  in  a  defined  contribution  scheme).  Preservation  of  entitlements  can  also  mean 
that individuals also have the possibility of continue contributing to the former scheme79.  

In  cases  where  transferability  is  possible,  then  mandatory  transferability  ensures  that  all 
workers  or  self-employed  leaving  a  scheme  have  the  possibility  to  take  their  acquired 
rights  with  them.  Conditions  should  also  be  set  so  that  this  transfer  does  not  reduce 
substantially the entitlements (for instance due to unfavourable calculation of the transfer 
value or high administrative costs). 

Aggregation  of  contributions  period  records  within  a  given  social  security  branch  can 
support  smooth  transitions  in  the  labour  market.  This  implies  that  the  past  periods  of 
employment  or  self-employment  prior  to  changing  employment  status  are  taken  into 
account as if the periods were completed in the current status80. Such aggregation should 
be made possible up to a limit justified by policy objectives, bearing in mind the need to 
preserve incentives for the functioning of the system. 

ii) Personal social security accounts 

This  refers  to  disconnecting  rights  to  protection  through  social  security  systems  from 
professional status and connecting them to individuals, thereby providing better protection 
for  people  who  change  employers,  jobs,  sectors,  employment  status  and  even  countries. 
Personal accounts can be set on the basis of existing schemes with a high coordination at 
national  level  among  providers  of  all  existing  schemes  or  can  be  triggered  through  a 
fundamental revision of the social security system, implying a major reform effort to scale 
down  the  number  of  schemes  related  to  specific  employment  statuses  and  occupational 
categories  and  to  'homogenize'  their  rules.  Currently,  only  Ireland  and  Latvia  have 
implemented personal accounts, while France is working to introduce them in its system81.  

78 For instance, in the area of occupational pensions Member States are encouraged to extend the standards of Directive 2014/50/EU to self-
employed people who change jobs within the country: When leaving a pension scheme, a person is entitled to keep his vested pension rights 
in  the  scheme,  unless  he  agrees  to  receive  them  as  a  capital  payment.  The  pension  rights  of  the  former  member  must  be  preserved  fairly 
compared to the rights of current members. 
79 This is for instance the case in the Netherlands regarding occupational old-age pensions for former employees that become self-employed  
80 For instance, in Luxemburg, the self-employed must have completed at least two years of compulsory insurance as a self-employed person 
to qualify for unemployment benefits. However for the purpose of calculating this qualifying period, periods of insurance completed as an 
employed person can be aggregated provided the person has carried out activities as a self-employed person for at least six months before the 
submission of the request for compensation. See: ESPN (2017). 
81 The success and the aim of those personal accounts differ among those countries: in Latvia there are problems in terms of redistribution, 
which is let at the minimum while in Ireland, major critiques have been in terms of privacy violation. 

 27 

 
 
 
 
 
 
 
                                                            
5.3.3. 

Increasing transparency on social security rights and obligations 

During the second phase social partners' consultation, all social partners agreed with the need 
for  higher  transparency  but  they  did  not  provide  specific  suggestions  how  this  could  be 
achieved. 

Regarding  measures  to  increase  transparency,  they  could  explicitly  define  what  type  of 
information  would  have  to  be  provided,  whether  generic  and/or  personalised.  In  both  cases 
they are expected to be free-of charge for the beneficiary. 

i)  Generic  information  on  rights  and  obligations  (broken  down  by  employment  status  and 
contract  type)  could  be  provided,  where  not  already  done82,  for  instance  via  dedicated 
webpages relative to each relevant social security branch. The information provided should 
cover differences regarding the relevant groups, notably as regards standard employees vs. 
relevant  categories  of  non-standard  employees  and  the  self-employed.  The  information 
should be easy to access and understand, and updated on a regular basis.  

ii)  Personalised  information  could  be  provided  to  individuals  of  their  rights  through 
dedicated webpages that could offer the possibility to calculate benefits (simulation tools) 
based on input on personal information such as income and employment situation. Other 
means to provide such personalised information would be via personal accounts where the 
personal  information  such  as  income  and  employment  is  already  available  and  the 
calculation  of  benefits  does  not  require  any  specific  knowledge  by  the  individual. 
Dedicated tools should be easy to find and use. 

5.4.  Impacts of the policy measures  
The assessment of impacts of policy measures83 covers how the measures are likely to meet 
the defined objectives (effectiveness) and the key types of impacts, including economic and 
social impacts as well as those on national authorities. No environmental impact nor impact 
on fundamental rights has been identified.  

The  assessment  of  impacts  combines  qualitative  arguments  with  quantitative  results  to  the 
extent  possible.  A  number  of  limitations  need  to  be  highlighted  (see  Annex  9  for  other 
methodological considerations).  

Firstly, the wide scope of the initiative addressing simultaneously different branches of social 
security  in  conjunction  with  the  limitations  in  data  available  seriously  constrains  the 
possibility  to  provide  a  comprehensive  picture.  Available  data  only  allow  quantifications 
regarding some social security branches, and simulations are limited to the self-employed for 
the  same  reason.  Furthermore  there  exists  a  certain  asymmetry  regarding  the  possibility  to 
quantify costs versus – partially non-monetary – benefits. For instance, the positive impacts of 
reduced  insecurity  are  hard  to  quantify,  and  neither  do  models  allow  combining  micro-
economic  benefits  of  increased  social  security  coverage  with  the  more  macroeconomic 
benefits  of  stronger  economic  stabilisation  over  the  business  cycle  or  potentially  increased 
labour market transitions and dynamism. 

82 See Annex 6 table A.10 and box A.8 for more details.  
83 The joint impacts of possible policy packages will be explored in Chapter 6.2.  

 28 

 
 
 
 
 
                                                            
Secondly,  as  explained  earlier,  subsidiarity  implies  that  a  number  of  key  policy  choices  on 
how to improve access to social security are left to Member States, including decisions on the 
level of protection embodied in nations' social security systems, financing choices as well as 
the  type  of  schemes  through  which  coverage  is  provided.  These  choices  fundamentally 
determine  the  qualitative  and  quantitative  impacts  that  can  be  expected,  impeding  a  more 
general or comprehensive illustration in this analysis. 

Finally the evolving nature of the problem, as the rapid and fundamental changes in the labour 
market in the context of the new world of work described above, may also imply changes in 
the  impacts.  At  the  same  time,  it  should  also  be  noted  that  the  choice  of  (non-binding  vs. 
binding)  legal  instrument  (see  Chapter  8)  may  influence  the  degree  of  certainty  with  which 
the impacts materialise. The assessment of impacts is thus conditional on action being taken 
in response to the Initiative and could thus be regarded as an upper bound in this respect in 
case of a non-binding legal instrument.   

5.4.1. 

Impacts of the measures extending formal coverage  

Effectiveness 
Mandatory coverage has a very high effectiveness as, by definition, it implies coverage for all 
previously  excluded.  Mandatory  coverage  is  a  key  means  to  implement  the  principle  of 
solidarity,  enabling  also  the  most  vulnerable  categories  to  have  access  to  social  security 
schemes84.  Moreover,  mandatory  coverage  below  a  minimum  level  of  benefit  entitlement  - 
corresponding to the one available from social safety nets - , can be justified by a need to limit 
that people would fall back non-contributory social safety nets. 

Voluntary coverage can have a good effectiveness. Based on available evidence on enrolment 
in  voluntary systems85 it can  be expected  that a  significant  number of people would choose 
not  to  have  coverage.  At  the  same  time,  such  an  approach  would  respect  the  freedom  of 
choice  and  reflects  the  heterogeneity  of  the  self-employed,  which  were  highlighted  by  key 
stakeholders during the consultation.  

Choices on the financing of schemes - in the remit of Member States - can impact the degree 
of  effectiveness,  especially  when  access  is  granted  on  a  voluntary  basis.  Indeed  the  way 
financing  is  set  up  can  entail  powerful  (dis)incentives  to  participate.  There  are  trade-offs 
between  encouraging  higher  participation  through  public  subsidies  and  public  finance 
considerations.  Financing  also  affects  the  degree  of  redistribution  of  income  through  the 
social  security  systems.  For  a  given  rate  of  contribution,  incentives  to  enrol  are  higher  for 
people who face the largest corresponding risks and are therefore most likely to benefit from 
the  system,  i.e.  also  generate  a  higher  cost  for  it.  Subsidies  have  successfully  been  used  in 
some  Member  States  to  encourage  broader  membership  and  thereby  reduce  problems  of 
adverse selection; however, such measures may also entail significant costs86. Alternatively, 
Member  States  could  compel  providers  of  social  security  schemes  to  offer  their  members 

84 The principle of solidarity justifies the existence of social security schemes in  addition to individual protection measures (Gruat (1998): 
Adequacy  and  social  security  principles  in  pension  reform,  Ageing  working  papers,  Maintaining  Prosperity  In  An  Ageing  Society:  the 
OECD study on the policy implications of ageing, Working paper AWP 3.1. Available online). 
85 See Annex 10, Section 1 for a discussion. 
86 See e.g. Landais et al (2017): Risk-Based Selection in Unemployment Insurance: Evidence and Implications, CEPR Discussion Paper No. 
DP12364. 

 29 

 
 
 
 
 
                                                            
identical obligatory benefits which do not depend on the amount of the contributions and by 
equalising risks and costs between different funds.  

Where individuals are enrolled by default and need to take action to leave the system (through 
opt-out  clauses),  usually  leads  to  higher  coverage  than  opt-in  measures  (see  Annex  10, 
Section 1). 

Direct costs and other economic impacts 
The direct cost of providing formal coverage depends on the number of people newly covered 
and the per-capita cost of coverage. The first and likely dominant component is clearly higher 
under mandatory coverage than under voluntary coverage, as not everyone will choose to be 
covered under the latter option. Differences in the per capita cost of coverage may arise due to 
problems of adverse selection, i.e. self-selection, under voluntary access. Resulting budgetary 
costs could be accompanied by savings from lower expenditure for social assistance and other 
safety nets that previously uncovered individuals would fall back on.  
In addition to self-selection effects, moral hazard87 could also influence the cost of extending 
coverage, notably regarding unemployment insurance for the self-employed, who have more 
control over the relevant risk than employees do in an employment relationship. While this is 
correct, the successful establishment of social security schemes protecting the self-employed 
in  case  of  unemployment  in  the  majority  of  Member  States  (the  mapping  in  Chapter  2.2.2 
only  established  corresponding  formal  coverage  gaps  in  nine  Member  States)  implies  the 
potential  for  learning  from  peers  about  the  necessary  control  mechanisms  and  rules  which 
minimise this kind  of behaviour.  A recent study of the Danish  unemployment insurance  for 
the self-employed indeed finds a limited risk of moral hazard88.  
Regarding  formal  coverage  of  the  self-employed,  simulations89  (see  also  Annex  10  for  all 
details) were undertaken for the extension of existing schemes of unemployment benefits for 
employees to the self-employed under the same rules in five Member States90. Results suggest 
that  the  cost  of  extending  coverage  in  terms  of  the  corresponding  total  expenditure  for 
benefits could be in a range from below 0.1% to 0.4% of GDP annually, depending inter alia 
on the number of self-employed in the country, the unemployment risk they face, as well as 
on the generosity of the system in place. Comparing the simulated cost of a similarly generous 
unemployment  insurance  system  for  the  self-employed  across  all  Member  States  results  in 
similar limited costs, albeit with higher cross-country variation.  

Expressing the costs as a share of gross labour income of the self-employed, to be interpreted 
as contribution rates to be paid by them in a revenue-neutral scenario, results in contribution 
rates  between  less  than  0.1%  and  up  to  1.7%  of  gross  labour  income,  in  line  or  lower  than 
contribution rates observed in many existing systems in Member States. Simulating costs for 

87 This refers to the risk that once covered by insurance for a specific risk, the insurance taker modifies his behaviour in a way that makes the 
materialisation of the risk more likely, increasing the cost for the insurance provider.  
88 The study finds that self-employed men in Denmark who are covered by unemployment insurance are more likely to become unemployed 
than those who are not covered. But any increased risk of the failure of their businesses that is created by the safety net of insurance is small 
compared with the overall risk of business failure; the bulk of the difference between the covered and the uncovered group is not related to 
differences in behaviour but to heterogeneity or sorting. See M. Ejrnæs and S. Hochguertel (2013), Is Business Failure Due to Lack of 
Effort? Evidence from a Large Administrative Sample’, Economic Journal. 123, no. 571, pp. 791-830 for details.  
89 The simulations do not consider second-round effects resulting from changes in behaviour resulting from the extension of coverage and 
should therefore be considered conservative 
90 The simulations can thus be regarded as relating to a mandatory approach as all self-employed fulfilling the relevant eligibility conditions 
are covered; in this sense, the simulations provide an upper bound of the impacts. 

 30 

 
 
 
 
                                                            
extending  sickness  benefits  also  results  in  limited  costs  in  most  Member  States,  with  a 
significant degree of cross-country variation. 

At  the  same  time,  depending  on  Member  States'  financing  decisions,  extending  formal 
coverage can also avoid that the financing base of social security systems is skewed because 
an increasing group of people on the labour market is outside the system and does therefore 
not pay contributions.  

Similarly, other choices about the nature of schemes may have implications for their cost. For 
instance,  under  voluntary  coverage  giving  a  choice  between  possibly  more  redistributive 
public and more individualised occupational schemes may be costly for the public scheme due 
to self-selection issues. The creation of new, separate schemes specifically designed for those 
not currently covered can weaken the solidarity ties between the insiders (in the old schemes) 
and outsiders (in the new schemes).   

At  the  macro  level,  benefits  (not  simulated)  from  the  extension  of  coverage  can  also  be 
expected  by  strengthening  the  well-established  key  role  of  automatic  stabilisers  of  public 
social insurance schemes', dampening business cycle fluctuations91. These help limit the loss 
of  economic  efficiency  resulting  from  volatility  in  the  economy,  contributing  to  enhanced 
economic performance to the extent that large output fluctuations can, notably in the absence 
of wage flexibility, result in a trend increase in unemployment (hysteresis effects) and erode 
human capital.  

A noticeable reduction in unfair competition between firms employing staff on non-standard 
contracts  exempted  from social security contributions and competitors not  reducing costs in 
this manner could be expected from the extension of formal coverage. Such effects would be 
very pronounced under mandatory formal coverage for all groups while a voluntary approach 
would reduce but not eliminate possibilities for such arbitrage via contract forms.  

A  differentiated  approach  extending  coverage  on  a  mandatory  basis  to  non-standard 
employees  and  on  a  voluntary  basis  to  the  self-employed  could  incentivise  a  movement 
towards  the  latter.  In  this  respect,  it  is  important  to  note  that  the  enforcement  would  be 
facilitated  by  the  recent  proposal  for  a  Directive  on  transparent  and  predictable  working 
conditions, which allows to clarify the boundaries between workers and self-employed brings 
clarity  on  where  the  status  of  self-employed  is  unduly  used  (bogus  self-employment).  In 
relation to access to social security, such clarity will help ensure that those people erroneously 
considered self-employed can now have access to social security as workers. 

Depending  on  financing  decisions  taken  by  Member  States,  an  increase  in  labour  cost 
associated with the extension of coverage could lead to a reduction in labour demand for the 
concerned  groups,  while  work  incentives  for  people  paying  contribution  rates  can  also  be 
reduced. In conjunction, both effects could imply a reduction in employment.  

Finally, positive effects on labour market dynamism of removing the lack of social security 
coverage  as  an  obstacle  to  transitions  between  self-employment,  non-standard  employment 

91 Looking at the recent economic crisis, the importance of automatic stabilizers and in particular of social protection systems in this regard 
has been highlighted by recent research: "Social transfers, in particular the rather generous systems of unemployment insurance in Europe, 
play a key role for the stabilization of disposable incomes and explain a large part of the difference in automatic stabilizers between Europe 
and the US", see M. Dolls, C. Fuest and A. Peichl (2010), Social Protection as an Automatic Stabilizer, IZA Policy Paper No. 18 September 
2010, as well as M. Dolls, C. Fuest and A. Peichl (2012), Automatic stabilizers and economic crisis: US vs. Europe. Journal of Public 
Economics 96(3), pp. 279.294. 

 31 

 
 
 
                                                            
and standard employment could reasonably be expected. Labour market segmentation would 
be reduced.  

Social impacts 
Key  expected  impacts  stemming  from  the  improved  protection  would  be  an  increase  in  the 
mutualisation of risk, increase of income security resulting in less precariousness and poverty. 
Given the higher level of effectiveness of mandatory coverage, this approach is also expected 
to bring higher social impacts. 

The  above-mentioned  simulations  regarding  unemployment  insurance  show  that  there  are 
noticeable  reductions  in  the  risk-of-poverty  for  the  previously  uncovered  group  of  self-
employed (for more details, see Annex 10). Coverage reduces the poverty risk among all self-
employed noticeably (by up to 13 pps in the simulations) and softens especially the impact of 
job  loss  on  poverty  at  household  level  (by  up  to  25  pps  for  household  with  former  self-
employed unemployed), even if the corresponding effects at the aggregate level are small. 

It should be noted that to the extent that women currently are more disadvantaged by social 
security  systems  still  geared  towards  linear  full-time  employment,  the  improved  protection 
through  the  extension  of  mandatory  formal  coverage  but  also  better  effective  coverage  and 
transferability for non-standard employees would be especially beneficial for them. 

5.4.2. 

Impacts of measures promoting effective coverage and transferability 

Adjusting time thresholds 

Effectiveness:  
Time thresholds  make  the conditions for take-up of benefits more stringent thereby limiting 
inter  alia  fraud  and  budgetary  costs.  Nonetheless  the  time  thresholds  can  be  adjusted  to  a 
minimum  justified  by  policy  objectives  while  preserving  features  in  the  systems  that  avoid 
abuse92.  This  adjustment  can  significantly  reduce  the  barriers  for  non-standard  workers  and 
the self-employed to the take up of benefits in case of need. 

Direct cost and other economic impacts: 
This  measure  would  have  a  direct  cost  corresponding  to  the  payment  of  benefits  to  persons 
who  were  previously  unable  to  meet  the  time  requirements.  As  this  relates  to  persons  who 
were already formally covered by a scheme and thus contributing to it, no increase in revenue 
would offset these benefit payments. At unchanged contribution rates, it can therefore result 
in higher costs for the provider of the scheme, notably including an impact on public budgets 
in  the  case  of  statutory  schemes.  Budgetary  costs  could  be  partly  offset  by  the  savings 
resulting  from  lower  outlays  on  social  assistance  and  from  higher  consumption-related  tax 
revenue resulting from the improved effective coverage93.  

As an example, the effects of relaxing qualifying periods regarding unemployment insurance 
(for all potential unemployed) have been quantified in dedicated microsimulations (see Annex 
10,  Section  3).  In  the  simulations,  the  net  costs  for  the  unemployment  benefit,  going  up  by 

92 See also Box A.4 in Annex 6.  
93 See Annex 10 Section 3 for details. 

 32 

 
 
 
 
 
 
  
 
  
 
                                                            
0.13% of GDP. The initial budgetary costs are reduced due to increased tax revenues related 
to household consumption and positive effect on the welfare of individuals. 

As regards other economic impacts, carefully choosing the extent to which time thresholds are 
adjusted should limit – but would not avoid - further indirect costs potentially resulting from 
behavioural changes in response to the adjusted requirements. Such costs could notably stem 
from  reduced  incentives  to  work  associated  with  less  stringent  and  more  generous 
unemployment insurance.  

Social impacts:  
The measure is expected to have social impacts similar to those observed for formal coverage, 
resulting  in  a  reduction  in  the  individualisation  of  risk,  income  uncertainty,  precariousness 
and notably a lower risk of poverty. The above mentioned simulations show a positive impact 
on disposable household incomes on the lowest quintiles of the income distribution and would 
significantly  decrease  the  poverty  risk  for  the  group  of  the  unemployed  (see  Annex  10  for 
details).  

Ensuring preservation, transferability and aggregation of entitlements  

Effectiveness 
Preservation of rights can be expected to be moderately effective since it will at least allow 
individuals  not  to  lose  their  accumulated  entitlements  and  to  preserve  their  value  but  the 
individual  would  have  to  rebuild  his  entitlements  in  the  new  schemes  and  re-start  a 
contribution  history.  Here  there  is  an  interaction  with  the  time  thresholds  discussed 
previously. Regardless of past contributions, the individual would have to wait before taking 
up benefits in the new scheme  

The  aggregation  of  past  contribution  records  would  have  a  good  degree  of  effectiveness  in 
ensuring that people are covered in the short term following transitions.  

Mandatory  transferability  would  have  a  high  degree  of  effectiveness  as  it  would  allow 
individuals  not  to  lose  their  previous  accumulated  entitlements  when  changing  job  or 
employment status in a way which entails the transition to a different social security scheme 
and  at  the  same  time  enable  them  to  continue  contributing  to  social  security.  There  is  an 
interaction with the measures regarding effective coverage discussed above, to the extent that 
adjusting  time  thresholds  (e.g.  waiting  or  qualifying  periods  relating  to  unemployment  or 
sickness insurance) reduces the need to transfer elements related to the past membership into 
another scheme. The lower the time thresholds are, the lower are the barriers to transferability 
across schemes. 

The  introduction  of  personal  accounts,  disconnecting  rights  to  protection  through  social 
security  systems  from  professional  status  and  connecting  them  to  individuals,  would  ensure 
coverage while reducing the need for transferability (and its related costs) between schemes 
that are tailored to specific employment statuses. In practice, entitlements would be attached 
to  the  individual  regardless  of  the  number  of  labour  market  transitions  and  coverage  would 
not  be  impaired  by  the  need  to  start  a  new  contribution  history  at  a  change  of  a  job  for 
example. 

 33 

 
 
 
 
 
 
 
Direct costs and other economic impacts 
Preservation of entitlements is not expected to entail particular direct costs. 

Aggregation  of  past  contribution  periods  would  impact  benefit  payouts between  schemes  in 
situations where people changing employment status are covered by different and financially 
independent social security schemes before and after the change. Setting up some protection 
of  the  financial  interests  of  the  "recipient"  schemes  would  thus  be  necessary.  This  would 
relate  to  cases  where  most  of  the  minimum  period  is  accumulated  –  and  the  corresponding 
contributions paid- in the scheme under the old employment status, but the risk materialises 
soon  under  the  new  employment  status,  with  the  corresponding  costs  accruing  to  the 
associated "recipient" scheme. This would imply either requesting a certain minimum length 
of attachment to the new scheme i.e. setting a time threshold94, extending the coverage of the 
schemes  by  a  few  months  after  the  person  stops  contributing  or  setting  up  a  coordination 
mechanism  for  an  allocation  of  contributions  and  costs  across  schemes.  While  the  first 
alternative  runs  counter  to  the  underlying  objective  of  ensuring  coverage  also  in  the  initial 
phase  after  a  change  of  employment  status,  the  second  and  third  may  entail  larger  costs 
associated to the administrative complexity. 

Additional  indirect  costs  related  to  the  aggregation  of  past  membership  periods  in  other 
statuses  could  result  from  potential  behavioural  effects.  As  discussed  earlier,  minimum 
periods are in place to align people's behaviour with existing systems and avoid abuse. Policy 
objectives may thus set a limit to transferring past periods, like shortening minimum periods, 
to preserve the right incentives to the insured. 

Indirect positive effects on the labour market can be expected from mandatory transferability. 
Transferability can be expected to facilitate labour mobility including between sectors as well 
as transitions between employment and self-employment. This would contribute to increased 
labour market dynamism and a better allocation of resources.  

The introduction of personal accounts are expected to have the same positive effects on labour 
market dynamism as an approach securing accumulation transferability and aggregation but it 
would also entail increase the costs for public authorities and insurance providers as it would 
imply  important  changes  in  the  overall  coordination  of  existing  social  security  systems. 
Estimating the costs of such a system change is not possible with available tools.  

For  all  options  measures  above,  it  is  important  to  consider  the  starting  point  of  Member 
States.  In  countries  with  few  or  rather  homogeneous  schemes,  the  preservation  aggregation 
and  transferability  of  entitlements  is  likely  to  entail  less  administrative  costs  needed  for  the 
coordination between schemes than in countries with a significant number of diverse schemes 
and  a  rather  complex  administrative  environment.  The  more  homogeneous  the  conditions  d 
the  schemes  are,  the  faster  the  transferability  of  entitlements  is  likely  to  be,  re-assuring 
individuals and supporting their dynamism in the labour market.  

Social impacts 
Key social impacts should be qualitatively similar to the ones regarding measures on effective 
coverage,  notably  including  reductions  in  precariousness  and  the  risk  of  poverty  since  they 
will  facilitate  protection  for  those  who  alternate  and/or  combine  different  employment  and 

94 E.g. under regulation 883/2004 this is working at least 3 months in the context of cross-border mobility. 

 34 

 
 
 
 
                                                            
self-employment  statuses.  Their  importance  can  be  expected  to  increase  to  the  extent  that 
careers are increasingly characterised by frequent transitions, with positive consequences on 
employment levels, competitiveness and productivity. 

An  important  negative  social  impact  of  connecting  the  rights  to  individuals  via  the 
introduction  of  personal  accounts  could  be  a  reduction  in  the  solidarity  and  redistribution 
function of protection provided through social security systems and an associated increase in 
the individualisation of risks95.  

5.4.3. 

Impacts of measures promoting transparency 

Effectiveness 
The effectiveness of measures would depend on the degree of specificity of the information 
provided, on the frequency at which it is available and on the fact whether individuals need to 
take action to obtain the information.  

The  provision  of  generic  information  alone  would  be  moderately  effective  as  it  would  not 
reflect the specificities of individuals' situation and action by individuals would be required to 
access  the  information.  Personalised  information  is  expected  to  be  more  effective.  The 
frequency at which this information is provided would affect its effectiveness. If provided via 
online simulation tools or personal accounts, the information could be accessed at all times. 
The  provision  of  personalised  information  could  moreover  have  a  strong  impact  on 
encouraging  individuals  to  provide  for  their  social  protection,  especially  if  the  protection  is 
not  mandatory.  It  may  thus  help  achieve  the  objective  of  coverage  especially  in  voluntary 
schemes. 

Direct costs and other economic impacts 
The provision of generic information is likely to entail low direct costs. 

The  cost  of  providing  personalised information  through  dedicated  websites  and  tools  would 
consist of a one-off cost and further costs on an ongoing basis for the necessary updating and 
maintenance. The costs of providing personalised information by default have been assessed 
to  support  the  proposal  on  the  activities  and  supervision  of  institutions  for  occupational 
retirement  provision.  The  one-off  cost  is  expected  to  amount,  on  average,  to  around  7€  per 
member96.  

The costs of personalised information could be reduced by using digital solutions instead of 
paper.  However,  this  should  not  be  to  the  detriment  of  vulnerable  groups  that  might  lack 
access to such solutions and should take into account the needs of people with disabilities.  

95 Reported by ESPN experts for the case of Latvia. 
96  The  cost  estimated  relates  to  the  burden  of  providing  an  annual  pension  benefit  statement  to  members  of  schemes.  According  to  the 
impact  assessment,  the  total  costs  primarily  consist  of  a  one-off  implementation  cost  in  the  short  term  because,  once  the  measure  is 
implemented, the cost of regularly producing the pension benefit statement is likely to be immaterial. This cost is judged to be considerably 
lower  than  the  expected  benefits  for  the  employees  over  an  entire  40-year  accumulation  period.  The  impact  assessment  also  noted  that 
employers are likely to pass on the burden to employees, unless social dialogue results in some degree of cost sharing. 

 35 

 
 
 
 
 
 
 
 
                                                            
Importantly  costs  incurred  in  providing  transparent  information  via  new  technologies  are 
strongly  influenced  by  the  departing  positions  of  Member  States.  In  the  maturity  of  IT 
environments and e-government solutions. 

Personalised  information  is  also  expected  to  generate  economic  benefits  as  more  people 
would be encouraged to save and the reliance on safety nets is expected to decrease. 

Social impacts 
An increase in transparency of social security rights and obligations is likely to entail positive 
social  impacts.  Awareness  on  the  conditions  to  take  up  benefit  is  likely  to  increase.  The 
perception of insecurity vis-a-vis the real protection provided by social security (see Annex 16 
for more evidence on perceptions) is likely to decrease, with positive impacts on confidence 
indicators and higher perception of social fairness.  

Increased transparency will also bring more accountability of the organisations administering 
social security schemes towards their contributors, here again having positive impacts on the 
general perception of social fairness. 

6.  WHAT ARE THE POLICY PACKAGES AND THEIR IMPACTS?  

6.1.  Description of alternative policy packages 

Policy measures described in section 5.3 are now grouped in alternative policy packages. To 
address all objectives of the initiative, each policy package must necessarily include measures 
relating to all the areas, notably formal coverage, effective coverage & transferability as well 
as transparency. Measures are grouped together in a way that allows them to be coherent and 
mutually reinforcing in achieving the objectives of the initiative. 

Only  working  in  combination  can  the  three  objectives  promote  adequate  protection.  As 
previously  pointed  out,  formal  coverage  is  only  a  prerequisite  for  benefitting  from  the 
protection  granted  by  social  security  schemes  in  case  of  need.  If  not  accompanied  by 
measures ensuring the build up and take up of adequate entitlements, adequate and effective 
protection will not be achieved. Likewise, omitting measures on transferability would imply a 
lack of protection in the presence of transitions between employment statuses. The need for 
transparency is the highest when an individual has over time access to several schemes with 
differentiated rights, some mandatory others voluntary, due to a high number of employment 
transitions. Importantly, the lack of transparent information may hinder people's ability to be 
aware of their rights and thus benefit from the protection they may grant. 

Package A is the baseline in the absence of new EU action.  

Packages  B and  C  differ  with  regard  to  the ambition  relating  to  the  formal  coverage  of  the 
previously uncovered groups, where package C entails formal coverage for all and package B 
provides for a differentiated approach (mandatory coverage for non-standard employees and 
voluntary coverage for the self-employed), also in reaction to the emphasis stakeholders put 
on the specific characteristics and heterogeneity of the group of the self-employed.  

It  should  be  noted  that  establishing  mandatory  coverage  for  the  self-employed  is  a  realistic 
option. Based on the mapping presented in Chapter 2.2.2, there are 16 Member States where 
social security coverage is mandatory for the self-employed for at least some of the branches 
under consideration. For each one of these branches, there exist relevant examples of existing 

 36 

 
 
 
 
mandatory schemes for this group in at least a few Member States. The suggested option is 
thus in line with realities in the Member States.  

The  choice  of  measure  for  formal  coverage  has  implications  for  the  choices  regarding  the 
other measures in the packages. This is because – as mentioned above - formal coverage is a 
prerequisite for the other dimensions, notably for effective coverage and transferability. It is 
for this reason that only package C, the more ambitious package regarding formal coverage, 
maximising  the  number  of  people  for  whom  effective  coverage  and  transferability  may 
become relevant issues in the first place, also includes the provision of personal accounts to 
facilitate  transferability.  Personal  accounts  tie  rights  to  the  individual  rather  than  his 
employment  status,  requiring  comprehensive  changes  to  the  set-up  of  current  systems,  and 
can  thus  be  considered  the  more  ambitious  measure  in  this  respect.  Indeed  individuals  will 
only benefit from the introduction of personal accounts if they do have social security rights 
in  the  sense  of  being  formally  covered.  Thus  for  package  B  which  only  extends  formal 
coverage on a voluntary basis to the quantitatively important group of the self-employed, the 
introduction  of  personal  accounts  and  the  corresponding  necessary  changes  to  the  set-up  of 
social  security  systems  would  seem  disproportionate.  Package  B  thus  aims  to  facilitate 
transferability  in  a  more  proportionate  way,  via  changes  to  rules  in  the  existing  systems, 
notably  establishing  mandatory  transferability  of  accumulated  entitlements  and  allowing  the 
aggregation of periods upon changes between schemes.  

At the same time, it should be noted that regarding effective coverage, both packages propose 
the same measure – adjusting (to the extent compatible with policy objectives) time thresholds 
that  have  been  identified  as  obstacles  in  this  respect.  Precise  levels  or  thresholds  for  such 
adjustment cannot be fixed at EU level, limiting the scope for differentiation between the two 
packages.  Firstly,  such  levels  would  depend  on  the  precise  set-up  of  the  system  and 
interactions with other parts of the tax-benefit system. Secondly and relatedly, this is due to 
subsidiarity regarding the system design. 

Finally, it is logical that higher ambition regarding measures to improve formal and effective 
coverage as well as transferability reduces the needs for transparency – the less differentiated 
the  corresponding  rights  are,  the  less  need  there  is  for  personalised  information.  For  this 
reason,  package  B  (which  entails  a  higher  degree  of  differentiation  in  rights)  involves 
requirements  for  the  provision  of  generic  and  personalised  information  on  social  security 
rights and obligations. In package C, no measures to provide personalised information would 
need to be taken separately – but indeed such information will be readily available as a by-
product of the introduction of personal accounts, without further efforts. 

Package B  

Package C 

  Mandatory  for  all  workers  in  non-standard 
forms  of  employment  not  yet  covered  and 
voluntary for the self-employed. 

  Adjustment  of  time  thresholds;  mandatory 
transferability  of  accumulated  entitlements; 
aggregation of periods 

  Provision  of  generic  and  personalised 

  Mandatory  for  all  workers  in  non-
standard  forms  of  employment  and 
self-employed  
  Adjustment  of 

thresholds; 
entitlements  disconnected  from  type 
of  employment  via  personalised 
accounts 

time 

information  

  Provision of generic information 

 37 

 
 
 
  
 
Table 1: Mapping of policy measures and policy packages 

Objectives 

Measures 

Formal coverage 

i) Mandatory 

ii) Voluntary 

Packages 

C 

X (for non-standard 
workers and for the 
self-employed) 

B 

X (for non-
standard 
workers) 

X (for self-
employed) 

thresholds 

X  

Effective coverage 
& transferability 

adjustment 

i) 
+transferability+aggregation 

of 

time 

ii)  adjustment  of  time  thresholds  +personal 
accounts  

Transparency 

i) provision of generic information 

ii) provision of personalised information  

X 

X 

X 

X 
X1 

1 No dedicated measures are required for this, as personalised information would become available as a by-product of the introduction of 
personal accounts.  

6.2.  Impacts of the policy packages 

The  following  assessment  does  not  repeat  the  assessment  of  the  individual  measures 
undertaken  in  Section  5.4.  Instead,  it  describes  the  joint  impacts,  notably  highlighting 
interactions between the different measures grouped together both in terms of synergies and 
trade-offs.  

Package A / Baseline Scenario: This option does not address the problems, but represents the 
baseline, as set out in section 2.4, with which other options can be compared.  

Package  B:  The  package  would  lead  to  high  effectiveness  regarding  protection  and  thus 
pronounced positive social impacts while entailing corresponding costs for public authorities 
and  for  employers.  The  differentiated  approach  fully  respects  the  freedom  of  choice  of  the 
self-employed,  and  thus  fully  takes  into  account  the  nature  of  self-employment  while 
reflecting the significant heterogeneity among the concerned group. The provision of generic 
and  personalised  information  improving  transparency  could  stimulate  higher  voluntary 
enrolment,  at  a  relatively  small  cost  for  public  authorities.  The  package  could  make  a 
noticeable  contribution  to  supporting  labour  market  transitions  and  dynamics  as  it  helps 
ensure  the  build-up  of  entitlements  along  careers  associated  with  changes  between  social 
security schemes while also providing for coverage in the short term following such changes. 
This may help improve the allocation of resources.   

Package C:  

 38 

 
 
 
 
 
 
 
 
 
 
This package has a very high effectiveness by ensuring all on the labour market have formal 
coverage. The introduction of personal accounts usefully complements this by also providing 
protection following professional transitions, again with very high expected effectiveness. In 
thus reducing the differences in protection between groups, the package limits the needs for 
the provision of information, although the introduction of personal accounts would also entail 
the provision of personalised information as a by-product. As regards effective coverage, it is 
identical to Package C. 

Table  A.14  in  Annex  10  summarises  the  key  impacts  of  the  packages  in  a  comparative 
manner. 

6.3.  Comparing the policy packages 

The  table  below  summarises  the  results  of  comparing  the  baseline  scenario  to  the  two 
alternative packages B and C. The comparison is based on elements discussed in more detail 
for  each  policy  package  in  the  sections  above.  A  seven-stage  qualitative  grading  system  is 
proposed on the basis of the analysis of impacts in previous sections as follow: 

No impact (0) 

strong positive impact / very good assessment (+++), 
substantial positive impact / good assessment (++), 
small positive impact / satisfactory assessment (+),  

small cost (-),  
significant cost (--),  
high cost (---).  

Criteria for comparing policy packages 

A 

B 

C 

Effectiveness 
1. Formal coverage 
2. Effective coverage and transferability 
3. Transparency 
Social Impacts 
Cost 
Subsidiarity 
Proportionality  
Stakeholders' views 
Coherence  
1. Social Pillar objectives 
2. With other EU objectives  

0  
0 
0 
0 
0 
0 
0 
0 

0 
0 

++ 
+++ 
++ 
++ 
-- 
++ 
++ 
++ 

+++ 
++ 

+++ 
+++ 
+++ 
+++ 
--- 
+ 
+ 
+ 

+++ 
+++ 

Both packages B and C achieve an overall good level of effectiveness: 

  Formal  coverage:  There  will  be  a  substantial  increase  in  the  number  of  previously 
uncovered  people  in  the  case  of  Package  B.  The  extent  of  the  increase  in  the  number  of 
self-employed covered by social security depends on how many people enrol in voluntary 
schemes,  while  non-standard  workers  will  be  mandatorily  protected.  The  increase  in  the 
number  of  people  protected  is  expected  to  be  strong  in  the  case  of  Package  C,  since 
everyone will be covered on a mandatory basis.  

  Effective  coverage  and  transferability:  the  two  packages  have  the  same  requirements  for 
what concerns the adjustment of the time thresholds which determine the qualification for 
benefits  and  are  thus  expected  to  have  the  same  substantial  level  of  effectiveness  in  this 

 39 

 
 
 
 
 
 
 
 
 
 
 
 
 
respect.  The  creation  of  personal  accounts  in  Package  C  would  effectively  solve  all 
problems of transferability by de-connecting rights from employment status and linking it 
to  individuals.  Establishing  rules  facilitating  transferability  in  the  existing  system  as  per 
Package B is also expected to have a good effectiveness in this respect.  

  Transparency: The provision of personalised information as per Package B would have a 
substantial effectiveness in increasing transparency. In Package C, the creation of personal 
accounts would entail the provision of personalised information available at all times as a 
by-product without further action, achieving a strong degree of effectiveness. 

Social  impacts  are  expected  to  be  strongly  positive  in  Package  C.  Mandatory  coverage 
together  with  full  transferability  through  personal  accounts  and  aggregation  of  contribution 
periods strengthen the ability of people to effectively access social security benefits in case of 
need, contributing to the corresponding expected reduction of poverty among people in non-
standard  employment  and  among  the  self-employed.  Positive  impacts  for  the  self-employed 
under Package B depend on enrolment rates; overall positive impacts could be substantially 
positive.   

The direct costs of the packages comprise the cost of providing the benefits as well as costs 
related  to  improving  transferability  and  transparency.  As  previously  explained,  no 
comprehensive  quantification  of  the  cost  of  the  Packages  is  available.  However,  it  can  be 
expected that the corresponding cost is high in Package C entailing mandatory coverage for 
both groups and the creation of personal accounts, which would require important costs to be 
set  up.  For  Package  B,  the  cost  associated  to  extending  coverage  is  expected  to  be  lower 
because through a voluntary approach for the self-employed, the number of individuals to be 
covered will be also lower.   

Beyond  the  socio-economic  criteria  discussed  above  regarding  the  impacts  of  the  packages, 
there  are  criteria  of  political  nature  against  which  the  packages  are  assessed.  Firstly, 
considerations  on  subsidiarity  and  proportionality  are  to  be  made.  While  both  Packages 
respect subsidiarity since decisions of financing and design are left to the Member States, the 
mandatory  approach  of  Package  C  for  both  groups  leaves  a  low  degree  of  flexibility  in 
tailoring  choices  of  formal  coverage  to  the  specificities  of  the  self-employed.  Given  the 
special  characteristics  of  and  heterogeneity  among  the  self-employed,  a  voluntary  approach 
suggested in Package B appears more proportionate than Package C.   

Secondly, the stakeholders' feedback gathered in the preparation of this impact assessment 
does  not  indicate  a  clear  consensus  among  stakeholders,  and  in  particular  among 
representatives of the self-employed, for the strictest approach to formal coverage of the self-
employed. Indeed views are mixed and several stakeholders recalled the importance to leave 
freedom  of  choice  to  the  self-employed,  given  their  heterogeneity  and  the  current  limited 
knowledge  base  capacity  to  fully  assess  how  the  problem  is  likely  to  evolve.  Measures 
proposed  in  Package  B  are  thus  assessed  as  representing  a  good  compromise  between  the 
different  views  expressed.  As  Package  C  does  not  take  into  consideration  the  arguments 
presented by some employers and by some of the self-employed representatives; it is assessed 
as satisfactory in this respect. 

Finally, the analysis of coherence with other EU policies takes into account in particular the 
European  Pillar  of  Social  Rights.  The  two  packages,  which  aim  at  a  comprehensive 

 40 

 
 
 
 
 
improvement  of  coverage  and  also  address  comprehensively  the  issue  of  effective  coverage 
and  transferability  correspond  closely  to  the  Pillar's  ambition.  Coherence  with  the  EU2020 
objectives  related  to  poverty  is  very  strong  under  mandatory  coverage  for  all  (Package  C), 
where  a  high  reduction  in  poverty  can  be  expected  and  coherence  is  thus  assessed  as  good 
regarding Package B.   

7.  PREFERRED PACKAGE 

7.1.  Preferred policy option 

The preferred policy option  is policy package B. This  package  is the one that best  balances 
achieving the policy objectives with the related costs, with proportionality and with political 
considerations notably including stakeholder feedback and subsidiarity.  

By striking a balance between views expressed in the formal social partner consultation and 
taking  into  consideration  the  specificities  and  heterogeneity  among  the  self-employed,  the 
preferred  option  represents  a  realistic  and  proportionate  set  of  measures  appropriate  to 
contributing to a realisation of the ambitions of the European Pillar of Social Rights. 

It  is  important  to  notice  that  voluntary  schemes  can  be  set  up  with  different  mechanisms  to 
nudge  individuals  to  adhere  to  the  schemes.  Opt-out  clauses  imply  that  the  individual  is  by 
default included in the scheme but he/she can opt to move out of the scheme. Opt-in clauses 
imply that the individual is by default outside of the scheme but he/she can opt to adhere to 
the scheme. In both cases the individual has the freedom to choose whether or not he wants to 
be  a  member  of  a  given  scheme.  Voluntary  schemes  with  opt-out  options  are  usually  more 
effective in providing protection (see Section 1 in Annex 10). 

Given the nature of self-employed work, a mixed approach may be considered. For those risks 
that  are  more  difficult  to  evaluate  due  to  asymmetry  of  information  and  in  absence  of  a 
counterpart that verifies the information - as the employers for the dependent workers - opt-in 
clauses might be the most appropriate. These could apply to schemes such as unemployment 
and  accidents  at  work  and  occupational  injuries.  On  the  contrary,  an  approach  that  nudges 
more  effectively  self-employed  to  be  covered  may  be  considered  for  schemes  where  the 
asymmetry  of  information  is  less  problematic.  Opt-out  clauses  may  be  considered  for  risks 
such as pensions, invalidity sickness and maternity. 

7.2.  Overall impacts 

On workers and the self-employed  
There will be an increase in the number of people protected, which will decrease the number 
of  non-standard  workers  at  risk  of  poverty  and  to  some  extent  of  the  self-employed 
(depending  on  how  many  will  enrol  in  voluntary  schemes).  There  could  also  be  a  general 
moderate  reduction  in  income  inequality  via  impacts  on  the  self-employed  and  the  non-
standard workers, although the improvement would depend on how many self-employed will 
enrol in voluntary schemes and on the hiring preferences of the employers. 

Depending  on  Member  States'  financing  choices,  if  part  or  all  of  the  cost  of  extending 
coverage is left to the newly-covered groups, there would, as is usual in insurance schemes, 

 41 

 
 
 
 
 
 
be some income redistribution between those only bearing part of the cost and those for whom 
the  risks  and  associated  risks  materialise.97  At  the  same  time,  non-standard  workers  could 
experience  a  reduction  in  their  disposable  income  if  the  number  of  the  self-employed  that 
enrols  in  voluntary  scheme  is  low.  A  potential  push  towards  (bogus)  self-employment  to 
avoid  the  payment  of  social  security  contributions  would  be  limited  by  the  clarity  on  the 
boundaries between  workers  and self-employed  offered  by  the  Commission's  proposal  for  a 
Directive on transparent and predictable working conditions, which would help enforcement 
in  this  respect.  Again  depending  on  Member  States'  financing  choices,  there  could  be  a 
limited  loss  in  employment  for  affected  groups  in  reaction  to  a  potential  increase  in  labour 
cost 

Improved  effective  coverage  and transferability will  likewise  result  in  a  better  protection  of 
people  in  non-standard  work  and  self-employment,  including  after  transitions  in  the  labour 
market  which  entail  a  change  in  social  security  scheme.  Moreover,  people  in  non-standard 
employment  and  self-employment  will  be  able  to  maintain  and  use  their  accumulated 
entitlements. 

Receiving personalised information will help them to know which rights they are entitled to. 
and will allow them to better prepare for the risk. Transparent information will also stimulate 
the  participation  of  the  self-employed  in  voluntary  schemes  or  their  choice  to  increase 
contribution rates in schemes allow to do it. 

On companies 
Depending on financing choices, companies are expected to experience an increase in the cost 
of managing fluctuations in production, in line with some labour cost increase related to non-
standard  employment  and  the  self-employment.  The  increase  in  cost  should  be  reduced  in 
relation  to  non-standard  employment  because  most  categories  of  non-standard  workers  are 
already  covered  by  social  security  schemes,  so  that  the  share  of  those  to  be  mandatorily 
covered  is  small  compared  to  the  totality  of  the  workforce.  The  cost  increase  due  to  hiring 
services of the self-employed will depend on how many self-employed will decide to enrol in 
voluntary  schemes  and  on  the  extent  to  which  the  self-employed  will  pass  on  their  cost 
through higher prices.  

On the other hand, companies could benefit from an increase in productivity of individuals in 
the  newly  protected  forms  of  employment,  from  reduced  unfair  competition  and  from  the 
positive effects of social security systems on labour markets.  

Modification  of  effective  coverage,  transferability  and  transparency  do  not  impact  on 
companies at large. 

On Member States and insurance providers  
The exact financial impact will depend on i) how many unprotected people are present in the 
Member States and ii) how the new schemes will be designed or the old schemes extended, 
combining  public  and  non-public  schemes,  as  well  as  on  financing  choices.  For  instance,  if 
Member  States  will  finance  the  schemes  through  taxes,  public  expenditure  would  increase, 

97 This implies a decrease in disposable income for those newly covered individuals for whom the risks do not materialise. 

 42 

 
 
 
 
 
 
                                                            
but this could be partially offset by reduced expenditure on last resort safety nets (e.g. social 
assistance) via a reduction in the number of people relying on them.  

Adjusting thresholds to improve effective coverage could result in increased expenditure for 
(public  or  other)  insurance  providers,  without  corresponding  changes  on  the  revenue  side. 
Establishing  a  set  of  rules  for  transferability  and  the  protection  of  financial  interests  of 
schemes will also entail some costs and some redistribution between the schemes which are 
losing  participants  and  those  who  are  gaining.  On  the  other  hand,  increasing  the  number  of 
people  protected  and  assuring  that  they  are  effectively  protected  in  case  of  transitions  can 
improve  dynamism  of  national  labour  markets,  the  allocation  of  labour  resources  and  the 
competitiveness of the economies. This can be expected to lead to lower recourse to benefits 
and thus have a positive impact on the financial sustainability of the insurance providers. 

Concerning the provision of generic and personalised information,  there would be  an initial 
cost to set up the system but it would be followed by a limited cost for maintenance. These 
costs  are  expected  to  be  offset  by  the  positive  impacts  that  transparency  can  bring  on 
accountability and good governance of social security schemes. Furthermore, this could lead 
to  improved  social  perceptions  and  sense  of  security,  contributing  to  higher  levels  of 
consumer confidence, higher savings, more labour market dynamism and higher productivity.  

8.  THE CHOICE OF LEGAL INSTRUMENT 

8.1.  Legal options 

The  legal  instruments  considered  for  the  initiative  are  a  Council  Recommendation  and  a 
Directive; there could also be a combination of the two. The possibility of an increased focus 
on  the  issue  of  social  protection  in  the  framework  of  existing  tools,  notably  the  European 
Semester and the Open Method of Coordination, is also considered. A careful choice of the 
level of detail of the provisions would ensure full respect of subsidiarity, irrespective of the 
specific  instrument  chosen.  Subsidiarity  is  thus  not  an  argument  for  determining  the  choice 
between  the  different  legal  options  since  it  is  compatible  with  the  considered  legal 
instruments.   

Article  153  (2)  TFEU  provides  the  possibility  of  adopting  a  Directive  in  the  area  of  'social 
security  and  social  protection  of  workers'  to  set  binding  minimum  requirements  for  gradual 
implementation  in  the  Member  States.  Article  352  TFEU  provides  the  legal  basis  of  an 
initiative related to self-employment. 

A  directive  could  set  binding  minimum  requirements,  reflecting  the  ambition  of  the 
corresponding  principle  of  the  European  Pillar  of  Social  Rights  and  de  facto  establishing 
rights. A directive would bring a higher predictability of implementation while leaving some 
discretion  to  Member  States  to  transpose  according  to  their  national  specificities.  Given  its 
binding  character,  a  directive  would  have  a  high  degree  of  effectiveness  in  reaching  the 
objectives of the initiative. Taking into account the national competences in the area of social 
security as foreseen in Article 153 (2) TFEU, a directive could establish clear policy goals but 
would not be able to provide detailed guidance on the specific design and financing of social 
security systems. 

 43 

 
 
 
 
 
Alternatively,  the  Commission  may  adopt  a  proposal  for  a  Council  Recommendation 
providing guidance to Member States on how to achieve the policy goals set. Although such 
guidance  would  not  be  binding,  it  can  nonetheless  provide  a  basis  towards  a  level  playing 
field  between  Member  States  on  the  way  they  will  address  the  gaps  of  access  to  social 
security. A Council Recommendation would be based on Article 292 TFEU in combination 
with Articles 153(1)(c) and 153(2), third subparagraph, as well as with Article 352 TFEU. 

While a Council Recommendation may have a somewhat lower degree of effectiveness - as it 
would  not  give  the  EU  capacity  to  legally  sanction  a  Member  State  nor  give  citizens  the 
possibility of appealing to court in the case of no implementation - the non-binding character 
of  a  Council  Recommendation  would  also  allow  the  EU  to  leave  maximum  flexibility  to 
Member States on the way to achieve the goals. Reporting commitments can be included in 
the  Recommendation  itself  and  policy  coordination  instruments  such  as  the  European 
Semester can be used to promote progress.  

the  European  Semester, 

An alternative to a stand-alone Recommendation or Directive would be an increased focus on 
access to social security in the context of the existing policy framework and instruments in the 
field  of  social  protection,  namely 
its  country-specific 
recommendations (CSRs) and the Open Method of Coordination (OMC) on Social Protection 
and Social Inclusion. These instruments have already been used to stimulate dialogue at EU 
level on how to improve the access to social security for non-standard workers and the self-
employed.  However,  the  topic  has  not  been  covered  in  a  systematic  way  in  the  European 
Semester – where it competes with a number of other key priorities - or on a regular basis in 
the OMC and guidance is usually limited and expressed in general terms. Consequently, only 
one country, the Netherlands, received a Country Specific Recommendation (CSR) on access 
to  social  protection  for  non-standard  workers  in  201798  and  only  few  peer  reviews  were 
organised on this topic within the Social Protection Committee. This is partly due to the fact 
that the common objectives and indicators on access to social security gave little attention on 
how such access has evolved in function of changes in labour law and types of employment.  

8.2.  Preferred instrument 

The preferred instrument is a Council Recommendation as it is regarded as the most effective 
and proportionate instrument at this point in time.  

The consultations carried out in 2017, with social partners, relevant stakeholders and general 
public (see also Annex 11 for more details) indicated that there is no general consensus on the 
best  instrument  to  be  used.  Some  stakeholders  underlined  the  stronger  effectiveness  of  a 
directive; many others, including many Member States, showed little support for a legislative 
proposal,  taking  into  account  the  different  national  points  of  departure,  traditions,  political 
preferences  and  budgets.  Although  a  directive  would  likely  to  be  more  effective  from  a 
strictly  economic  point  of  view  in  reaching  the  objectives  set  out  for  this  initiative,  it  is 

98  “Tackle  remaining  barriers  to  hiring  staff  on  permanent  contracts.  Address  the  high  increase  in  the  self-employed  without  employees, 
including by reducing tax distortions favouring self-employment, without compromising entrepreneurship, and by promoting access of the 
self-employed  to  affordable  social  protection.  Based  on  the  broad  preparatory  process  already  launched,  make  the  second  pillar  of  the 
pension system more transparent, inter-generationally fairer and more resilient to shocks”, Council Recommendation on the 2017 National 
Reform  Programme  of  the  Netherlands  and  delivering  a  Council  opinion  on  the  2017  Stability  Programme  of  the  Netherlands,  9306/17, 
available online.  

 44 

 
 
 
 
                                                            
doubtful  that  it  would  gather  support  from  all  Member  States,  making  it  the  less  effective 
instrument overall. 

Furthermore, the problem identified is of an evolving nature. The debate on access to social 
protection  and  the  future  of  work  is  ongoing  in  several  Member  States  and  it  will  be 
influenced by ongoing reforms undertaken at national level. Certain aspects of it will also be 
influenced  by  the  potential  impact  of  some  ongoing  initiatives  at  EU  level  (including  the 
Commission's  proposal  for  a  Directive  of  the  European  Parliament  and  of  the  Council  on 
transparent  and  predictable  working  conditions  in  the  European  Union  or  the  directive  on 
pensions  portability).  The  problem  is  however  too  important  to  postpone  action  waiting  for 
the full materialisation of national reforms which, on their own and without general common 
guidance,  may  lead  to  uneven  progress  across  groups  (the  self-employed  vs.  non-standard 
employees), social security branches and Member States. 

Finally, the current statistical limitations make it difficult to fully monitor the evolution of the 
problem  and  such  limitations  –  compounded  with  a  number  of  choices  left  to  the  Member 
States  such as  the  level and  way  of financing the  action  -  have  also  strongly  influenced  the 
capacity to fully quantify the impacts of an EU action.. 

For the reasons explained above – the evolving nature of the problem, the ongoing reforms in 
some Member States and the strong statistical limitations  – a Council Recommendation is a 
more  proportionate  approach  than  a  Directive  (or  a  Directive  for  certain  elements  of  the 
proposal in  combination  with  a  Recommendation  for  the  rest)  which  would  impose  binding 
outcomes.  

The  key  added  value  of  a  Recommendation  at  this  stage  is  to  create  momentum  supporting 
and complementing national debates and reforms and guiding Member States' efforts in this. 
The  Recommendation  allows  the  EU  level  and  the  Member  States  to  work  further  to 
understand  the  phenomena,  its  implications  at  national  level  and  to  stimulate  and  guide  the 
reforms  at  national  level.  Importantly  it  will  ensure  that  progress  is  not  partial  or  uneven 
across target groups and social security branches. A focused approach is needed to give the 
issue the necessary political visibility, raise awareness and build momentum. This would help 
ensure that all Member States move in the same direction at the same time, thus  promoting 
upward  convergence  to  the  benefit  the  EU  economy  as  a  whole.  Indeed  efforts  are  needed 
from  all  Member  States  in  a  coherent  way  and  also  in  a  somewhat  simultaneous  fashion  to 
dispel doubts about possible first mover disadvantages.  

A  Council  Recommendation  can  also  contribute  to  create  consensus  on  the  best  reform 
options, which is, for the time being, lacking at national and European debate, and is however 
necessary  to  design  and  implement  reforms.  The  stakeholders'  consultations  (see  below) 
reveal substantial divergence on the best instruments, as well as the direction of reforms.  

Several examples from the recent past show how Council Recommendations can be effective 
instruments in achieving progress in the social field, notably the Youth Guarantee99 and the 
Recommendation  on  Long  Term  Unemployment100.  In  particular,  the  Youth  Guarantee, 
together  with  the  Youth  Employment  Initiative,  was  instrumental  in  encouraging  Member 
States'  to  step-up  their  efforts  in  this  field.  The  Council  recognised  "the  work  done  by 

99 Council recommendation of 22 April 2013 on establishing a Youth Guarantee, 2013/C 120/01 
100 Council recommendation of 15 February 2016 on the integration of the long-term unemployed into the labour market, 2016/C 67/01 

 45 

 
 
 
                                                            
Member  States  to  mobilise  additional  financial resources,  to  strengthen  and  modernise  their 
labour  market  institutions,  and  to  support  partnerships  between  the  employment,  education 
and  youth  sectors,  as  well  as  to  engage  with  social  partners,  in  line  with  national  practices, 
and other stakeholders, in order to better deliver the Youth Guarantee."101   

The  Recommendation  could  usefully  be  embedded  in  the  existing  processes  such  as  the 
European  Semester  or  the  Social  Open  Method  of  Coordination,  where  Member  States  are 
already intensively involved. By stepping-up existing efforts to improve the knowledge-base 
and by providing specific guidance, the Recommendation would complement the analysis and 
guidance  provided  in  the  European  Semester  through  country  reports  and  country  specific 
recommendations  (CSRs).  For  countries  with  CSRs  on  this  topic  or  related  areas,  the 
recommendation  provides  further  guidance  supporting  their  implementation  effort.  For 
countries without a CSR, it provides an EU level impetus for improvement of the coverage of 
the self-employed and non-standard workers. A Recommendation can also provide a coherent 
framework  with  a  set  of  key  principles,  which  could  guide  further  exchanges,  within  the 
Social  OMC,  on  how  to  improve  the  coverage  and  adequacy  of  protection  through  social 
security schemes, in practical terms.  

9.  HOW WILL ACTUAL IMPACTS BE MONITORED AND EVALUATED? 

9.1.  Monitoring 

Member  States  will  be  invited  to  collect  and  publish  reliable  statistics,  building  on  existing 
statistics where possible but acknowledging the existing gaps, broken down by employment 
status,  gender,  age  and  citizenships  and  to  report  on  the  corresponding  measures  taken  at 
national  level  on  a  regular  basis  in  the  framework  of  monitoring  of  the  European  Pillar  of 
Social Rights, of the multilateral surveillance and, in particular, of the European Semester.  

Moreover  reinforced  cooperation  will  be  established  with  Eurostat  to  create  indicators 
appropriate  for  this  area.  Although  long-time  series  would  not  be  available,  it  should  be 
possible to track progress towards formal coverage, effective coverage and transparency since 
the  publication  of  the  Recommendation.  Work  on  improving  indicators  has  already  started 
and  could  be  available  at  the  same  time  as  the  Member  States  start  implementing  the 
Recommendation.  

At European level, monitoring of the implementation of the Council Recommendation in the 
Member States could be built on the reporting arrangements within the European Semester, in 
the same vein as done for other Council recommendations. In the current Semester, the Joint 
Employment  Report  already  includes  -  for  the  first  time  -  a  short  analysis  of  the  gaps  in 
protection through social security systems related to the employment status of people in the 
labour  market.  For  the  Member  States  where  the  gaps  are  more  acute,  dedicated  country 
analysis will also be subject of multilateral and thematic reviews held by the Social Protection 
Committee. 

On  the  basis  of  a  commonly  agreed  list  of  indicators,  the  Commission  will  report  to  other 
relevant  EU  institutions,  including  the  European  Parliament,  Council,  and  the  European 
Economic and Social Committee on progress in the implementation of the Recommendation.  

101 See Council Conclusions on the implementation of the Youth Guarantee and the Youth Employment Initiative (2016) 

 46 

 
 
 
 
                                                            
In  line  with  the  Five  Presidents'  report102,  the  Commission  will  also  propose  to  further 
explore,  in  the  context  of  the  Social  Protection  Committee,  the  feasibility  of  establishing  a 
benchmarking framework for access to social security (see annex 14), pursuing the ongoing 
effort to establish benchmarking frameworks in areas that affect the sustainability of EMU.  

The  benchmarking  and  monitoring  framework  will  aim  at  evaluating  progress  made  by 
Member  States  in  decreasing  the  share  of  non-standard  workers  and the  self-employed  who 
have no formal coverage and no effective coverage, by social security branch. It will evaluate 
whether Member States have adjusted time thresholds to ensure better coverage. It will also 
check  whether  legal  frameworks  enable  transferability  of  entitlements  and  aggregation  of 
periods  across  schemes.  It  will  examine  whether  generic  and  personalised  information  on 
social  security  entitlements  is  available.  Outcome  impacts  such  as  the  poverty  reduction 
effects  of  social  benefits  for  the  self-employed  and  non-standard  employees  compared  to 
standard employees will also be evaluated.  

The table A.15 in Annex 14 presents the operational objectives of the preferred option and the 
corresponding indicators to measure progress with regard to these objectives. 

9.2.  Evaluation 

The  Commission  will  proceed  to  a  review  of  the  actions  taken  in  response  to  this 
Recommendation  and  an  evaluation  of  the  impact  of  the  Recommendation  in  consultation 
with the Member States and social partners at EU level in line with a review provision in the 
text of the Recommendation.  

The  evaluation  will  include  an  assessment  of  whether  the  operational  objectives  of  the 
Recommendation  have  been  reached.  The  benchmark  against  which  progress  will  be 
measured is the baseline situation defined in this Impact Assessment.  

A mapping of existing gaps of social security has been done for the purposes of this Impact 
Assessment and will be repeated in some years. The comparison of the two mappings  – ex-
ante  and  ex-post  -  will  allow  monitoring  the  evolution  of  the  social  security  schemes,  their 
coverage and their eligibility conditions., Targets can thus be established with reference to a 
reduction  in  the  number  of  groups  and  issues  identified  as  problematic  across  branches  and 
Member States.  

102 The Five Presidents' Report: Completing Europe's Economic and Monetary Union, June 2015 

 47 

 
 
 
 
 
 
                                                            
ANNEX 1: PROCEDURAL INFORMATION 

1. Lead DG, DEcide Planning/CWP references 

The lead DG is DG Employment, Social Affairs and Inclusion 
Agenda planning/Work Programme reference 2017/EMPL/003.  
Social Fairness Package: Initiative no. 8 in the Commission Work Programme 2018103. 

2. Organisation and timing 

The  Impact  Assessment  was  assessed  by  the  Interservice  Steering  Group  on  11/12/2017 
(present DGs SG, ECFIN, GROW, TAXUD) and on 12/01/2018 (present DGs SG, SANTE, 
GROW). 

The Analytical Document accompanying the second phase consultation of social partners on 
which the Impact Assessment is based, together with the second stage consultation document, 
was  assessed  by  the  Interservice  Steering  Group  on  11/07/2017  (present  DGs  SG,  GROW, 
HOME, JUST, SANTE, SJ, TAXUD) and on 13/10/2017 (present DGs SG, GROW, SANTE) 
and adopted following ISC (DGs consulted AGRI, BUDG,  CNECT, COMM, COMP, EAC, 
ECFIN,  ENER,  EPSC,  ESTAT,  FISMA,  GROW,  HOME,  JUST,  MARE,  MOVE,  REGIO, 
RTD, SANTE, SG, SJ, TAXUD, TRADE). 

The first stage consultation document, together with the TOR of the impact assessment study 
were assessed by the Interservice Steering Group on 27/03/2017 (present DGs SG, ESTAT, 
GROW,  HOME,  JUST,  SANTE,  SJ,  TAXUD)  and  adopted  following  ISC  (DGs  consulted 
AGRI,  BUDG,  COMM,  COMP,  DEVCO,  EAC,  ECFIN,  ECHO,  ESTAT,  HOME,  HR, 
CNECT, JUST, MARE, MOVE, REGIO, RTD, SG, SJ, TAXUD, TRADE, GROW, SANTE, 
FISMA). 

3. Consultation of the RSB 

The Impact Assessment report was reviewed by the RSB and discussed with the author DG in a 
meeting on 7 February 2018. On 9 February 2018 the RSB issued a positive opinion with reservations. 

The revisions introduced in response to the RSB opinion are summarised in the table below: 

RSB main reservations 

Changes done in the Impact Assessment 

(1)  The  report  does  not  sufficiently  substantiate 
a 
for 

choice  of 

the 

rationale 

the 
recommendation 

The  dedicated  Chapter  on  the  choice  of  options  now 
first discusses in more detail the three possible options 
(Recommendation,  Directive  or  more  focus  on  access 
to social security in the context of existing instruments, 
notably European Semester and OMC) in Chapter 8.1. 
Chapter  8.1  (as  well  as  Chapter  3.3)  also  emphasises 
that subsidiarity did not drive the choice of instruments 
but  would  be  ensured  for  each  of  the  possible 
instruments through an adequate choice of detail of the 
provisions 

The  choice  of  preferred  legal  option  is  then  further 
substantiated  in  Section  8.2,  stressing  in  particular 
proportionality in view of ongoing reforms, the need to 

103 COM(2017) 650 final ANNEX 1, ANNEX to the Communication from the Commission to the European Parliament, the Council, the 
European Economic and Social Committee and the Committee of the Regions Commission Work Programme 2018, An agenda for a more 
united, stronger and more democratic Europe. 

 48 

 
 
 
 
 
 
                                                            
(2)  The  report  does  not  properly  explain  and 
justify  the  limited  material  scope  of  the 
initiative;  it  does  not  sufficiently  clarify  the 
coverage of the personal scope. 

(3)  The  report  does  not  systematically  back 
claims  on  options  and  their  impacts  with 
robust evidence. 

guide reforms to ensure that progress is not uneven but 
convergence  is  achieved,  as  well  as  the  results  of 
consultations  and  Member  States  ownership  as  a  key 
determining  factor  for 
the 
instrument. 

the  effectiveness  of 

The  analytical  steps  that  led  to  the  narrowing  of  the 
scope have been described in Chapter 2.2.2, where also 
the  personal  scope  was  further  clarified.  The  link  of 
the  initiative  with  Art.  9  TFEU  and  Article  34  of  the 
Charter  of  Fundamental  Rights  is  established  in 
Section 3.1 which discusses the legal basis. The link to 
the  European  Pillar  of  Social  Rights  is  further 
strengthened and relevant results from the consultation 
undertaken  in  its  context  are  summarised  in  Chapter 
3.2 and Annex 11. The link to the proposed Directive 
on  transparent  and  predictable  working  conditions  is 
further  clarified  in  the  discussion  of  the  baseline 
(Chapter  5.1)  and  of  impacts  of  measures  on  formal 
coverage (Chapter 5.4.1). 

Reference  has  been  made  to  the  evidence  gathered  in 
presenting  the  rationale  for  the  reduction  in  scope  of 
the  initiative  (Chapter  2.2.2)  and  the  presentation  of 
the  packages  (Chapter  6.1)  better  explains  and  backs 
the  rationale  for  the  combination  of  measures  into 
packages.  The  higher  incidence  of  non-standard  work 
among  women  and  the  corresponding  impact  of  the 
initiative  on  them  are  highlighted  (Introduction  to 
Chapter  2,  Annex  4,  Chapter  5.4.1)  to  underpin  the 
gender  dimension  of  the  initiative.  The  effect  of  the 
choice of instrument on the assessment of impacts has 
further  emphasised  and  a  more  detailed 
been 
discussion  of  macroeconomic  effects  has  been  added 
in  Chapter  5.  The  monitoring  framework  (Chapter  9 
and  Annex  14)  further  details  how  progress  could  be 
monitored despite the existing data gaps. 

4. Evidence, sources and quality 

The following expert advice has fed into the Impact Assessment: 

-  From the Report of the public consultation "Accompanying the document establishing 

a European Pillar of Social Rights (SWD(2017)206)". 

-  From  the  commissioned  study  "Access  to  social  protection  for  all  forms  of 
employment:  Assessing  the  options  for  a  possible  EU  initiative"  by  Fondazione 
Giacomo Brodolini. 

-  From the commissioned study "Behavioural study on the effects of an extension of the 
access to social protection for people in all forms of employment" by Open Evidence. 
-  From  six  commissioned  case  studies  on  special  forms  of  employment  (Mini-jobs  in 
Germany,  civil  law  contracts  in  Poland,  self-employed  without  employees  in  the 
Netherlands,  casual  worker  in  Romania,  economically  dependent  self-employed  in 
Spain, project workers on continuous collaboration projects in Italy). 

-  From literature review as referred to in the footnotes. 

 49 

 
 
 
 
 
ANNEX 2: GLOSSARY AND TERMINOLOGY 

1.  Glossary 

Term or acronym 

Meaning or definition 

CJEU 

CWP 

EMU 

ESDE 

ESPN 

Eurofound 

EU-SILC 

IA 

ICT 

ILO 

LFS 

OECD 

RSB 

SMEs 

SWD 

TFEU 

Court of Justice of the European Union 

Commission's Work Programme 

Economic and Monetary Union 

Employment and Social Developments in Europe Report 

European Social Policy Network 

European Foundation for the Improvement of Living and Working 
Conditions 

European Union Survey on Income and Living Conditions 

Impact Assessment 

Information and communications technology 

International Labour Organisation 

European Union Labour Force Survey 

Organisation for Economic Co-operation and Development 

Regulatory Scrutiny Board 

Small and medium-sized enterprises 

Staff Working Document 

Treaty on the Functioning of the European Union 

2. 

Definitions 

1. Social security  

Social security covers all measures providing benefits, whether in cash or in kind, to secure 
protection, inter alia: 

 

 

from  lack  of  work-related  income  (or  insufficient  income)  caused  by  sickness, 
disability,  maternity,  accidents  at  work  or  occupational  diseases,  unemployment,  old 
age;  
lack of (affordable) access to health care;  

 50 

 
 
 
 
 
insufficient family support, particularly for children and adult dependants;  

 
  general poverty and social exclusion104.  

This  initiative  focuses  on  protection  from  lack  of  work-related  income  (or  insufficient 
income)  caused  by  sickness,  disability,  maternity  or  paternity,  accidents  at  work  or 
occupational diseases, unemployment or old age.  

Formal coverage: a group can be identified as formally covered in a specific social security 
branch  (e.g.  old  age,  unemployment  protection,  maternity  protection)  if  the  existing 
legislation  or  collective  agreement  sets  out  that  this  group  is  entitled  to  participate  in  the 
scheme. 

Effective  coverage:  a  group  can  be  identified  as  effectively  covered  in  a  specific  social 
security branch if the individuals in this group have an opportunity to accrue benefits and can 
access to those benefits in case of need (currently or in the future).  

A  social  security  scheme  is  a  distinct  framework  of  rules  to  provide  benefits  to  entitled 
beneficiaries.  Such  rules  would  specify  the  personal  scope  of  the  programme,  entitlement 
conditions, the type of benefits, benefit amounts, periodicity and other benefit characteristics, 
as  well  as  the  financing  (contributions,  general  taxation,  other  sources),  governance  and 
administration of the programme.  

A  benefit  is  a  transfer  in  cash  or  in  kind  made  by  a  public  or  private  entity  to  someone 
entitled to receive it as part of a social security scheme. 

Duration  of  benefits  refers  to  the  period  of  time  during  which  an  insured  or  the  insured's 
dependents can avail of the benefits of the social security scheme. 

Qualifying period means the period of membership of a scheme, required under national law 
or by the rules of a scheme, in order to trigger entitlements to the accumulated social security 
rights.  

Minimum working period means that the person is required to have worked a minimum of 
hours/months/years before being eligible to receive the benefit in case of need. 

Reference  period  is  the  period  within  which  the  qualifying  period  must  be  completed  (for 
instance, 12 months within 24 months).  

Waiting period:  in  some states  benefits are not  paid immediately upon the occurrence  of a 
contingency, in other words the claimant must wait for a fixed period after the beginning of 
their unemployment, sickness, etc., before they are paid any social security benefit. 

Transferability  refers  to  the  possibility  i)  to  transfer  accumulated  entitlements  to  another 
scheme and ii) to make qualifying periods in a previous employment status (or in concomitant 
employment statuses) count towards the qualifying periods in the new status. 

104 Regulation (EC) No 883/2004 — on the coordination of social security systems listed ten social security branches: sickness; maternity and 
paternity, old-age pensions, pre-retirement and invalidity pensions; survivors' benefits and death grants; unemployment, family benefits and 
accidents at work and occupational illness.  

 51 

 
 
 
 
                                                            
Transparency refers to the provision of information to the general public, potential scheme 
members,  schemes  members  and  beneficiaries  about  the  scheme's  rules  or  about  the 
individual obligations and entitlements. 

2. Employment statuses and types of employment relationship 

A "worker" means a natural person who for a certain period of time  performs services for 
and under the direction of another person in return for remuneration.  

Self-employment  refers  to  employment  in  which  persons  pursue  a  gainful  activity  for  their 
own account105.  

Employment status refers to the classification of persons as either working in the framework 
of an employment relationship (worker) or working on their own account (self-employed). 

Type of employment relationship refers to the various types of relationships that can differ 
regarding  the  duration  of  employment,  the  number  of  working  hours  or  other  terms  of  the 
employment relationship.  

Non-standard  employment is  described  by the  ILO106  as  employment  arrangements  which 
deviate from the 'standard employment relationship' (full time, of indefinite length, part of a 
subordinate  relationship  between  an  employer  and  an  employee).  It  includes  temporary 
employment  (fixed  term,  casual,  seasonal  work),  part-time  and  on-call  work,  multi-party 
employment  relationship  (subcontracted  labour,  temporary  agency  work)  and  disguised 
employment (misclassified self-employment but also dependent self-employment).  

New  forms  of  employment107  include  employee  sharing,  job  sharing,  interim  management, 
casual  work  (including  intermittent  work  and  on-call  work),  ICT-based  mobile  work, 
voucher-based  work,  portfolio  work,  crowd  employment,  collaborative  employment.  These 
forms  include  elements  of  non-conventional  workplaces,  support  of  ICT,  different 
employment  relationship  organisation,  different  work  patterns,  networking.  Eurofound 
underlines that there is currently no shared understanding of what constitutes ‘new forms of 
employment’.  

Some specific forms of work are also referred to: 

Casual work: according to Eurofound's definition108, casual work is a type of work where the 
employment is not stable and continuous, and the employer is not obliged to regularly provide 
the worker with work, but has the flexibility of calling them in on demand; it is work which is 
irregular or intermittent with no expectation of  continuous employment. Workers’ prospects 
of getting such work depend on fluctuations in the employer's workload.   

Eurofound divides casual work into two main categories: 

- 

- 

On-demand work (including zero-hours contracts) 

Intermittent work 

105 This definition is meant to be used in the context of the Impact Assessment and does not have any legal consequence. 
106 ILO (2016): Non-standard employment around the world: Understanding challenges, shaping prospects. International Labour Office – 
Geneva. 
107 Eurofound (2015): New forms of employment, Publications Office of the European Union, Luxembourg. 
108 Eurofound (2015), page 46. 

 52 

 
 
 
 
                                                            
The  first,  on-call  work,  involves  a  continuous  employment  relationship  maintained  between 
an employer and an employee, with the option for the employer to call the employee in as and 
when  needed.  In  some  countries  employers  are  obliged  to  indicate  a  minimum  number  of 
hours, while in others they are not obliged to ever call the worker (i.e. zero-hours contracts). 
The  second  category  of  casual  work,  intermittent  work,  involves  an  employer  approaching 
workers on a regular or irregular basis to conduct a specific task, often related to an individual 
project or seasonal work. 

Crowd employment/platform work: “A European agenda for the collaborative economy”109 
defines  the  concept  of  collaborative  economy,  the  presence  of  an  online  platform  being  a 
necessary element of the definition. It does not, however, refer to platform work, which is not 
formally defined at EU level. Platform work is carried out by service providers who can be 
professional or not; they can be self-employed persons or workers. 

Eurofound  (2015)  defines  crowd  employment  as  an  employment  form  that  uses  an  online 
platform to enable organisations or individuals to access an indefinite and unknown group of 
other organisations or individuals to solve specific problems or to provide specific services or 
products in exchange for payment. 

Crowd  workers  are  very  rarely,  if  ever,  employed  by  the  platform.  Instead,  they 
predominantly  operate  on  a  self-employed  basis  as  independent  contractors  and  outside  the 
scope of employment legislation. Eurofound notes that crowd employment platforms have to 
follow general legal frameworks such as commercial codes, civil codes, consumer protection 
acts and data protection legislation, but there are no legal or collectively agreed frameworks 
specifically addressing crowd employment in Europe110.  

Domestic  work:  ILO  defines  “domestic  work”  in  Article  1  of  the  Domestic  Workers 
Convention, 2011 (No. 189): 

(a)  the  term  “domestic  work”  means  work  performed  in  or  for  a  household  or 
households; 

(b) the term “domestic worker” means any person engaged in domestic work within an 
employment relationship; 

(c) a person who performs domestic work only occasionally or sporadically and not on 
an occupational basis is not a domestic worker. 

'Temporary  Agency  Work'  is  a  form  of  work  where  the  worker  has  a  contract  of 
employment or an employment relationship with a temporary-work agency with a view to be 
assigned to a user undertaking to work temporarily under its supervision and direction111.   

Voucher-based work is 'a form of employment where an employer acquires a voucher from a 
third  party (generally  a governmental authority) to  be used as  payment for a service from  a 
worker, rather than cash'112. This type of employment has been introduced in several Member 

109 COM(2016) 356 final. 
110 Eurofound (2015): New forms of employment, Publications Office of the European Union, Luxembourg. 
111 Directive 2008/104/EC, Article 3 (1) (c). 
112 Eurofound (2015): New forms of employment, Publications Office of the European Union, Luxembourg, p.82. 

 53 

 
 
 
 
 
 
                                                            
States as a way to better regulate domestic work and improve protection of domestic workers, 
or tackle the problem of undeclared work in agriculture. 

Traineeship is a limited period of work practice, whether paid or not, which includes learning 
and  training  components,  undertaken  in  order  to  gain  practical  and  professional  experience 
with a view to improving employability and facilitating transition to regular employment113.  

‘Bogus’ or ‘false’ self-employment refers to the phenomenon of workers who would usually 
meet the legal definition of a worker (see above) but instead are registered as self-employed. 
In  this  case,  the  subordinate  employment  relation  is  disguised  as  autonomous  work,  usually 
for fiscal reasons, or in order to avoid the payment of social security contributions and thereby 
reduce labour costs, or to circumvent labour legislation and protection, such as the provisions 
on  dismissals.  This  can  be  characterised  as  an  employer  abuse  of  contractual  relations,  and 
these workers are also, compared to employed workers, at a higher risk of precariousness due 
to  a lack of social  security and pension  coverage and a lack of access to  some employment 
rights114. 

Dependent self-employed are responsible for their own work and therefore formally do not 
work under the authority and responsibility of the main contractor  even if de facto they are 
economically dependent from one employer/customer. 

Economic sectors are sectors of the economy, grouped according to the kind of products or 
services they produced or according to ownership. 

113 According to the EU Quality Framework for Traineeships. 
114 EP (2016). 

 54 

 
 
 
                                                            
ANNEX  3:  FURTHER  INFORMATION  ON  THE  ORGANISATION  OF  SOCIAL  PROTECTION 
SYSTEMS  

Social  protection  schemes  may  differ  in  a  number  of  dimensions.  There  is  no  single 
classification  available  and  recognised  internationally.  However,  the  European  system  of 
integrated  social  protection  statistics,  abbreviated  as  ESSPRO  and  developed  by  Eurostat 
defines  a  number  of  characteristics  which  can  be  freely  combined  to  produce  different 
groupings of schemes as required by analysis.  

The categories are defined on the basis of (i) which body takes the essential decisions, (ii) the 
existence or absence of a legal obligation, (iii) the way entitlements are established, (iv) the 
scope  of  the  scheme,  (v)  the  level  of  protection  provided.  The  classification  is  part  of 
ESSPROS's regulation.  

Decision-making 

In total, Eurostat registered 1082 social protection schemes in Europe (including Switzerland, 
Iceland, Serbia and Turkey). Around 70 of them are not controlled by the central government 
or  local  authority.  Among  these,  you  can  find  many  combinations:  occupational  or  general 
schemes, compulsory or not compulsory, etc.  

 55 

 
 
 
 
 
Box A.1: Examples of private insurance schemes 

Belgium: The Voluntary Supplementary Pension Scheme for the Self-Employed allows self-
employed to save for a supplementary pension. Some 46% of the self-employed exercising a 
main activity are covered by this non-compulsory private insurance scheme. 

Germany:  The  self-employed  (with  the  exception  of  farmers  and  artists)  and  the  well-paid 
salaried  workers  (2016:  above  €4,676  a  month,  adjusted  annually)  can  choose  between  the 
private  health  insurance  (PHI)  system  and  a  voluntary  membership  in  the  statutory  health 
system  (SHI)  system.  8.8  million  (11  per  cent) people in  Germany  were  qualified  to  hold  a 
private health insurance (PHI). 

Latvia:  Private  insurance  companies  offer  health  insurance  policies  –  but  mainly  to  legal 
entities  with  the  sufficient  number  of  employees.  Until  recently,  private  persons  had  no 
opportunity to take out a health insurance policy – only companies could do it, now some of 
insurance companies are selling policies also to private persons, but prices are much higher in 
that case and few people can afford it. Many large and medium-sized companies are buying 
health  insurance  policies  for  their  employees,  but  for  small  companies  it  is  often  not 
affordable because of high prices. 

Typologies and financing of social protection schemes 

Non-contributory  schemes  are  social  transfer  schemes  which  normally  require  no  direct 
contribution  from  beneficiaries  or  their  employers  as  a  condition  of  entitlement  to  receive 
relevant benefits. They include a broad range of schemes including universal schemes for all 
residents,  categorical  schemes  covering  specific  categories  of  residents  and  means-tested 
social assistance schemes. They are usually financed through tax or other state revenues. 

Universal  schemes,  in  particular,  are  non-contributory  transfer  schemes,  which  cover  all 
residents,  and  provide  benefits  for  all,  whether  working  or  not  and  irrespective  of  income. 
Often  the  only  condition  attached  to  the  receipt  of  the  benefit  is  that  the  person  must  be  a 
long-term resident or a citizen of the country.  

Social insurance – like all forms of insurance – is a mechanism for (financial) risk pooling. It 
represents  one  of  the  most  important  instruments  through  which  social  security  schemes 
operate, as it has done since the outset of national systems of social security, the earliest being 
the  system  introduced  by  Chancellor  Bismarck  in  Germany  in  the  1880s.  The  insurance 
principle operates on the basis that a group of individuals (or perhaps their families), who are 
vulnerable to a specific risk (for example, disabling injury, or sickness) pay contributions into 
a  pool  or  fund  which  is  then  used  to  pay  benefits  according  to  specified  rules  so  as  to 
indemnify those participants who suffer from the occurrence of the relevant risk. 

Social insurance is financed by contributions, which are normally shared between employers 
and employees, with, perhaps, state participation in the form of a supplementary contribution 
or  other  subsidy  from  general  revenue.  Participation  is  compulsory,  with  few  exceptions. 
Contributions  are  accumulated  in  special  funds,  out  of  which  benefits  are  paid.  A  person's 
right to benefit is secured by his contribution record without any means-test. Within floor and 
caps contribution and benefit rates are often earnings-related115. 

115 Available online. 

 56 

 
 
 
 
                                                            
Occupational  social  security  schemes  provide  workers,  whether  employees  or  self-
employed,  in  an  undertaking  or  group  of  undertakings,  area  of  economic  activity, 
occupational  sector  or  group  of  sectors  with  benefits  intended  to  supplement  the  benefits 
provided by statutory social security schemes or to replace them, whether membership of such 
schemes is compulsory or optional116. 

Financing of social protection 

There  is  a  wide  variety  in  financing  structures  of  social  protection  systems  across  Europe. 
While on average, around 55% of the financing is relying on social contributions (employers 
and persons protected), the share of total social contributions in total resources actually varies 
from around 20% in DK to 80% in EE (Figure A.1). This diversity reflects the variety of the 
provision of social protection in Europe, such as typically whether social protection systems 
are  more  insurance  based  (and  thus  more  financed  by  social  contributions)  or  universal  in 
nature (and then more financed by general  taxation), but  also other  dimensions, such as  the 
relative  share  in  expenditure  of the different  main  risks (for  instance  pensions  are  generally 
more  financed  based  on  social  contributions  and  health  expenditure  more  based  on  general 
taxation, see para below) or the relative importance of occupational versus publicly managed 
schemes.  

Some estimates of the relative shares of social contributions and general taxes to the financing 
depends  by  type  of  social  protection  area  considered  can  be  derived117.  In  general  pensions 
and family expenditure rely more heavily on social contributions (on average around 75% of 
total financing) as well as unemployment benefits (around 60% on average), while health care 
systems rely less on social contributions (on average 40%) and more on general taxation. 

Trends  in  social  security  financing  show  that  general  taxes  increasingly  complement  social 
contributions (Figure A.2a shows that this continued in terms of structure since the crisis hit 
in 2008, though to a lesser extent). The share of general taxation (and other sources) in total 
resources increased in the latest decades and is now close to 45% (against 35% in 1995, see 
Figure A.3b). It can be noticed that this increase in the share of general taxation corresponds 
mostly to a decline in the share of employers’ and employees’ contributions, while the share 
of  social  contributions  from  the  self-employed  or  other  persons  covered  remained  broadly 
constant.  This  observed  trend  of  decline  in  the  shares  of  employers’  and  employees’ 
contributions combined with a growing number of persons in self-employment poses a double 
challenge to the sustainability of social security systems, particularly Bismarckian ones118.  

Figure A.1: Structure of social protection financing (2014) 

116 Council Directive 96/97/EC. Available online. 
117 See for instance Social Protection Committee (2015): Social protection systems in the EU: financing arrangements and the effectiveness 
and efficiency of resource allocation. 
118 See DICE Database (2008): Bismarck versus Beveridge: A Comparison of Social Insurance Systems in Europe. Ifo Institute, Munich 

 57 

 
 
 
 
 
                                                            
(%GDP)  

(% total resources) 

Source: ESSPROS 

Figure A.2: Trends in social security financing structures 

a.                                                                          b. 

Source: ESSPROS 

The structure of social benefits expenditure 

At  EU  level,  social  expenditure  on  old  age  pensions  and  healthcare  has  grown  over  recent 
years  as  a  percentage  of  GDP,  while  the  expenditure  devoted  to  family  and  unemployment 
benefits  has  tended  to  either  remain  static  or  decrease.  In  2014,  overall  social  protection 
expenditure (excluding administrative and other expenditures) accounted for 28% of GDP on 
average  across the EU, ranging  from around 14.5%  in  Latvia and Lithuania  to  over  30%  in 
Denmark, France and Sweden (Figure A.3).  

 58 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
While  there  are  clear  variations  across  Member  States  in  the  actual  composition  of 
expenditure  (Figure  A.4),  in  all  countries  pensions  (old  age  and  survivors)  and  healthcare 
(sickness/healthcare  and  disability) account  for by  far  the  largest  shares  of  social protection 
expenditure,  with  these averaging  44%  and  35%  respectively  (or  13%  and  10%  of  GDP)  at 
EU  level.  In  general,  pensions  account  for  the  largest  share  of  expenditure  in  almost  all 
countries, with this being especially the case in Cyprus, Italy, Poland, and above all Greece. 
The  other  branches  of  social  protection  account  for  much  more  limited  shares  of  social 
expenditure – at EU level family/child benefits account for 8% of total expenditure (or 2.4% 
of  GDP),  unemployment  5%  (or  1.4%  of  GDP)  and  housing  2%  (0.6%  of  GDP)  although 
notable variations exist. For example, in Belgium, Finland, Ireland and Spain expenditure on 
unemployment benefits is well above the EU average, while in Denmark, Finland, Germany, 
Luxembourg and Sweden this is more the case for family/child benefits, and in the UK there 
is markedly more expenditure on housing benefits.  

Generally  speaking, the  level  of  social  contributions  from  the  self-employed  is  significantly 
lower  than  that  of  employees,  taking  into  account  both  employees  and  employers 
contributions.  However,  it  is  similar  to  the  level  of  employees'  contributions  only  (Figure 
A.5), which can typically relate to the design of social security provision (with less extensive 
or voluntary settings for the self-employed)119.  

Figure A.3: Structure of social protection expenditure as % of GDP, 2014 (excluding 
administrative and other expenditures) 

Source: ESSPROS 

Figure A.4: Structure of social protection expenditure as % of total expenditure, 2014 

119 This is, in particular, the case of some Member States (Estonia, Hungary, Latvia, the Netherlands, Romania, Poland and to a lesser extent 
Cyprus, Germany, Greece, Croatia, Portugal, Sweden and the UK). These comparisons need, however, to be considered with caution as in 
particular they do not account for possible differences in average earnings between employees and between the self-employed and employees 
(for instance, if self-employed earnings would be lower, the estimated apparent contribution rates would be higher), nor do they take into 
account possible additional individual savings in particular for the self-employed. 

 59 

 
 
 
 
 
 
                                                            
Source: ESSPROS 

The role of social dialogue in easing transitions 

Social  partners  play  a  key  role  in  the  design  of  social  protection  schemes  that  derive  from 
collective  bargaining.  These  schemes  often  relate  to  a  given  economic  sector,  reflecting  the 
structure  of  sectoral  dialogue.  In  other  instances,  there  are  initiatives  with  a  cross-sectoral 
dimension. In either case initiatives from social partners no longer consider solely the social 
protection  benefits  inherent  to  a  given  contract  and  take  a  wider  perspective  of  securing 
transitions and whole professional careers. 

For  example,  a  variety  of  joint  approaches  have  been  used  to  address  issues  related  to 
extending  social  protection  to  Media,  Arts  and  Entertainment  sector  workers,  mostly  as  an 
outcome of social  dialogue. Some trade  unions offer social protection coverage to  freelance 
members.  In  some  countries,  specific  schemes  have  been  developed  to  provide  coverage  to 
Media, Arts and Entertainment workers – for example, the social security insurance fund for 
artists  and  writers  in  Germany120,  which  covers  self-employed  and  freelance  artists  and 
writers, and the unemployment benefit for intermittent entertainment workers in France. 

Figure  A.5:  Estimates  of  the  relative  apparent  contributions  of  self-employed  vs. 
employees in the EU (2014) 

120 Available online. 

 60 

 
 
 
 
 
 
                                                            
Source: ESSPROS 

Note: Estimates of GDP per employment are derived from the national accounts for GDP levels and from LFS 
for employment levels; the number of self-employed is also taken from the LFS. 

Since  1969  in  France,  performing  artists  working  on  a  short-term  basis  (intermittent  du 
spectacle)  benefit  from  a  rebuttable  presumption  of  employment  enshrined  in  the  French 
Labour  Code.  This  provision  applies  to  performing  artists  and  to  technicians  who  regularly 
work on a short-term basis. The mechanism of the Guichet Unique du Spectacle Occasionnel 
(GUSO)  is  designed  to  facilitate  the  protection  of  short-term  workers  in  France  and  their 
enjoyment of this status. This mechanism and the vocational training fund that it facilitates are 
an  outcome  of  the  strong  social  dialogue  between  employers  and  workers  on  behalf  of  the 
intermittent du spectacle. The Swedish 'Teateralliansen' (there is also a similar 'dansalliansen' 
which caters for dancers) is a structure specifically created to increase the social protection of 
freelance actors121. 

Another  case  in  point  is  the  bipartite  funds  that  offer  extra  social  protection  to  agency 
workers. These funds are financed through employers' contributions and governed through a 
bipartite model. The funds are cross-sectoral and allow agency workers to benefit from their 
protection  regardless  of  the  sector  in  which  they  perform  their  assignments  or  between  two 
assignments. 

121 Available online. 

 61 

 
 
 
 
 
 
 
 
                                                            
ANNEX  4:  FURTHER  INFORMATION  ON  NON-STANDARD  EMPLOYMENT  AND  SELF-
EMPLOYMENT  

1.  Self-employment: decline in traditional forms amid growth in new forms 

1.1.  The self-employed: group size, characteristics and heterogeneity 

There  were  32.7  million  self-employed  in  the  EU-28  in  2016,  accounting  for  15%  of  total 
employment.  They  were  mainly  concentrated  in  the  following  sectors:  agriculture,  forestry 
and  fishing  (14.1%),  wholesale  and  retail  trade  (15.8%),  construction  (12.9%)  and 
professional,  scientific  and  technical  activities  (12%)122.  Southern  and  Eastern  European 
countries  have  the  greatest  percentage  of  self-employed  people,  with  Greece  topping  the 
charts (30%). At the other end of the spectrum, two central and Northern European countries 
have  the  lowest  proportion  of  self-employed,  i.e.  Denmark  (8.3%)  and  Luxembourg  (9%). 
The Netherlands and Ireland have self-employment rates above the European average (Figure 
A.6)123.  

Figure A.6: Share of self-employed in total employment, by countries, 2016  

0,35

0,3

0,25

0,2

0,15

0,1

0,05

0

L
E

T
I

O
R

L
P

Z
C

S
E

L
N

T
P

E
I

K
S

K
U

I

E F
B

T
M

Y
C

R
H

I

V S
L

R
F

T
L

T
A

G
B

U
H

E
D

E
S

E
E

U
L

K
D

8
2
U
E

Source: Eurostat, Employment by sex, age and professional status  

Among  the  self-employed  it  is  possible  to  distinguish  between  the  self-employed  with  and 
without  employees.  In  2016,  71.5%  of  the  self-employed  were  self-employed  without 
employees124;  28.5%  of  the  self-employed  without  employees  were  registered  as  managers, 
professionals or associate professionals, while around 21.4% were agricultural or elementary 
workers, 16.2% were reported to be sales or service workers and 21% skilled or semi-skilled 
manual workers such as craft and related trade workers. The occupations of the self-employed 
vary  considerably  across  countries.  For  example,  in  the  Sweden,  Belgium,  Germany  and 

122 There is a substantial variation across Europe. The share of self-employment is very high in agriculture, forestry and fishing in countries 
like  Romania  (65.1%  of  the  total  number  of  self-employed)  and  Poland  (38.9%),  and  rather  low  in  countries  like  the  United  Kingdom 
(3.0%), Slovakia (3.7%) and the Czech Republic (4.4%). A  large proportion of self-employed workers can be found in the wholesale and 
retail industry in Malta (31.3%), Bulgaria (26%), Spain (24%) and Italy (22.8%). The United Kingdom, Slovakia and Ireland have the largest 
proportion of self-employed in the construction sector (between 15.5 and 25.2%). 
123 See ESPN (2017). 
124 EU LSFA.  

 62 

 
 
 
 
 
 
                                                            
 
Luxembourg,  well  over  50%  of  the  self-employed  without  employees  worked  as  managers, 
professionals or associate professionals in 2016, while in Romania they were just 3%.  

The  overall  (marginal)  decrease  of  the  self-employed  between  2008  and  2016  becomes  an 
increase, if the primary sector is excluded from the analysis (Figure A.7). 

Figure A.7: Share of self-employed in total employment in the EU28, 2008 and 2016 

0,16

0,14

0,12

0,1

0,08

0,06

0,04

0,02

0

EU 28 - all sectors

EU 28 - except agricolture, fishing and forestry

2008

2016

Source: Eurostat 

Moreover, it is possible to note that there has been a change in the socio-economic structure 
of  the  self-employed  population  (Figure  A.8).  A  high  decrease  can  be  noticed  among  the 
managers, and the occupations related to agriculture and manufacturing, while there has been 
an  evident  increase  among  the  self-employed  in  services  and  sales  and  among  the 
professionals. 

Figure A.8: Share of self-employed in total employment by occupation in the EU28, 2008 
and 2016 

0,25

0,2

0,15

0,1

0,05

0

 Source: Eurostat 

2008

2016

 63 

 
 
 
 
 
As also expressed by stakeholders during consultations, it is very important to go further in-
depth  in  the  analysis  to identify  and  take  into  account the  diversity  among  the  group  of  the 
self-employed  (going  beyond  the  traditional  split  between  the  self-employed  with/without 
employees) in order to assess to which extent granting them access to social security responds 
to an actual need125.  
A study by Eurofound126 sheds light on the heterogeneity of the self-employed using survey 
evidence exploited with the help of advanced econometric methods127.  
In  particular,  the  self-employed  can  be  clustered  into  five  different  groups  ('employers128', 
'stable own account workers'129, 'vulnerable'130, 'concealed'131, 'small traders and farmers'132 - 
see  also  Figure  A.9)  in  line  with  their  characteristics  along  a  pre-selected  list  of  key 
dimensions relevant to their employment and work situation. The names of the groups were 
chosen  to  illustrate  the  most  important  aspect  of  the  nature  of  each  group.  They  are  not 
commonly agreed or formal terms.  

Of those five groups, two groups – the ‘employers’ and the ‘stable own-account workers’, 
representing about half of the self-employed or just over 16 million people  - generally have 
more  favourable  characteristics.  These  groups  are  generally  more  independent  with  more 
discretion  over  their  work,  have  bigger  and  economically  more  viable  and  sustainable 
activities and are more likely to be self-employed out of opportunity. For two other groups, 
‘vulnerable’  and  ‘concealed’,  together  a  group  of  eight  million  people  -  or  roughly  the 
population size of Austria - the opposite is the case: they are generally more dependent and 
have less autonomy over their work. Also, these groups are in more precarious situations with 
lower levels of income and job security. They experience overall rather unfavourable working 
conditions. For the final group, ‘small traders and farmers’, which amount to also around 
eight  million  people,  the  picture  is  more  mixed  with  a  combination  of  both  favourable  and 
unfavourable conditions. 

Figure A.9: Size of five groups of self-employed within the EU28 workforce (% of total 
employment) 

125 For instance, self-employed who are business starters or new entrepreneurs may face particular difficulties, see SME Action programme" 
finalised by the SME Envoy Network in 2017, http://ec.europa.eu/growth/smes/business-friendly-environment/small-business-act/sme-
envoys_en. 
126 Eurofound (2017), Exploring self-employment in the European Union. Luxembourg : Publications Office of the European Union. 
127 Latent class cluster analysis looks for patterns regarding a list of indicators listed and by showing how each of the clusters score on these 
indicators, reveals the defining characteristics of each cluster. 
128  The  self-employed  in  this  cluster  are  characterised  by  working  on  multiple  sites  and  employing  multiple  employees,  often  more  than 
eight. They have high discretion over their professional situation, both in terms of laying off employees and of taking time off for personal or 
family matters. 
129 The size of their economic activity is limited to one site only (98%) and 99% do not employ any staff. The job is relatively sustainable 
and not precarious, given this cluster’s low representation in the lowest income quintile and the average level (compared with that of other 
self-employed workers) of financial security in the case of sickness. Most of the self-employed in this category have high discretion over 
their professional life: they would have the authority to dismiss personnel (if applicable) and almost 90% are able to take time off at short 
notice for private matters. 
130 The self-employed in this cluster almost exclusively work on one site only and a majority (76%) work alone, while 24% have between 
one and eight co-workers. The economic sustainability of these jobs is generally low: four out of five self-employed in this cluster are in the 
lowest and the second lowest income quintiles, and they are generally not paid a fixed fee on a weekly or monthly basis. Only a minority 
(28%) has the authority to dismiss employees, but taking time off at short notice is easy for 84%. 
131 The majority of workers in this cluster (65%) is paid on a weekly or monthly basis and work with co-workers, while the majority (63%) 
work five days a week or fewer. This cluster is  most strongly characterized by high levels of operational dependence or low autonomy at 
work. In general, they have limited discretion over their work situation: only 15% have the authority to dismiss other workers, and for 33%, 
it is difficult to take time off at short notice). 
132 Self-employed people in this cluster are predominantly working without employees or with a limited number of employees and on one site 
only. They are generally economically independent because they have several clients and most of them find it easy to attract new customers. 
They have discretion over their work situation, they find it relatively difficult to take an hour or two off for personal or family reasons. They 
are overrepresented in agriculture and commerce. 

 64 

 
 
 
 
                                                            
Source: Eurofound (2017) 

There  is  strong  heterogeneity  between  the  groups  along  a  number  of  dimensions  of  high 
relevance  for  the  present  initiative.  For  example,  nearly  all  the  self-employed  in  the  cluster 
‘employers’ did not become self-employed out of necessity whereas only around 60% of the 
self-employed in the cluster ‘vulnerable’ are not self-employed out of necessity. The degree 
of  being  comfortable  with  the  uncertainty  and  risks  associated  with  the  status  of  self-
employment  also  differs  markedly  across  the  groups.  While  more  than  90%  of  the 
‘employers’  and  close  to  100%  of  the  ‘stable  own-account  workers’  like  being  boss  and 
taking decisions, the same holds true for less than three quarters of the ‘vulnerable’ and only 
about 55% of the ‘concealed’.  

The clusters differ substantially with respect to their autonomy: Three quarters of ‘stable own-
account  workers’  have  the  authority  to  hire  or  dismiss  employees  while  the  shares  for 
‘employers’ and ‘small traders and farmers’ even exceed 90%. This only holds for below 20% 
of  the  ‘concealed’  and  around  30%  of  the  ‘vulnerable’  self-employed.  Likewise,  more  than 
90% of the ‘stable own-account workers’, ‘small traders and farmers’ and ‘employers’ have 
more than one client, compared to less than half of all ‘vulnerable’ self-employed. 

There  is  also  large  diversity  regarding  the  position  in  the  income  distribution  and  financial 
vulnerability. More than 60% of the ‘vulnerable’ are in the lowest income quintile, while this 
holds  for  only  around  10%  of  the  cluster  ‘employers’  and  20%  of  the  ‘small  traders  and 
farmers’.  Close  to  60%  of  ‘employers’  consider  themselves  financially  secure  in  case  of 
sickness. The other groups are more vulnerable, with only around 20% of ‘small traders and 
farmers’,  20%-30%  of  the  clusters  ‘concealed’  and  ‘vulnerable’  and  below  40%  of  ‘stable 
own-account workers’ being in the same situation. Looking at income levels alone does not 
give a sufficient picture of vulnerability in this respect. For instance among the ‘small traders 
and  farmers’,  almost  two-thirds  would  be  financially  insecure  in  case  of  sickness,  although 
incomes in this group tend to be at the higher end. 

1.2.  New forms of self-employment: dependent self-employment and bogus self-employment 

 65 

 
 
 
 
 
 
 
In  line  with  the  European  Court  of  Justice  rulings133,  the  status  of  worker  is  determined  by 
three  elements:  existence  of  remuneration  in  return  for  services;  existence  of  work  in  a 
relationship  of  subordination  where  the  employed  determines  the  choice  of  activity, 
remuneration and working conditions; and the existence of effective and genuine activity of 
economic value. Out of these three elements, the relationship of subordination allows to draw 
a  distinction  between  workers  and  self-employed  persons  and  the  most  specific  way  of 
defining  self-employment  is  the  absence  of  subordination  between  the  employer  and  the 
employees134.  

Given the characteristics associated with entrepreneurship – decision-making power regarding 
the business, financial autonomy and responsibility – the ‘self-employed with employees’ are 
considered  as  being  by  nature  self-employed.  The  category  of  ‘self-employed  without 
employees’  is  more  diverse  and,  in  some  ways,  ambiguous135.  The  group  of  economically 
dependent  workers  belongs  to  this  category.  To  be  categorised  as  an  independent  self-
employed  without  employees,  an  individual  should  work  as  an  autonomous  subcontractor, 
who  owns  his/her  means  of  production  and  works  independently  in  order  to  accumulate 
capital and serve several clients136.  

Thus, there are emerging work arrangements which are “in a grey area”, meaning that they do 
not easily fit into the traditional binary distinction between "employees" and the independent 
"self-employed”.  In  fact,  there  is  an  increase  in  formally  self-employed  work  relationships 
that are marked by both economic and personal dependence. Given that these workers have 
only  one  (main)  employer,  they  generate  the  whole,  or  at  least  a  substantial  part,  of  their 
income  from  this  work  relationship.  Economic  dependence  may  also  mean  that  the  worker 
takes (part of) the entrepreneurial risk without the trade-off in terms of employment security. 
Furthermore,  due  to  the  demands  of  their  'main'  employer,  the  entrepreneurial  possibilities 
associated  with  self-employment  are  also  rather  limited  or  absent  in  their  case.  These 
characteristics  form  the  category  of  the  dependent  self-employed  who  work  with  only  one 
client,  under  similar  conditions  as  employees,  but  without  the  rights  and  protection  that 
employees are entitled to under labour law, social protection rules and collective agreements. 
Dependent  self-employment  also  means  that  both  organisational  boundaries  and  the 
boundaries set by labour and social security law between employment and self-employment 
become  blurred137.  Indeed,  the  distinction  between  the  dependent  self-employed  and 
employees has important labour law, social protection and fiscal consequences: 

  dependent self-employed are responsible for their own work and therefore formally do 
not work under the authority and responsibility of the main contractor even if de facto 
they are economically dependent on one employer/customer; 

  access  to  social  protection  (e.g.  in  the  case  of  temporary  employment,  occupational 
accidents, early retirement etc.) is more restricted for the dependent self-employed138. 

133 Case C- 268/99, Case C-3/87, Case C-202/90, Case C-202/90. See also, to that effect, judgments in FNV Kunsten Informatie en Media, C-
413/13, EU:C:2014:2411, paragraph 35 and Allonby, C 256/01, EU:C:2004:18, paragraph 71. 
134 IZA (2013): Social protection rights of economically dependent self-employed workers. European Union. 
135 Eurofound (2013): Self-employed or not self-employed? Working conditions of 'economically dependent workers'. Dublin: Author. 
136  Thörnquist  (2015):  False  Self-Employment  and  Other  Precarious  Forms  of  Employment  in  the  ‘Grey  Area’  of  the  Labour  Market. 
International  Journal  of  Comparative  Labour  Law  and  Industrial  Relations,  2015,  31(4),  411-429.  Henceforth,  this  is  referred  to  as 
Thörnquist (2015). 
137 FIA (2015): Reaching out to Atypical Workers. Available online. 
138 Available online. 

 66 

 
 
 
                                                            
 

some  working  conditions  (wages,  working  time,  rest  periods  etc.)  are  governed  by 
collective  agreements  or  by  specific  legislative,  administrative  and  regulatory 
provisions that are not applicable to the dependent self-employed139. 

Therefore, the dependent self-employed are neither clearly separated from nor integrated with 
the  employer  they  contract  with.  Moreover,  despite  the  lack  of  data  which  would  allow  to 
easily distinguish between the traditional self-employed and the dependent self-employed, it 
is  estimated  that  approximately  15%  of  all  self-employed  are  economically  dependent 
workers  in  the  EU140.  Moreover,  there  is  evidence  that  the  biggest  difference  between 
dependent  self-employed  and  other  groups  of  self-employed  lies  in  their  financial  situation. 
Their households have a correspondingly higher level of difficulty making ends meet and they 
have the lowest level of job security, and the fewest opportunities for career advancement141. 
A Eurobarometer survey142 shows that 49% of respondents who had started up a business or 
were currently taking steps to start one, stated that they were doing so because they saw an 
opportunity  and  29%  were  doing  so  out  of  necessity,  i.e.  the  possibilities  for  regular 
employment were absent143.  

Moreover,  among  the  dependent  self-employed,  another  group  with  the  only  choice  of 
working on their own account because of a lack of job opportunities144 can be identified: that 
of the 'bogus self-employed'145.  

‘Bogus’ or ‘false’ self-employment refers to the phenomenon of workers who would usually 
meet the legal definition of an employee but instead are registered as self-employed146. In this 
case, the subordinate employment relation is disguised as autonomous work, usually for fiscal 
reasons, or in order to avoid the payment of social security contributions and thereby reduce 
labour  costs,  or  to  circumvent  labour  legislation  and  protection,  such  as  the  provisions  on 
dismissals147. 

The  OECD  has  described  the  bogus  (or  ‘false’)  self-employment  as  consisting  of  ‘people 
whose conditions of employment are similar to those of employees, who have no employees 
themselves, and who declare themselves (or are declared) as self-employed simply to reduce 
tax  liabilities,  or  employers’  responsibilities’.  This  category  is  particularly  used  in  labour-
intensive industries, such as construction, transport and the service sector148. 

There  are  several  factors  leading  to  'bogus'  self-employment.  One  is  that  in  almost  all 
countries  few  formalities  have  to  be  fulfilled  to  set  up  as  self-employed  and  the  forms  of 
bogus  self-employment  have  gradually  become  more  sophisticated149.  Relatively  restrictive 
national labour markets (i.e. highly regulated ones) and high non-wage labour costs are also 

139 Available online. 
140 Eurofound (2017): Exploring self-employment in the European Union, Publications Office of the European Union, Luxembourg. 
141 Eurofound (2013). 
142 Eurobarometer (2012): Entrepreneurship in the EU and beyond. 
143 Bögenhold, and Klinglmair (2017): One-person enterprises and the phenomenon of hybrid self-employment: evidence from an empirical 
study. Empirica (2017) 44: 383.. 
144 Studies show a negative correlation between the level of social benefit available to unemployed individuals and the concentration of low-
skilled self-employed, fortifying the idea that a certain kind of self-employment is due more to necessity than to personal free choice (CESifo 
DICE Report, 2016).  
145  Fondeville  et  al.  (2015):  Recent  changes  in  self-employment  and  entrepreneurship  across  the  EU.  Research  note  6/2015.  Publications 
Office of the European Union, Luxembourg. 
146 Hatfield (2015): Self-employment in Europe. IPPR. 
147 FIA (2015). 
148 Eurofound (2016): Exploring the fraudulent contracting of work in the European Union. Dublin: Author. 
149  Jorens,  and  Lhernould  (2010):  Europe  of  the  self-employed:  Self-employed  between  economic  freedom  and  social  constraints.  In  The 
Europe of the Self-employed, Proceedings. 

 67 

 
 
 
                                                            
factors creating 'bogus' self-employment150. From the point of view of the employers, it is a 
way  to  transfer  costs,  risks  and  responsibilities  to  the  workers  and  to  circumvent  collective 
agreements, labour laws, payroll taxes and social security contributions151. On the other hand, 
while,  in  general,  motives  for  people  accepting  a  working  engagement  as  dependent  self-
employed  could  include  time  flexibility  and  increased  autonomy,  together  with  further 
advantages  in  the  form  of  tax  benefits  and  lower  social  contributions,  in  the  case  of  'bogus' 
self-employment,  reasons  seem  to  be  related  only  to  their  economic  situation,  since  the 
characteristics of autonomy and flexibility are not maintained. 

2.  Non-standard work: temporary, part-time and new forms of employment  

Overall, the share of non-standard work in employment has increased over time. Using data 
for the EU28 and a longer available time series for the EU15, Figure A.10 shows that this has 
been the case especially for younger workers aged 25-39: in 1995, 23% of younger employees 
in the EU-15 had non-standard contracts. This proportion had increased to 32% for the same 
age group by 2016, implying that there has been a clear intergenerational component to this 
development. 

Figure A.10: Employees by type of contract and age, 1995, 2005 and 2016 

)

%

(

e
p
y
t

t
c
a
r
t
n
o
c

y
b
s
e
e
y
o
p
m
E

l

Temporary Part-time

Temporary Full-time

Permanent Part-time

5 

11 

4 

11 

3 

5 

2 

5 

4 

12 

3 

11 

2 

4 

3 

5 

2 

5 

14 

16 

15 

19 

21 

12 

13 

16 

17 

40

35

30

25

20

15

10

5

0

3 

8 

12 

1995

2005

2016

1995

2005

2016

2005

2016

2005

2016

25-39…

40-64…

25-39…

40-64…

Source: European Commission, ESDE 2017, p. 77. 

2.1.  Temporary employment 

In 2016, the proportion of employees aged 15–64 in the EU-28 with a fixed-term employment 
contract was 14.2% (Figure A.11). More than one in five employees in Poland  (27.5%) and 
Spain (26.1%) had a temporary contract. Among the remaining Member States, the share of 
employees working on a contract of limited duration ranged from 22.3% in Portugal, down to 
2% in Lithuania and 1.4% in Romania.  

150  European  Parliament  (2013):  Social  protection  rights  of  economically  dependent  self-employed  workers.  Publications  Office  of  the 
European Union, Luxembourg. 
151 Thörnquist (2015). 

 68 

 
 
 
 
 
 
                                                            
 
 
 
 
 
Figure A.11: Share of temporary workers in total employment (age 15-64), 2016 

30,0

25,0

20,0

15,0

10,0

5,0

0,0

RO EE

BG MT

LU BE HU EL

DK

FI

SE

SI

HR

ES

Sources: Eurostat 

Both  the  number  of  temporary  contracts  and  the  temporary  employment  rate  (number  of 
temporary as percentage of all employees) show a strong cyclical (and seasonal) pattern. Both 
decline  at  the  onset  of  the  recession  and  tend  to  increase  with  recovery  (and  pick  up  the 
“double dip” around 2010-11), as many new hires are on temporary contracts152. Indeed, over 
the  last  three  years  (2014-2016),  as  countries  emerged  from  the  crisis,  the  growth  in  the 
number  of  permanent  employees  has  exceeded  the  increase  in  the  number  of  temporary 
employees.  Thus,  in  the  year  preceding  the  third  quarter  of 2016,  the  number  of  employees 
with a permanent contract increased by 2.8 million (1.8%) in the EU-28, while the number of 
employees  with  a  temporary  contract  increased  by  420,000  (1.6%).  Similarly,  full-time 
employment  has  increased  faster  than  part-time  employment  for  nearly  three  years.  In  the 
years up to the third quarter of 2016, the number of full-time workers increased by 2.8 million 
(1.6%) while the number of part-time workers increased by 370,000 (0.9%). 

Denmark, Netherlands, Slovenia, Malta, Croatia and Poland show some appreciable increase 
in  the  temporary  rate  since  the  onset  of  the  recession  in  2008.  Spain,  Germany,  Latvia  and 
Lithuania show a significant post-recession decrease. Given Spain’s large share of temporary 
contracts in Europe, the decline there has held down the European rate over this period, and 
vice-versa for Poland. 

In  a  more  long-term  perspective,  a  clear  increase  in  the  share  of  workers  on  temporary 
contracts has been observed especially for younger workers (aged 25-39), see Figure A.12. At 
the same time, it is worth noting that women are more likely to work on temporary contracts 
than men, although the gap has been shrinking (Figure A.12).   

Figure A.12: Share of temporary workers in total employment (by age and gender, 
1995-2001 (EU-15) and 2002-2016 (EU-28) 

152 Eurofound (2017): Aspects of non-standard employment in Europe, Eurofound, Dublin. 

 69 

 
 
 
 
                                                            
20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0%

…
9
9
1

…
9
9
1

…
9
9
1

…
0
0
2

3
0
0
2

5
0
0
2

7
0
0
2

9
0
0
2

1
1
0
2

3
1
0
2

5
1
0
2

25-39: Women

25-39

25-39: Men

40-64: Women

40-64

40-64: Men

Source: European Commission (2017 ESDE), p. 79. 

Among temporary  employment, agency work is experienced as one of the more insecure of 
contractual  forms153.  This  is  characterised  by  a  particular  “triangular”  relationship,  where 
workers are hired by an entity (the temporary work or employment agency) and then re-hired 
out or assigned to perform their work at (and under the supervision of) a user firm. In 1999, 
when  this  form  of  employment  had  just  become  legally  permissible  in  most  of  Europe154, 
agency workers accounted for 1.2% of all employment in Europe. In 2015, it accounted for 
1.9%155.  The  highest  rate  was  in  the  UK  (3.8%),  followed  by  the  Netherlands  (3.0%)  and 
France  (2.1%).  The  lowest  rate  of  0.1%  was  in  Greece.  These  figures  are  rather  similar  to 
those from 1999, with the exception of Germany where the agency worker rate increased from 
0.7% to 2.4% of total employment. 

The  motives  for  employees  to  take  on  a  temporary  contract  are  primarily  non-voluntary. 
Given  the  option  of  two  identical  jobs,  one  open-ended  and  the  other  with  a  temporary 
duration, the Labour Force Survey shows that only around 12% report that they did not want a 
permanent job156.  

2.2.  Part-time employment 

Part-time work has grown for decades. This is due to the changing structure of the economy 
towards services and preferences for part-time work, not least related to the increase in female 
labour  force  participation.  The  proportion  of  the  EU-28  workforce  in  the  15–64  age  group 
reporting that their main job was part-time increased steadily: from 17.5% in 2007 to 19.5% 
by 2016, representing the type of non-standard employment that has undoubtedly grown since 
the  onset  of  the  recession.  Over  the  period  from  2007  and  2015,  there  was  a  widespread 
increase in the share of part-time workers, though it declined in Croatia, Lithuania, Romania 
and Poland157.  

153 European Working Conditions Survey (2016). 
154 Eurofound (2004): Temporary agency work in the European Union. Available online.  
155 World Employment Confederation (2017): Enabling work, adaptation, security and prosperity. 
156 One should treat this figure with some skepticism, as interview questions on motives can be open to many interpretations. Also as noted in 
'Recent  Developments  in  Temporary  employment:  employment  growth,  wages  and  transitions'  (Eurofound  2015),  responses  vary 
significantly over time and in several cases they are obviously unreliable. 
157 EU LFS 

 70 

 
 
 
 
                                                            
Figure A.13: Share of part-time workers in total employment (age 15-64), 2016 

60,0

50,0

40,0

30,0

20,0

10,0

0,0

BG HR

SK

LT

LV

PT

EE MT

ES

IT

IE

BE DK

AT

Source: Eurostat 

As  shown  in  Figure  A.13,  by  far  the  highest  proportion  of  part-time  workers  in  2016  was 
found in the Netherlands (almost 50%), followed by Austria, Germany, Denmark, the United 
Kingdom,  Belgium,  Sweden  and  Ireland.  By  contrast,  part-time  employment  is  relatively 
uncommon in Bulgaria (2%) as well as in the Czech Republic, Slovakia, Hungary and Croatia 
(between  4.8%  and  5.8%).  In  these  countries,  non-standard  employment  is  rare,  and  people 
may consider it to be an involuntary status.  

The incidence  of part-time work differs significantly between men  and women. Almost  one 
third (32%) of women aged 15–64 who were employed in the EU-28, worked on a part-time 
basis in 2015, a much higher proportion than the corresponding share for men (8.9%). 76.5% 
of  women  employed  in  the  Netherlands  worked  on  a  part-time  basis  in  2016,  by  far  the 
highest rate among EU Member States158.  

In  the most  recent  years, as  the labour  market improves, the part-time employment rate has 
declined  only  marginally,  thus  indicating  that  not  all  part  time  is  voluntary.  Self-reported 
involuntary  part-time  work  (defined  in  relation  to  the  response  in  the  LFS  survey  “Person 
could not find a full-time job”) increased from 22.4% of all part-time work to 29.1% between 
2007  and  2015159.  There  is  a  very  strong  association  between  national  labour  market 
performance  and  changes  in  the  share  of  involuntary  part-time  work.  Where  the 
unemployment rate has increased most, there is a strong likelihood that the involuntary part-
time share has also grown strongly. Greece, Spain and Cyprus are illustrative examples. The 
corollary is also true. The Member State with the most improved unemployment record over 
the period, Germany, is also the one with the sharpest decline in involuntary part-time share 
(Figure A.14)160. 

Figure A.14: Changes in involuntary part-time employment share and in unemployment 
rate 2008-2015. 

158 EU LFS 
159 EU LFS. 
160 Eurofound (2017). 

 71 

 
 
 
 
                                                            
Source: LFS as calculated in Eurofound (2017) 

Changes concern also the working hours. While women account for the majority of very low 
hours'  part-time  work,  the  male  share  has  grown  relatively  faster  since  1996  (from  1.5%  to 
2.8%  of  all  male  workers)  compared  to  the  female  share  (from  6.1%  to  6.6%  of  all  female 
workers).  Highest shares  were  recorded amongst  both  young workers (less  than 24 years of 
age) and workers above 64 years of age and it was in these groups, in particular the younger 
group, that the greatest growth in the share of very short hour part-time work was recorded. 

2.3.  New forms of work 

As in the case of the self-employed the available data do not allow to capture the variety of 
non-standard forms of employment present in the labour market, and, in particular, the new 
forms of work.  
Eurofound  (2015)161  distinguishes  three  categories  of  employer-employee  relationship: 
relationships between employers and employees involving either multiple employers for each 
employee,  one  employer  and  multiple  employees  or  even  multiple  employer-multiple 
employee  relationships;  provision  of  work  on  a  discontinuous/intermittent  basis  or  for  very 
limited periods of time; and networking and cooperation agreements involving self-employed 
persons, especially freelancers. 

On  the  basis  of  this  broad  categorization,  the  following  new  forms  of  non-standard 
employment were identified by Eurofound: 

  employee sharing, where a single worker is jointly hired by a group of employers to 
meet  the  HR  needs  of  various  companies,  resulting  in  permanent  full-time 
employment for the worker.  

 

 

job  sharing,  where  an  employer  hires  two  or  more  workers  to  jointly  fill  a  specific 
job, combining two or more part-time jobs into a full-time position; 

interim  management,  in  which  highly  skilled  experts  are  hired  temporarily  for  a 
specific  project  or  to  solve  a  specific  problem,  thereby  integrating  external 
management capacities in the work organisation; 

161 Eurofound (2015): New forms of employment. Dublin. 

 72 

 
 
 
 
                                                            
  casual  work,  where  an  employer  is  not  obliged  to  provide  work  regularly  to  the 

employee, but has the flexibility of calling them in on demand; 

 

ICT-based mobile work, where workers can do their job from any place at any time, 
supported by modern technologies; 

  voucher-based  work,  where  the  employment  relationship  is  based  on  payment  for 
services  with  a  voucher  purchased  from  an  authorised  organisation  that  covers  both 
pay and social security contributions; 

  portfolio  work,  where  a  self-employed  works  for  a  large  number  of  clients,  doing 

small-scale jobs for each of them; 

  crowd employment, where an online platform matches employers and workers, often 

with larger tasks being split up and divided among a ‘virtual cloud’ of workers; 

  collaborative employment, where freelancers, the self-employed or micro enterprises 
cooperate in some way to overcome limitations of size and professional isolation. 

In general, crowd work seems to be used as a supplement to total income. A survey conducted 
in the UK showed that in 2016 platform workers amounted to 4% of the employees, 25% of 
whom  reported  it  as  main  job162.  Another  survey163  implemented  in  the  UK,  Sweden, 
Germany, Austria and the Netherlands in the first two quarters of 2016 showed that between 
5%  and  9%  of  the  online  population  were  engaged  in  some  type  of  crowd  work164.  It  is 
usually a small supplement to total income165.  

Furthermore,  together  with  these  new  forms  of  employment,  a  variety  of  new  forms  of 
contracts has been recognised in Member States: 

 

'Civil law contracts for a specific task' there are different legal forms from a contract 
of employment and they are governed by the provisions of the Civil Code. They are 
particularly prevalent in Poland and commonly used when the employer does not plan 
to  employ  a  worker  under  an  employment  contract,  but  requires  the  performance  of 
certain activities or for some specified work to be completed.  

  Mini-job is a concept coined in Germany, which refers to employment contracts for 
earnings  of currently  up  to  EUR  450  per  month  with  reduced  income  tax  and  social 
security contribution rates and entitlements.  

 

'On–demand  work'  involves  a  continuous  employment  relationship  maintained 
between an employer and an employee where the employer has the option of calling in 
the employee as and when needed. There are employment contracts that indicate the 
minimum and maximum number of working hours, as well as so-called ‘zero-hours 
contracts’  that  specify  no  minimum  number  of  working  hours,  and  the  employer  is 
not obliged to ever call in the worker. 

162 CIPD (2017): To gig or not to gig? Stories from the modern economy. A nationally representative sample of 5,019 UK employed persons 
aged 18 to 70 was asked about the use of on-line platforms in the previous 12 months in December 2016.  
163 Huws et al. (2016): Crowd work in Europe: preliminary results from a survey in the UK, Sweden, Austria and the Netherlands. 
164 Although the sample has been weighted ex post to be representative of the national population as regards age, gender, region and working 
status, the results “cannot be generalized with complete confidence” to the entire population. 
165 For 45% (from 58% in Austria to 33% in Sweden) it made up only 10% or less of all income. 

 73 

 
 
 
                                                            
ANNEX 5: VISUALISATION OF THE PROBLEM TREE  

74 

 
 
 
 
ANNEX 6: INTERNAL DRIVERS 

This annex illustrates in detail the internal drivers described in section 2.2.2. The information 
in this section are based on ESPN synthesis and national reports on access to social protection 
for  people  in  non-standard  employment  and  in  self-employment  (2017),  as  well  as  on  the 
report  from  Brodolini  (2018,  forthcoming)  and  on  the  report  from  Open  evidence  (2018, 
forthcoming).  The  information  included  reflects  the  information  available  at  this  stage. 
Further  work  with  Member  States  will  be  undertaken  to  refine  the  picture.  Member  States 
where gaps were identified by experts are mentioned in the respective tables. However, there 
may be cases where gaps exist but have not been identified yet. Gaps in formal coverage and 
effective  coverage  are  analysed  for  non-standard  workers  and  for  the  self-employed.  The 
annex indicates the branches in which major gaps of coverage by social security systems have 
been identified for non-standard workers and for the self-employed, and it shows as well the 
branches for which voluntary schemes are in place for the two groups.  

The problems of transferability, transparency and behavioural biases are described for the two 
groups together. Regarding effective coverage, four criteria with a time dimension have been 
identified  as  obstacles  on  the  basis  of  the  information  provided  by  the  ESPN  experts:  long 
waiting  periods,  minimum  qualifying  periods,  duration  of  benefits  and  minimum  working 
period.  Moreover,  Member  States  in  which  transferability  of  accumulated  social  security 
rights across different social security schemes is not possible have been identified, as well as 
Member  States  in  which  there  a  lack  of  information/transparency  regarding  social  security 
schemes.  

Finally,  problems  of  social  security  coverage  have  been  also  explored  in  relation  to  low 
enrolment rates observed in case of voluntary schemes. 

1.  Regulatory biases 

This annex explored gaps in the following branches of social security:  

(a) unemployment benefits;  
(b) sickness benefits; 
(c) maternity and equivalent paternity benefits; 
(d) invalidity benefits; 
(e) old-age benefits; 
(f) benefits in respect of accidents at work and occupational diseases. 

An initial, broader mapping166 had shown that problems are concentrated in these areas. 

1.1. Gaps in formal coverage 

For the purpose of this Impact Assessment, gaps in formal coverage are identified in the cases 
in which people in non-standard employment or self-employment are not covered mandatorily 
by  schemes  in  a  given  social  security  branch  and  do  not  even  have  the  possibility  to 
voluntarily adhere to them. Other than these regulatory deficiencies, in the case of voluntary 
coverage,  behavioural  choices  may  lead  to  people  excluding  themselves  from  formal 
coverage, which may be problematic. The sections below discuss how behavioural biases may 
play  a  role  in  such  decisions  and  provide  overview  tables  on  the  situation  of  formal  and 

166 See ESPN (2017). 

75 

 
 
 
                                                            
effective  coverage  across  the  Members  States  and  across  all  branches  of  social  security. 
Indeed the extent of gaps in formal coverage differs significantly between the various types of 
non-standard workers and the self-employed, as well as between branches of social security. 

Non-standard  workers  are  usually  formally  covered  by  social  security  in  the same  way  as 
standard  workers.  However,  in  some  Member  States  specific  categories  of  non-standard 
employees are not formally covered for some or for all branches of social security. The main 
groups for whom this is the case in a significant number of countries are casual and seasonal 
workers,  as  well  as  trainees  and  apprentices.  Furthermore,  there  are  a  number  of  national 
categories to which restrictions apply in the concerned Member State, such as 'marginal part-
timers'  and  'marginal  freelancers'  in  Austria,  'mini-jobbers'  in  Germany  and  'civil  law 
contracts for a specific task' in Poland. Table A.2 gives a detailed overview of access gaps in 
Member States by social security branches and by category of non-standard work167.  

Table A.2 - Lack of formal coverage to social security for people in non-standard 
employment 

Freelance 

Apprentices 

Trainees 

Vocational 
trainees 

Social policy area/types 
of employment 

Casual 
workers 

Seasonal 
workers 

Unemployment 
benefits 

RO,  HU, 
MT, LT 

BG,  RO, 
LV,  HU, 
MT, LT 

National 
specificities 
ATa, CZb, 
DEc, PLd, 
SKe 

Sickness benefit 

HU,  LT, 
LV, RO 

HU,  LT, 
LV, RO 

CZb, SId 

Maternity benefit 

LT, RO 

BG,  LT, 
LV, RO 

CZb, 
PLd, 
UKh 

BG, FR 

and 

Accident 
occupational 
injuries 

RO,  HR, 
LT 

BG,  LT, 
LV, RO 

CZb, ESf 

Old  age/survivors' 
pensions 

MT, LT 

BG,  HU, 
RO, LT 

CZb,  
HUg, 
LUg, 
MTh, 
PLd 
ATa, PLd 

BE,  EL,  HR, 
MT, NL, PL 

BE,  HU,  NL, 
PL 

BE, MT 

FR, 
EL, 
IT, 
LT, 
MT,  NL, 
PL, RO 
DK, 
FR, 
HU,  LT, 
NL, PL 
FR,  HU, 
IT, LT 

DK, 
EL, 
FR, HU, PL 

EL, 
HU, IT 

FR, 

BE, HR, MT 

FR, 
IT, 

EL, 
HU, 
LT, MT 

HU, LT 

Invalidity 
Note:  a)  Marginal  part-timers;  b)  Agreement  to  perform  a  job;  c)  Mini-jobbers;  d)  civil  law  contracts;  e) 
employees  on  "work  agreement"  with  irregular  income;  f)  domestic  workers;  g)  on  call  jobs;  h)  temporary 
agency work. 

HU, LT 

Estimates  for  the  size  of  the  identified  groups  in  the  concerned  Member  States  are  not 
available  in  some  cases.  See  Box  A.2  for  available  figures.  As  regards  the  situation  of  the 
platform workers, recent research have tried to estimate the size of the platform economy and 
the extent to which it provides access to social security (see Box A.3).  

Box A.2 – Extent of some new forms of employment facing gaps in formal coverage168 

Form of 

Extent 

167Information in the table is based on ESPN (2017). 
168 The information is taken from the case studies commissioned for this study, see Annex 15.  

76 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
employment 

Mini-jobber 
(DE) 

Among the 7.6 million mini-jobbers, 4.9 million have mini-jobs as a main job, the remaining 
ones as a second job. 

Mini-jobbers are a heterogeneous group. Pensioners, housewives and students and pupils are 
important sub-groups among the mini-jobbers having a main job as main occupation, see 
graph below. 

4 

12,3 

11,4 

11,2 

24,5 

18,8 

Full-time workers
Unemployed
In education
Other

17,8 

Part-time workers
In retirement
Homemaker

Civil law 
contracts (PL) 

Due to lack of data on civil law contracts, it is difficult to assess precisely the number of 
people working under civil law contracts. According to LFS data, in 2016 there were 510,000 
people working under civil law contracts (in their main job) which is equivalent to 3.1% of 
total employment in Poland. Among them, 429,000 people worked solely under a contract of 
mandate, 36,000 people worked solely under a contract to perform specified work, 22,000 
people worked under another type of a civil law contract (such as a managerial contract), and 
22,000 combined various types of civil law contracts. Data from personal income tax records 
published by the Ministry of Finance show that, in the last few years, approximately 1 million 
people has been earning income only on the basis of civil law contracts. The tax records also 
show that the number of such people has doubled since the early 2000s. 

Casual workers 
(RO) 

As compared to 2011, when ca. 170.5 thousand day-labourers were registered, by 2016 their 
number increased 4.7 times, reaching 803.6 thousand persons. Their share in the total labour 
force expanded from 1.2% in 2011 to 6.7% in 2016. The number of legal entities using day-
labour also increased from 4.8 thousand in 2011 to 24.1 thousand in 2015. 

Box A.3 – Social protection of platform workers169 

According to a recent survey of 1200 platform workers, lack of access to social protection is a major concern for 
them. Nearly 70% of all platform workers report not having access to schemes that cover maternity, childcare, 
and housing benefits. 63% do not have access to unemployment benefits, whereas a significant proportion of 
platforms workers had been unemployed in the past five years. In the same vein, around half of platform workers 
do not have access to old age schemes (56%), to disability schemes (60%) and to sickness benefits (47%).  

Lack of social protection was found to be especially severe among platform-dependent workers, i.e. those who 
got more than half (50%) of their personal earnings through completing online micro tasks. They represented a 
quarter (25%) of the sample. However, gaps in social protection coverage were also significant among platform 
workers who have another form of employment and source of income: they were also significantly at risk of not 
having access to either unemployment benefit (61.2%) or sickness benefit (46.1%). These findings tend to 
suggest that the corresponding individuals' "other job" was also a non-standard form of employment, offering 
limited access to social protection. 

169 Forde et al. (2017): The Social Protection of Workers in the Platform Economy, report requested by the European Parliament's Committee 
on Employment and Social Affairs. 

77 

 
 
 
 
 
                                                            
A key issue affecting the access of platform workers to social security is their classification as workers, self-
employed or other hybrid legal statuses170.  

The self-employed as a group lack formal coverage regarding key branches of social security, 
notably  regarding  unemployment  benefits,  accidents  and  occupational  injuries  as  well  as 
sickness benefit in a number of Member States. In some Member States, different rules apply 
for certain categories of self-employed (e.g. in Germany, Greece, Finland, France and Italy) 
Notably, the self-employed generally have no mandatory formal coverage and cannot opt-into 
voluntary  schemes  either  for  unemployment  benefits  in  eleven  Member  States171,  although 
some  specific  categories  of  self-employed  can  be  covered  on  a  voluntary  basis  in  some  of 
them172 (Table A.3). The self-employed are also not formally covered by sickness benefits in 
three Member States173. Finally, the self-employed are also not covered in case of accidents 
and  occupational  injuries  in  ten  Member  States,  although  some  specific  categories  of  self-
employed  can  be  mandatorily  covered174.  It  is  also  worth  noting  that  in  many  branches  and 
Member States, the self-employed have voluntary rather than mandatory formal coverage (see 
next  section),  which  may  lead  to  only  a  limited  proportion  of  them  being  members  of  such 
schemes. 

Table A.3 - Lack of formal social security coverage for the self-employed 

Social security branch 

Unemployment benefits 

Sickness benefit 

Accident and occupational injuries 

Member State 
BEa,  BG,  CY,  DE,  FR,  IE,  IT,  LV, 
MTb, NL, UKb 
ELa,IEb, ITa 
BE,  BG,  CY,  CZ,  IE,  LT,  LV,  NL, 
SK, UK 

Note:  The  table  reports  in  which  branches  and  in  which  Member  States  at  least  one  sub-group  of  the  self-employed  is 
excluded from formal coverage in the sense that they have no mandatory coverage and cannot opt-into voluntary schemes 
either. 
a) Only one or more sub-groups of the self-employed are not formally covered. 
b)  In  these  Member  States  only  means-tested  benefits  are  available  to  the  self-employed  while  they  are  excluded  from 
contributory schemes. 

Voluntary coverage 

170 Forde et al. (2017): The Social Protection of Workers in the Platform Economy, report requested by the European Parliament's Committee 
on Employment and Social Affairs. 
171 Malta and UK are included in this list since here the  self-employed are  only covered by  means-tested non-contributory benefits, while 
they are excluded from contributory schemes. 
172 This is the case of dependent self-employed and liberal professions in Italy. It should be noted that the Belgian situation is rather specific: 
while there is no possibility to be covered by unemployment insurance, there is a compulsory social insurance in the case of bankruptcy, the 
amount of which may be higher than the unemployment benefit paid to former salaried workers. In Germany, anyone who provides home 
nursing care for a dependent or is self-employed for at least 15 hours per week may make voluntary unemployment insurance contributions 
Moreover, there are tax-funded unemployment benefit II (basic income support for job seekers) applies to all persons of working age who are 
capable of work and who are not able to cover their living costs from their own resources 
173  Ireland  is  included  in  the  list  because  the  self-employed  are  only  covered  by  means-tested  non-contributory  benefits,  while  they  are 
excluded from contributory schemes. 
174  In  the  Netherlands,  only  the  dependent  self-employed  are  covered  by  accidents  at  work  and  occupational  injuries  benefits;  in  Spain, 
insurance  for  accidents  at  work  or  occupational  diseases  is  voluntary  for  the  self-employed  and  compulsory  only  for  ‘dependent  self-
employed'  and  mobile  traders;  in  the  Czech  Republic  people  working  under  'agreement  to  perform  work/job'  are  not  entitled  or  are  only 
partially covered in case of accidents and occupational injuries; in Greece liberal professions and those providing services paid by receipt of 
business expenditure). 

78 

 
 
 
 
 
 
                                                            
In several Member States, adherence to certain social security schemes is not mandatory for 
the  self-employed  and  some  categories  of  non-standard  workers,  but  is  available  on  a 
voluntary  basis  (see  Tables  A.4  and  A.5).  Voluntary  schemes  can  be  supplementary  to  the 
existing  mandatory  schemes,  or  they  can  apply  only  to  categories  of  workers  which  are  not 
covered by the main schemes. 

Table A.4: Voluntary social security schemes for people in non-standard employment 

Social 
employment 

policy 

area/types 

of 

Opt-in 

Opt-out 

Unemployment benefits 

LVa, PTa, SEa, DK, FIa 

Sickness benefit 
Maternity benefit 
Accident and occupational injuries 
Old age/survivors' pensions 
Invalidity 
Note:  a)  supplementary  schemes;  b)  if  income  below  a  certain  threshold;  c)  For  specific 
categories of non-standard employees. 

ATb, PLc  
ATb, PLc 
PTa 
ATb, LTa, PTa, ROc 
ATb, PTa, ROc 

DEb, NLc 

Table A.5: Voluntary social security schemes for the self-employed 

Social 
employment 

policy 

area/types 

of 

Opt-in 

Unemployment benefits 

Sickness benefit 

Maternity benefit 

Accident and occupational injuries 

AT,  DEc,  DK,  ES,  FIa,  FRc, 
ROc, SEa, SK  
ATc,  BEa,  BG,  CZ,  DK, 
EEc,  IE,  IT,  LUc,  FIa,  NL, 
PL  
ATc, BG, CZ, DKa, LT, PL, 
ROc 
ATc, DE, DK, ESc, FI, FR, LT, 
PT, RO 
ATc, BE, DEc, DK, ELa, FIa, 
LUc, NL 
ATc, DEc, NL 

Old age/survivors' pensions 

ATb,  IEb,  FI,  PT,  ROb,  SKb, 
UKb 
ATb, IE, PT, ROb, SKb, UKb 
Invalidity 
Note: a) additional schemes; b) if income below a certain threshold, c) for specific categories 
of the self-employed. 

Opt-outc 

PT, RO 

ATb, PT, ROb, SKb, UKb 

ATb, PT 

For Member States where voluntary schemes exist for all the self-employed or some groups, a 
low rate of enrolment can generally be observed. For instance, 5% of the self-employed are 
estimated  to  be  covered  by  sickness  benefits  in  Austria,  15.37%  in  Czech  Republic,  and 
almost no self-employed in Romania. As for old-age and survivors' pension schemes, 46% of 
self-employed  are  estimated  to  be  covered  in  Belgium,  only  650  self-employed  in  the 
in  Romania.  Voluntary  schemes  for 
Netherlands  and  20%  of 
unemployment  are  also  estimated  to  be  under  used:  in  Austria  only  0.02%  of  the  self-
employed  is  covered;  in  Spain  less  than  one  quarter;  in  Finland  20%  of  the  self-employed 
without  employees  and  10%  of  the  self-employed  with  employees;  in  Ireland  10037  self-

the  self-employed 

79 

 
 
 
 
 
 
 
 
 
 
 
employed  enrolled in  a voluntary  scheme175;  and  in Romania only  less than  1%  is enrolled. 
Voluntary  schemes  for  invalidity  also  result  in  low  formal  coverage:  only  25%  of  self-
employed were estimated to be covered in 2013 in the Netherlands (against 30% in 2006) and 
in Romania only 20%176. 

1.2. Gaps in effective coverage and transferability 

People  in  non-standard  employment  or  in  self-employment  may  be  mandatorily  formally 
covered or have the legal possibility to opt for access without, however, achieving effective 
coverage  in  the  sense  of  de  facto  being  able  to  build  and  take  up  adequate  entitlements  to 
benefits.  

This  may  be  due  to  rules  governing  the  contributions  and  entitlements  which  are  more 
difficult to meet for people in non-standard employment or self-employment. This may be the 
case  because  the  requirements  are  stricter  for  these  groups  than  for  standard  employees. 
Additionally,  it  may  in  some  cases  also  be  more  difficult  for  them  to  fulfil  identical 
requirements  to  those  for  standard  employees.  For  instance,  temporary  employees  are  more 
frequently  affected  by  unemployment,  making  it  more  difficult  for  them  to  accumulate 
necessary qualifying periods for unemployment insurance177.  

Based  on  a  more  comprehensive  mapping  exercise,  the  criteria  most  frequently  used  by 
experts and thus used to identify gaps in effective coverage are: 

Long  waiting  period,  i.e.  particularly  long  length  of  time  between  the  occurrence  of 

Duration  of  benefits,  i.e.  the  length  of  time  during  which  the  individual  receive  the 

- 
the risk and the receipt of the benefit. 
Minimum  qualifying  period,  i.e.  the  minimum  period  that  people  in  non-standard 
- 
employment and self-employed have to contribute to a scheme in order to start receiving the 
benefit. 
- 
benefit, in case this differ from that of standard workers. 
- 
Minimum working period, i.e. if the person is required to have worked a minimum of 
hours/months/years in order to be eligible to receive the benefit in case of need. This criterion 
is  stricter  than  the  minimum  qualifying  period,  since  a  person  can  be,  for  instance, 
unemployed, but have the possibility to still contribute to the system, while when a minimum 
working period is required the person not employed nor in self-employment is not eligible for 
the benefit. 

In addressing these issues, it is important to recognise that some of these criteria play a key 
role in the design of social security systems (see Box A.4 below).  

Another problem affecting effective coverage relates to the income assessment base. This can 
be problematic in the case of high heterogeneity of rules among schemes which can determine 
a lower level of entitlements.  

175 This data for Ireland refers to 2015, and it has to be noticed an improvement with respect to 2008 when only 2547 self-employed where 
adhering to a voluntary scheme for unemployment. 
176 ESPN (2017): National reports and synthesis report. 
177 European Commission (2017): Employment and Social Developments in Europe review, Luxembourg: Publication Office of the European 
Commission, p. 73. 

80 

 
 
 
 
 
 
 
 
 
                                                            
Finally, a lack of transferability when professional mobility (including between  employment 
and  self-employment)  implies  changing  social  security  schemes  can  also  determine  gaps  in 
effective coverage, as it does not allow the person to preserve the accumulated entitlements or 
make already fulfilled time thresholds count in the new scheme. 

Box A.4 - Effective coverage and incentive compatibility of social security schemes 

The analysis above has identified several features of social security systems and their rules which may prevent 
non-standard employees and the self-employed from having effective coverage, notably including minimum time 
requirements such as waiting periods and qualifying periods.  

It  is  important  to  highlight  that  these  features  may  fulfil  an  important  role  in  the  design  of  social  security 
systems. They may help dealing with the information asymmetries between insurance clients and providers that 
complicate or impede the provision of such insurance in private markets178. Indeed the economic rationale for 
providing social insurance is closely linked to the existence of such information problems.  

For instance, a lack of information about characteristics of a possible insurance taker which influence the ex-ante 
cost  of  providing  insurance  may  hamper  the  functioning  of  insurance  markets  (adverse  selection).  State 
intervention  in  the  form  of  mandatory  membership  is  one  solution  to  such  problems.  Similarly,  a  lack  of 
information  about  the  insured  person's  behaviour  after  taking  out  insurance  which  influences  the  cost  of 
providing the insurance may limit the provision of such insurance (moral hazard). For instance, unemployment 
insurance may not be provided in private markets when insurers cannot observe the efforts of the unemployed to 
re-enter employment. 

Some  of  the  obstacles  identified  with  regard  to  effective  coverage  may  in  fact  be  crucial  in  ensuring  that 
(prospective  and  actual)  members  of  social  security  schemes  have  incentives  to  comply  by  the  system's  rules 
(including  truthfully  revealing  their  private  information).  For  instance,  setting  a  qualifying  period  in 
unemployment insurance is a standard means of preventing self-selection. Both the insurance provider and the 
insurance taker know relatively little about what might happen in the future (after the qualifying period), whereas 
over a shorter time horizon, the insurance taker has an information advantage about issues influencing his risk 
and thereby the potential cost for the insurance, including e.g. the financial status of the firm. 

EU policies to address these obstacles cannot specify levels for standards or thresholds. Such detailed provisions 
are  in  the  competence  of  Member  States  and  will  inter  alia  depend  on  the  national  institutions  and  broader 
cultural and socio-economic context. Rather, the aim is to identify unduly high obstacles which are not justified 
by  policy  objectives,  notably  including  avoiding  abuse  of  the  system.  This  entails  scrutinising  existing 
differences  in  rules  between  standard  employees  on  the  one  side  and  people  in  non-standard  employment  and 
self-employed  on  the  other. Likewise, where  the  same  rules  applied  to all groups lead  to  poorer  outcomes  for 
people outside standard employment, there might be scope to better tailor the rules to the situation of the specific 
groups while remaining compatible with policy objectives.  
In this context, it is interesting to note that the Council of Europe's European Code of Social security179 mentions 
thresholds should not be more demanding than necessary to avoid abuse. It does not define what levels would be 
compatible with this. Instead, in the context of corresponding reporting the supervision mechanism of the Code 
would be allowed to determine whether or not certain national stipulations are excessive. 

Rules related to time thresholds 

As shown in table A.6, despite being formally covered, people in non-standard employment 
can lack effective coverage because the same rules and conditions as the standard employees 
apply  also  to  people  in  non-standard  employment,  without  taking  into  consideration  the 
specificities  of  non-standard  contracts  and  disadvantaging  people  working  under  this 
employment  relationship.  Long  waiting  periods  to  receive  sickness  benefits  have  been 
identified as an issue in two Member States and to maternity benefits in five Member States. 
A minimum qualifying period has been identified as an issue in case of unemployment in six 

178 See for instance N. Barr (2012): The economics of the welfare state. Oxford University Press, for more details.  
179 See online.  

81 

 
 
 
 
                                                            
Member  States,  in  three  countries  concerning  old-age,  in  six  countries  concerning  sickness 
benefits,  in  one  in  case  of  maternity  and  in  two  concerning  invalidity.  Minimum  working 
periods have been identified as an issue in four Member States for unemployment benefits, in 
two  for  old-age  benefits,  in  one  for  sickness  benefits,  maternity  benefits  and  invalidity. 
Finally, the duration of unemployment benefits is shorter than for standard employees in one 
Member State. 

Table A.6: Time thresholds limiting effective coverage for the non-standard workers 

policy 
of 

Waiting period 

Social 
area/types 
employment 
Unemployment 
benefits 

Sickness benefit 

BE, EE 

Minimum 
qualifying 
period 
SK,  CZ,  PL,  EE, 
HU, ES 
IT,  PL,  AT,  CZ, 
BG 

Maternity benefit 

AT,  CZ,  HU, 
MT, HR, IT 

BG 

and 

Accident 
occupational injuries 
Old 
pensions 
Invalidity 

age/survivors' 

IT, NL, PT 

CZ, PT 

Duration 
benefits 

of 

Minim  working 
period 

BG 

EL, PT, SE, HU 

PT 

PT 

NL, IT 

CZ 

Effective  coverage  can  be  problematic  also  for  the  self-employed  despite  being  formally 
covered,  because  the  eligibility  conditions  or  rules  are  stricter  than  for  standard  workers. 
Waiting periods can be longer for the self-employed than for standard employees in case of 
unemployment in one Member State, and in eight Member States for what concerns sickness 
benefits. Or, the same waiting period can apply to self-employed and dependent employees. 
However,  the  latter  are  entitled  to  sick  pay  (i.e.  they  continue  to  receive  their  salary  by  the 
employers),  which  is  not  applicable  to  the  self-employed  for  the  nature  of  their  working 
relationship, creating  an effective difference in  treatments. A  minimum  qualifying period  in 
order to receive unemployment benefits has been identified as an issue in four Member States, 
in  two  for  old-age  and  survivors'  pensions  and  in  one  for  invalidity  benefits.  Minimum 
working  periods  have  been  identified  as  an  issue  in  three  Member  States  concerning 
unemployment benefits, in two for old-age and survivors' pensions, in one for maternity and 
for  invalidity  and  in  one  for  accidents  at  work  and  occupational  injuries.  The  duration  of 
benefits is shorter for the self-employed with respect to standard employees in one Member 
State for unemployment, in two Member States for sickness benefits, in five Member States 
for maternity and in one for accidents at work and occupation injuries (see Table A.7). 

Table A.7 - Time thresholds limiting effective coverage for the self-employed 

Social 
area/types 
employment 
Unemployment 
benefits 

policy 
of 

Waiting period 

Minimum 
qualifying 
period 

Duration 
benefits 

of 

Minimum 
working period 

PL 

EL, FI, LU, SK 

EL, BG 

EE, PT, SE 

82 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sickness benefit 

Maternity benefit 

PT,  SI,  BE,  EE, 
FR, HR, PL, SE 

and 

Accident 
occupational injuries 
Old 
pensions 
Invalidity 

age/survivors' 

AT, PT 

EE,  EL,  FR,  BE, 
MT 

EL 

DK 

EL 

RO, UK 

DE 

RO, UK 

DE 

1.3. Gaps in transferability  

The  risk  of  gaps  in  effective  coverage  for  people  in  non-standard  employment  or  self-
employment does not  only depend on the difficulties to fulfil eligibility criteria, but also on 
problems related to the transferability of social rights across schemes. People in non-standard 
employment  and  in  self-employment  can  have  problems  in  transferring  their  rights  from  a 
scheme  to  another,  especially  in  Member  States  with  highly  fragmented  social  security 
schemes. 

For  our  purpose,  transferability  relates  solely  to  transfers  across  employment  statuses  and 
sectors, not across risk areas. This means that transferability is to be considered in situations 
where a person changes employment status (notably between dependent employment and self-
employment)  or  economic  sector  and  is  covered  by  a  social  security  scheme  (scheme  A) 
before  and  by  a  different  one  (scheme  B)  after  the  change,  and  where  eligibility  for  a 
corresponding benefit (in scheme B) or the level thereof depends on past contribution history 
(length and/or contribution levels).  

Lack of transferability is an issue for those branches of social security for which a minimum 
qualifying periods is required (this is especially the case of old-age pensions' schemes – see 
box A.5). In these cases, transferability can formally not be foreseen (i.e. there are no rules or 
laws  which  foresee  this  possibility),  or  there  can  be  a  problem  related  to  effective 
transferability if the conditions are unfavourable (e.g. particularly high administration burden 
or costs). For example, in Italy, it is possible to accumulate the pension contributions made to 
different  funds  for  receiving  a  single  pension  benefit.  It  is  also  possible  to  transfer  the 
contributions  made  through  the  working  life  to  a  single  fund,  but  this  may  be  particularly 
expensive  for  the  claimants  of  the  benefit.  In  France,  a  note  of  the  Pension  Advisory 
Council180  has  shown  that,  even  if  in  principle  supplementary  pension  schemes  are 
transferable, in practice, transferability only operates for contracts that obey to the same fiscal 
and social contributions treatment.  

 Table A.8: Difficulties in transferability of social security rights  

Social  policy  area/types  of 
employment 
Unemployment benefits 

Not  foreseen by the 
law  
EL, PT 

Sickness benefit 

AT, PL, PT 

High costs 

Others 

IT 

IT 

180 See the report available online.  

83 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                            
AT, PL, PT 
PL, PT 

Maternity benefit 
Accident  and  occupational 
injuries 
Old 
pensions 
Invalidity 
Note:  the  information  have  been  collected  by  MISSOC  experts  for  21  out  28  EU  Member  States.  Belgium, 
Bulgaria, Denmark, France, Romania, Sweden and Slovakia are not included. 

age/survivors' 

FR 

PL 

IT 

IT 

IT 

IT 

Box A.5 - Transferability of pension rights 

Old-age pensions are accrued over several decades, therefore being able to retain and follow their pension rights 
through multiple labour market transitions can be both challenging and crucial for individuals' social protection 
in  old  age.  Transferability  and  transparency  of  pension  rights  are  important  elements  of  improving  pension 
outcomes for persons with diverse careers. 

Statutory  pension  systems  can  streamline  pension  insurance  throughout  career  changes  by  crediting  all 
contributions  paid  by/for  an  individual  to  a  single  account,  irrespective  of  the  economic  status  or  the  type  or 
duration  of  contract  under  which  they  were  paid.  This  is  already  the  case  in  the  majority  of  Member  States, 
though some public pension systems retain parallel regimes for different economic statuses.  

Occupational pension rights tend to be more fragmented than public pensions, as individuals may be required to 
join  a  new  scheme  each  time  they  change  jobs.  EU  law  does  not  require  the  transferability  of  occupational 
pension  rights;  however  encourages  Member  States  to  improve  it181.  Following  a  Call  for  Advice  from  the 
Commission,  EIOPA  aimed  to  gather  information  on  the  transfers  of  assets  within  the  countries  and  across 
borders182.  The  available  information  suggests  that  at  least  in  several  Member  States183  domestic  transfers  of 
pension rights between occupational pension funds are a relatively widespread practice184. 

Wherever  a  transfer  is  not  possible,  the  pension  rights  of  former  workers  should  be  preserved,  e.g.  through 
indexation,  on  par  with  the  rights  of  active  scheme  members,  as  provided  for  in  the  Supplementary  Pension 
Rights directive185. 

1.4. Adequacy of the benefits 

While lack of adequacy of benefits may be problematic for all forms of employment, it can be 
even more challenging for people in non-standard employment or in self-employment, which 
can  "experience  higher  […]  adequacy  risk"186.  This  may  importantly  reflect  income 
differences between groups, addressing which is beyond the scope of the current initiative, but 
can also be related to i) for the self-employed, the income assessment base taken into account 
for the calculation of benefits; ii) the length of contributory history; and iii) different rules for 
the calculation of benefits for different forms of employment (e.g. benefits can be defined as a 
lump-sum rather than in relation to earnings, as for salaried employment). Finally, differences 
in  adequacy  between  groups  could  arise  if  at  progressivity  and  reductions  in  social 
contributions for low-income groups do not apply equally to workers and the self-employed. 

181 Directive 2014/50/EU of the European Parliament and of the Council of 16 April 2014 on minimum requirements for enhancing worker 
mobility between Member States by improving the acquisition and preservation of supplementary pension rights, recital 20. 
182 Final Report on Good Practices on individual transfers of occupational pension rights, EIOPA, 2015. 
183 AT, BE, DK, ES, NL, PL, PT. 
184 During the EIOPA mapping exercise, it became apparent that quantitative data on transfers were not readily available in a large number of 
Member States. 
185 Directive 2014/50/EU directly applies only to outgoing workers who change jobs across borders, however, all Member States have opted 
to extend the same legal treatment to all workers who leave an occupational pension scheme. The Directive does not apply to self-employed 
persons. 
186 For a review of the case studies, see Annex 15. 

84 

 
 
 
 
 
 
 
 
 
                                                            
Income assessment base 

Income assessment bases play a salient role regarding the accrual of entitlements to benefits 
for the self-employed. On the one hand, if the self-employed person pays social contributions 
on a very low income assessment base, s/he will receive a low level of benefits. On the other 
hand, if the reference base is too high, s/he may not be able to pay the required contributions. 
These  issues  may  be  related to  the way  of  calculating  the  income  base  or  reference  income 
periods.  Moreover,  requirements  for  advanced  payments  may  also  hinder  the  self-employed 
person’s ability to build up entitlements. Income assessment bases calculated on long previous 
periods  of  earnings  may  not  take  into  account  the  fluctuations  characterising  incomes  from 
self-employment.  This  kind  of  estimation-based  system  may  hinder  the  ability  of  the  self-
employed  to  pay  social  contributions  if  their  current  income  decreases  below  the  estimated 
one. At the same time, the freedom to choose (within certain limits) the level of contributions 
in some schemes can lead to low adequacy of benefits (see Box A.6 for an example).  

Box A.6 – Dependent self-employment – an example from Spain187 

In  Spain,  the  figure  of  economically  dependent  self-employment  (trabajador  autónomo  económicamente 
dependiente,  TRADE)  was  regulated  in  2007  in  the  Self-employed  Workers’  Statute  (Ley  del  Estatuto  del 
Trabajador  Autónomo,  LETA).  A  self-employed  worker  is  considered  to  be  economically  dependent  if  the 
income from a single client accounts for at least 75% of his/her total income188. However, the self-employed in 
Spain,  including  the  category  of  dependent  self-employed  face  adequacy  problems  as  the  amount  of  all  cash 
benefits, in particular for pensions, that TRADEs are entitled to is determined by the contribution base and the 
monthly  contribution.  In  this  sense,  attention  should  be  drawn  to  the  fact  that,  as  opposed  to  employees,  self-
employed  and  TRADE  can  choose  the  contributions  they  want  to  pay  to  the  Social  Security.  Each  self-
employed worker determines their contribution base and the monthly contributions. 

Overall,  figures  on  the  contribution  base  chosen  by  self-employed  show  that  most  of  them  are  selecting  the 
minimum  base  in  order  to  pay  lower  contributions.  According  to  Social  Security  Statistics  on  Self-employed 
(2017,  2nd  quarter),  86%  of  the  self-employed  workers  chose  the  minimum  contribution  base.  For  the  self-
employed  with  employees,  the  percentage  of  workers  choosing  the  minimum  contribution  base  is  only  a  bit 
lower (81%). 
For TRADE, the percentage of workers choosing the minimum contribution base is even higher (91% in the 3rd 
quarter of 2017. Self- Employed Workers ‘RETA scheme’). 

As social security is closely linked to the contribution bases, these lower contributions paid by self-employed, 
including TRADE, leads to lower levels of protection and, especially, lower pensions, with an increased risk of 
poverty rates. 

According  to  the  Social  Security  Statistics,  in  September  2017  self-employed  received  an  average  monthly 
pension of €711.13 compared to 1,211.57 for employees under the General Social Security Scheme. Thus, self-
employed pensioners receive, on average, €500 less than employees. 

Contributory history 

Contribution histories can matter not only for effective coverage (via minimum requirements 
for  their  length,  see  the  section  above)  but  also  for  the  adequacy  of  benefits  in  some  social 
security branches. For instance, in some Member States the time profile of replacement rates 
in unemployment insurance depends on the contribution history. At the same time, the latter is 

187 The information in this box is based on the "Case study on economically dependent self-employment (TRADE)". For a review of the case 
studies, see Annex 15. 
188 Article 11, paragraph 1 of the Self-employed Workers’ Statute. 

85 

 
 
 
 
                                                            
very much linked to the form of employment of the individual (e.g. full-time vs part-time or 
temporary vs open-ended contracts). 

Calculations  of  replacement  rates  for  individuals  with  the  OECD  tax  benefit  model  for 
unemployment benefits as well as housing and family benefits illustrate the major role of the 
contribution  history  in  determining  the  amount  of  benefits  and  their  evolution  over  time  in 
some  Member  States  (see  Table  A.9  below).  For  instance  in  Belgium  an  individual  who 
contributed  one  year  will  have  a  total  resulting  replacement  rate  at  the  18th  month  of 
unemployment  which  is  24.8  percentage  points  lower  when  compared  to  an  individual  who 
contributed five years. In some Member  States the gap is large already after two months of 
receiving  the  benefits  (i.e.  Bulgaria,  Lithuania,  Hungary,  Romania  and  Slovakia).  Shorter 
contribution histories are likely to characterise workers on temporary contracts, to the extent 
that they also face more frequent interruptions by unemployment spells.  

Table  A.9:  Replacement  rate  for  unemployment,  housing  and  social  assistant  benefits. 
Comparison 5 vs 1 year of contribution, 2016 

5y 

6th 
month 

2nd 
month 

12th 
month 

18th 
month 

1y 

6th 
month 

2nd 
month 

12th 
month 

18th 
month 

BE 

BG 

CZ 

DK 

DE 

EE 

IE 

EL 

ES 

FR 

HR 

IT 

LV 

LT 

LU 

HU 

MT 

NL 

AT 

PL 

PT 

RO 

SI 

SK 

87.8% 

87.8% 

81.8% 

81.8%  BE 

87.8% 

87.8% 

81.8% 

57.0% 

76.5% 

76.5% 

15.2% 

15.2%  BG 

30.6% 

15.2% 

15.2% 

15.2% 

77.2% 

56.3% 

48.6% 

48.6%  CZ 

77.2% 

56.3% 

48.6% 

48.6% 

84.5% 

84.5% 

84.5% 

84.5%  DK 

84.5% 

84.5% 

84.5% 

84.5% 

59.0% 

59.0% 

59.0% 

41.3%  DE 

59.0% 

59.0% 

41.3% 

41.3% 

61.3% 

49.0% 

40.6% 

40.6%  EE 

61.3% 

49.0% 

40.6% 

40.6% 

72.3% 

72.3% 

72.3% 

73.2% 

IE 

72.3% 

72.3% 

72.3% 

73.2% 

40.1% 

40.1% 

40.1% 

22.3%  EL 

40.1% 

40.1% 

7.8% 

22.3% 

77.3% 

77.3% 

54.4% 

54.4%  ES 

77.3% 

30.3% 

30.3% 

30.3% 

68.2% 

68.2% 

68.2% 

68.2%  FR 

68.2% 

68.2% 

68.2% 

47.5% 

73.4% 

36.7% 

31.5% 

31.5%  HR 

73.4% 

31.5% 

31.5% 

31.5% 

73.5% 

69.8% 

56.0% 

42.2% 

IT 

73.5% 

69.8% 

56.0% 

42.2% 

68.8% 

51.6% 

36.9% 

36.9%  LV 

68.8% 

51.6% 

36.9% 

36.9% 

74.3% 

49.3% 

24.4% 

19.5%  LT 

24.4% 

24.4% 

24.4% 

19.5% 

84.0% 

84.0% 

84.0% 

61.9%  LU 

84.0% 

84.0% 

84.0% 

61.9% 

67.7% 

18.5% 

18.5% 

18.5%  HU 

18.5% 

18.5% 

18.5% 

18.5% 

53.2% 

53.2% 

53.7% 

53.7%  MT 

53.2% 

53.2% 

53.7% 

53.7% 

71.2% 

66.4% 

66.4% 

66.4%  NL 

71.2% 

66.4% 

66.4% 

66.4% 

55.0% 

55.0% 

51.9% 

51.9%  AT 

55.0% 

51.9% 

51.9% 

51.9% 

56.9% 

52.1% 

52.1% 

33.4%  PL 

56.9% 

52.1% 

52.1% 

33.4% 

75.0% 

75.0% 

67.5% 

43.5%  PT 

75.0% 

75.0% 

23.5% 

23.5% 

34.0% 

34.0% 

10.6% 

10.6%  RO 

28.1% 

28.1% 

10.6% 

10.6% 

82.5% 

68.6% 

47.3% 

47.3%  SI 

82.5% 

47.3% 

47.3% 

47.3% 

62.5% 

62.5% 

24.1% 

24.1%  SK 

24.1% 

24.1% 

24.1% 

24.1% 

86 

 
 
 
 
 
 
 
 
 
 
 
 
FI 

SE 

UK 

71.6% 

68.0% 

68.0% 

68.0%  FI 

71.6% 

68.0% 

68.0% 

68.0% 

73.5% 

65.0% 

65.0% 

61.1%  SE 

73.5% 

65.0% 

65.0% 

61.1% 

51.6% 

51.6% 

51.6% 

51.6%  UK 

51.6% 

51.6% 

51.6% 

51.6% 

Source: European Commission, elaborations on the basis of the OECD tax benefit model. 

Box A.7 – Adequacy of pensions for the self-employed 

The self-employed are characterised by high income inequality and high income poverty risk during working life 
(three times that of employees) but also relatively higher assets189. SHARE survey data190 allow measuring the 
impact of self-employment on retirement income and living standards by comparing the situation of retired self-
employed191 to that of retired employees. 

Retired self-employed have lower incomes than retired employees in almost all of the 19 countries where a 
comparison is available192 (Figure A.15)193. The income gap, together with higher income inequality194, leads to 
substantially higher monetary poverty for retired self-employed. Their at-risk-of-poverty (AROP) rate is around 
twice as high as that of retired employees on average195. 

Figure A.15: Median equivalised disposable income by former work type (a), and AROP (b) by former 
work type, 2017 

Source: SHARE (provisional data); EU* does not include Ireland, the Netherlands and the UK. Sample sizes in 
Bulgaria, Latvia, Lithuania, Portugal, Romania and Slovakia do not allow distinguishing between retirees. 

Different definitions of benefits for different forms of employment 

In  some  Member  States  many  self-employed  may  receive  lower  benefits  compared  to  an 
employee with the same earnings because benefits are set at different levels according to the 
form of employment.  
Cases identified by experts196 include that in Belgium, the amounts of sickness benefits paid 
to the self-employed are equal to the minimum amounts paid to white-collar employees after 

189 See also Section 2.3.1. 
190 Survey of Health, Ageing and Retirement in Europe (SHARE). Data source: SHARE wave 7, 2017. 
191 For the purposes of this comparison, "retired self-employed" are defined as retirees who have spent 50% or more of their working careers 
as self-employed. 
192 Comparison available for AT, BE, HR, CY, CZ, DK, EE, FI, FR, DE, EL, HU, IT, LU, MT, PL, SI, ES, SE. Sample sizes in BG, LV, LT, 
PT, RO, SK do not allow for an income comparison. Survey excluded IE, NL, UK. 
193 The highest income gaps can be observed in Luxembourg, Denmark and France, and in eight out of the 19 countries the gap is over 20 
percent. Only in Hungary and Estonia retired self-employed enjoy (slightly) higher incomes than retired employees. 
194 The S80/S20 ratio is almost twice as high among retired self-employed as among retired employees. 
195 The largest gaps are in Denmark, Poland and Malta. Only in the Czech Republic and Estonia the self-employed have lower AROP rates. 
196 See Annex 6. The tables are based on the information provided by ESPN and MISSOC experts. 

87 

 
 
 
 
 
 
 
 
 
                                                            
six months of sickness. As a result, the adequacy of sickness benefits in cash is lower for the 
self-employed  than  for  standard  workers.  Moreover,  projections  show  a  large  decline  in 
replacement rates for the self-employed by 2040. In 2010, a self-employed worker had a gross 
replacement rate of 77.2% and the rate for a salaried worker was 73.7%. In 2040, the figures 
would be respectively 47.3% for self-employed and 61.7% for employees197.  

In  Denmark, the self-employed receive lower unemployment benefit  than people in salaried 
employment, with a shorter period of receipt of benefits. In Finland, on average, an employee 
earning  €2,500  would  get  a  monthly  unemployment  benefit  of  €1,500  (contribution-based), 
whereas the basic monthly allowance for the self-employed, with the same earnings, would be 
€697.  

In  Finland,  compensation  in  the  case  of  a  work  accident  would  be  about  €2,500  for  the 
employee and €1,750 for the self-employed, or if the person is not eligible for income-related 
benefits, the universal minimum allowance would be approximately €622 a month.  

1.5. Lack  of  transparency  of entitlements and user-friendly information  related to  social 

security 

A further aspect that should be taken into account when dealing with the problem of lack of 
social  security  coverage  for  people  in  non-standard  employment  and  in  self-employment 
concerns the issue of transparency and complexity of administrative procedures. The lack of 
easily accessible and clear information about rights and obligations relating to social security 
can  hamper  a  clear  understanding  of  working  conditions  and  future  risks.  This  may  be  of 
particular  relevance  for  people  in  non-standard  employment  and  self-employment  who  may 
face  more  frequent  transitions  and/or  be  covered  by  different  set  of  rules.  This  situation  is 
often produced by the complexity of social security schemes and the lack of easily accessible 
information systems, and is potentially compounded by the limited representation of the self-
employed  and  non-standard  workers  in  trade  unions.  A  recent  study  identifies  as  causes  of 
non-take-up of social benefits the inaccessibility and complexity of the procedures, the slow 
assessment, and the unawareness of people concerning benefits, entitlements and application 
procedure198. 

Table A.10: Lack of information regarding social security schemes 

Social  policy 
employment 

area/types 

of 

Generic information 

Personalised information (based 
on a case) 

Overview of rights 
and 
responsibilities 

National 
Institution locator 

Unemployment 
benefits 

benefit, 
Sickness 
Health,  maternity, 
sickness 

UK 

HR 

HR, DK, UK 

Overview of rights 
and 
responsibilities 

BE,  BG,  HR,  CY, 
CZ,  DK,  FI,  EL, 
HU,  IT,  LT,  MT, 
SK, ES, SE, UK 
AT,  BG,  HR,  CY, 
CZ,  DK,  FI,  EL, 
HU,  IT,  LT,  MT, 
NL, SK, ES, UK 

Simulation (with 
parameters you 
enter or select 
online) 
BE,  BG,  HR,  CY, 
EE, FR, EL, IT, LV, 
LU,  MT,  PL,  PT, 
RO, SI, SE 
BE,  BG,  HR,  CY, 
EE,  DK,  EL,  HU, 
IE,  IT,  LV,  LU, 
MT,  PL,  PT,  RO, 

197 ESPN (2017). 
198 Eurofound (2015), Access to social benefits: Reducing non-take-up, Publications Office of the European Union, Luxembourg. 

88 

 
 
 
 
 
 
                                                            
Old  age/survivors' 
pensions 

EL, MT 

EL, MT 

AT,  BG,  HR,  CY, 
CZ,  FI,  DE,  EL, 
HU,  LT,  LU,  MT, 
SK, ES, SE, UK 

ES, UK 

BE,  BG,  HR,  CY, 
EE,  IT,  LV,  LU, 
MT, PT, SE 

Table A.10 above199 provides a mapping about the availability of information regarding key 
social  security  systems  in  the  Member  States.  Generic  information  about  social  security 
schemes is provided in most Member States, for instance via dedicated websites, although the 
information may not always be available broken down by employment status or contract. By 
contrast,  the  table  reflects  a  wide-spread  lack  of  transparency  regarding  personalised 
information, both regarding an overview of rights and obligations and the possibility to obtain 
information through online simulation tools. Such information is only available in about half 
of  the  Member  States.  Additionally,  Box  A.8  provides  a  more  detailed  overview  regarding 
transparency in relation to pension rights.  

Box A.8 - Transparency of pension rights 

While all Member States have put in place legislative provisions that ensure the right to information about the 
rules  governing  pensions  and,  increasingly,  the  state  of  individual  entitlements,  the  approach  and  level  of 
provided information varies significantly from country to country.  

Better  transparency  and  easy  ways  to  access  information  about  entitlements  earned  in  different  economic 
statuses can help individuals manage their careers and build up adequate pension rights more easily. All Member 
States have put in place legislation granting the right to information about pension rules and, increasingly, the 
state of individual entitlements. While some make it available from the early stages of working life, others only 
start  providing  it  closer  to  pensionable  age.  Some  Member  States200  pro-actively  circulate  annual  pension 
statements to all socially insured persons, while others provide it less often, and some do it only upon request201. 
In  most  Member  States,  socially  insured  persons  are  entitled  to  individual  information  about  the  prospective 
pension amount, while some202 communicate two or more scenarios of the prospective retirement income. 
EU  legislation  on  occupational  pensions203  provides  that  both  current  and  former  scheme  members  have  the 
right  to  information  about  the  value  and  treatment  of  their  rights.  However,  to  former  scheme  members 
information has to be provided only upon request. In practice, individuals may struggle to identify the pension 
fund associated with a former job, let alone keep track of their entitlements. 

To  help  individuals  follow  their  fragmented  pension  rights,  about  half  of  Member  States  have  already  set  up 
pension  tracking  services,  online  platforms  giving  users  one-stop  access  to  information  about  their  various 
pension rights, with more under way. The scope of schemes covered by tracking services varies, including some 
that  bring  together  information  about  all  pillars  of  the  pension  system204.  Online  platforms  can  also  provide 
additional tools such as on-line pension calculators205, allowing interested users to project the eventual impact of 
different career developments on their future benefits. 

A recent survey from  Open Evidence shows the level of awareness of social security rights 
across  people  in  different  types  of  employment  (Figure  A.16)206.  In  general,  the  share  of 

199  The  table  is  based  on  results  from  an  unpublished  Feasibility  study  on  a  European  Mobility  Portal  on  Social  Security  (EMPSS) 
commissioned by DG Employment. 
200 DE, NL, PL, SE. 
201 BG, HR, LU, LT, UK. 
202 DE, FR, NL, PL, SE. 
203  Directive  2014/50/EU  and  Directive  (EU)  2016/2341  of  the  European  Parliament  and  of  the  Council  of  14  December  2016  on  the 
activities and supervision of institutions for occupational retirement provision (IORPs). 
204 DK, EE, SE. 
205 FI, LT, SE, SI, SK. 
206 OpenEvidence (forthcoming). 

89 

 
 
 
 
 
                                                            
people  unaware  of  their  coverage  is  significantly  higher  among  people  which  are  not  in 
standard employment. In general, it is 7% among full-time open ended employees, but 18% 
among own-account self-employed. Maternity benefits seems to be the ones for which people 
are more aware despite the status and the type of employment.  

Figure A.16: Share of respondents unaware of their social security coverage, by type of 
employment 

25%

20%

15%

10%

5%

Unemployed

Full-time,
open-ended

Part-time,
open-ended

Full-time,
temporary

Part-time,
temporary

Entrepreneur Self-employed

Don't work,
looking for a
job

Unemployment benefits

Maternity/Paternity benefits

Old-age benefits

Sickness benefits

Invalidity benefits

Accidents/occupational disease benefits

Source: Open Evidence 

Invalidity  and  accidents  at  work  and  occupational  injuries  benefits  seem  to  be  the  most 
problematic schemes  in  terms of transparency for  non-standard  workers, followed by old-
age pensions' rights and unemployment benefits. 15% of temporary full-time workers are not 
aware  of  whether  they  have  coverage  regarding  sickness  benefits,  while  the  percentage  is 
lower in case of part-time (both open-ended and temporary). 16% of temporary part-time also 
seems unaware of whether they have coverage with respect to unemployment benefits (while 
the share both for open-ended part-time and temporary full-time workers is 13%).  

Awareness concerning coverage regarding accidents at works and occupational injuries, and 
invalidity  benefits  is  scarce  also  among  the  self-employed  (21%  for  the  self-employed 
without  employees  and  18%  for  the  entrepreneurs  are  not  aware  of  their  entitlements).  The 
share of those declaring to be unaware of whether they are entitled to old-age pensions is also 
high in the case of self-employed: 19% for the self-employed without employees and 17% for 
the  entrepreneurs.  Lack  of  awareness  is  also  detected  concerning  unemployment  benefits 
(again  the  percentage  of  self-employed  that  doesn't  know  if  it  is  entitled  to  unemployment 
benefits is higher for the self-employed without employees, 17%, than for the entrepreneurs, 
14%). 

90 

 
 
 
 
 
 
2.  Behavioural biases 

In  the  case  of  voluntary  access  to  social  security  schemes,  it  is  individuals'  behaviour  and 
choice  that  determine  whether  they  have  formal  coverage  or  not.  A  number  of  factors  can 
drive the decision not to adhere to systems, including whether coverage is already available 
through the first job in the case of voluntary access in the second job, the family context and 
private wealth accumulation which provide alternative means of coping with risks, as well as 
the individual's assessment of future risks facing them. This section explores how behavioural 
biases  may  contribute  to  low  coverage  rates  observed  in  social  security  systems  under 
voluntary access.  

Aside  possible  financial  disincentives  influencing  take  up  in  voluntary  schemes,  individual 
preferences can also play a significant role in the way people adhere to existing social security 
schemes.  

Individual's  intertemporal  distribution  of  consumption  could  be  called  myopic  when  the 
allocation of consumption to the present does not take sufficiently into account possible future 
risks.  The  tendency  may  be  attributable  to  an  erroneous  foresight,  or  to  a  well-grounded 
optimism  on  the  future,  or  to  the  fear  that  what  has  been  promised  for  tomorrow  might  not 
materialise207.  Researchers  estimate  that  correctives  for  inadequate  savings  due  to  myopia 
could raise individuals’ lifetime welfare to an extent equivalent to almost an additional year’s 
worth of income208. Already in 1958, Samuelson found that individual myopia may produce 
suboptimal saving rates. 

Myopic  behaviour  is  increasingly  identified  by  the  academic  literature  to  be  a  significant 
determinant of individual choices and is thus considered as a rationale for mandatory social 
security.209 Especially concerning protection against longevity risk, workers are forced to save 
for  retirement  in  order not  to  spend  their  accumulations  without  sufficient  consideration  for 
the future and thus end up in poverty.  

Myopia can also limit the voluntary enrolment in social security schemes by people in non-
standard  employment  and  by  the  self-employed.  Myopia  can  worsen  individual  judgment 
about future social risks and protection needs. Without comprehensive and clear information, 
individuals could prefer to forgo or reduce contributions when this possibility is allowed210.  

Some results of the recent survey funded by the Commission can be interpreted as indication 
that  a  significant  share  of  individuals  can  have  this  kind  of  myopic  preferences,  not  giving 
enough importance to future risks (Figure A.17; for a full overview of the survey results see 
Annex 16). 

Figure A.17: Importance of getting prepared for retirement now by current main 
employment status 

207 Pollock (2001): Environmental economics. 
208 Laibson (1997): Golden Eggs and Hyperbolic Discounting. The Quarterly Journal of Economics 112 (2): 443–77. 
209 Barr (2012): The Economics of the Welfare State. Oxford university press. 
210  The  decision  not  to  adhere  to  a  voluntary  scheme  can  be  also  driven  by  financial  reasons  beyond  individual  preferences,  in  particular 
when non-standard employees and the self-employed  with irregular and low revenues cannot afford to pay social contributions associated 
with enrolment in a voluntary scheme. 

91 

 
 
                                                            
Very important

Fairly important

Slightly important

Not important at all

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended
Don't work, looking for a job
Unemployed

Source: Open Evidence 2017 

33% 
35% 

27% 

31% 

25% 

33% 

27% 

32% 

37% 

39% 

41% 

38% 

37% 

40% 

42% 

39% 

20% 
14% 
23% 
23% 

26% 

18% 

21% 
17% 

10% 
12% 
9% 
9% 
12% 
9% 
10% 
11% 

Individual preferences and behaviour also play a role in the assessment of the income base: 
the  way  in  which  the  income  assessment  base  is  calculated  can  act  as  a  disincentive  to 
properly contribute or to legally declare the income. Where the rules for declaration of income 
are  less  stringent,  or  where  the  individual  has  the  option  to  (legally)  choose  what  level  of 
income to be assessed upon, individuals may present the same myopic attitudes and erroneous 
foresight and lead them to under-report their present income. This under-reporting of income 
and  the  corresponding  underpayment  of  contributions  may  prevent  effective  coverage  or 
reduce  adequacy  (e.g.  Bulgaria,  Hungary,  Estonia,  Lithuania,  Latvia,  Romania,  and 
Slovakia)211. For example, in Romania, due to both high contributory rates and the method of 
calculation  of  the  assessment  base  only  few  self-employed  contribute  to  social  insurance. 
Indeed, the self-employed represent the 17.6% of employed people, but 90% of them are not 
covered  for  old-age  pensions,  invalidity,  sickness  or  maternity  benefits  because  of  under-
insurance212.  

211 Under-declaration of income could be related to informal work (e.g. Bulgaria, Estonia, Hungary, Lithuania, Latvia, and Romania). 
212 As mentioned, sickness and unemployment insurance are voluntary in Romania, while pension and health insurance are compulsory for 
earnings  exceeding  the  minimum  insurable  threshold; this  represents  35%  of the  average gross  salary  at  the  national  level  per  month  (i.e. 
592€). 

92 

 
 
 
 
 
                                                            
ANNEX 7: OVERVIEW OF RECENT REFORMS IN MEMBER STATES 

Member 
State 

Relevant Reforms 

Austria  introduced  several  reforms  aimed  at  increasing  the  coverage  of  public  social 
insurance concerning self-employed and people in non-standard employment.  

  Extension of social protection for non-standard workers 
         In  the  second  half  of  the  1990s  a  first  wave  of  measures  was  decided  to  (partly) 
integrate so-called “new self-employed” and “freelance contracts” into social insurance 
and for people in marginal part-time employment the possibility to opt-in to health and 
pensions  insurance  got  introduced.  This  option  the  facto  creates  a  very  low-cost 
opportunity  to  obtain  health  insurance  plus  times  of  pension  insurance.  At  the  same 
time regulations on marginal part-time employment got reformed so that income from 
such contracts, in the case of multiple jobholders, has to be added to other income from 
dependent  employment  or  Freelance  Contracts.  And  once  the  lower  earnings  limit  is 
met, income from such contracts leads to coverage by health and pensions insurance, 
with  related  insurance  contributions  to  be  paid.  Furthermore,  as  from  January  2008, 
freelance  contractors  are  covered  by  unemployment  insurance  and  the  severance  pay 
scheme and since then they also have the right to receive sick-pay from the employer. 

  Extension of social protection for self-employed 
         Regarding  the  measures  to  foster  the  transition  between  unemployment  and  self-
employment, in Austria the level of support provided during the first months of  self-
employment  corresponds  to  that  of  the  applicable  unemployment  benefit  or 
unemployment assistance/subsistence allowance, including any family supplements. 
         Paradigm  shift  has  been  identified  in  Austria  where  new  self-employed  have  been 
included in pension, health and work accident schemes since 2000. The self-employed 
registered with the Chamber of Commerce (the vast majority of all the self-employed) 
are  compulsorily  insured.  Since  January  2009,  the  self-employed  can  opt-in  to 
unemployment  insurance
.  Recent  reforms  aim  at  addressing  the  issue  of  partial 
access  to  entitlements  to  sickness  benefits  by  extending  social  protection  to  the  self-
employed.  Further  on,  Austria  has  distinguished  the  'dependant  self-employment'  by 
introducing specific provisions to extend some protection. 

213

         In  some  countries,  even  if  the  self-employed  are  compulsorily  covered  by  sickness 
protection,  they  are  subject  to  much  longer  waiting  periods  than  salaried  workers.  In 
order to tackle this issue, the self-employed in Austria have a right to opt into insurance 
covering this waiting period.  

  Reducing legal conflicts about self-employed 
         As  a  step  taken  to  deal  with  dependent  self-employment,  in  2006  Belgium  adopted 
new legislation on the nature of labour relations to ensure legal security and to fight the 
phenomenon of bogus employment. 

  Transferability of rights and entitlements 
       Mechanisms allowing a person to include contribution periods of previous employment 

in the calculation of unemployment benefits. 

Austria 

Belgium 

213 However, given the rather strong “principle of equivalency” (i.e. the link between duration and amount of contributions paid and the level 
of social transfers from social insurance) within the Austrian system of social insurance outcomes in terms of social security and social 
inclusion for these groups tends to be problematic more often than for “normal” employees. The principle of equivalency quasi re-produces 
inequality of earned income, whereby self-employed and people in non-standard employment are more often affected by in-work poverty 
than normal employees. However, to the best of our knowledge, no detailed assessments are available about the concrete financial 
implications of these reforms. Integrating these forms of employment into social insurance made them more costly for employers, by this 
reducing the incentives to replace standard employment by non-standard forms of employment. However, marginal part-time employment 
and New Self-employment continued to rise irrespective of (partial) coverage by social insurance. In the case of Freelance Contracts new 
regulation, getting effective as from 1st January 2008, inter alia integrating them into unemployment insurance, appears to have had a 
mitigating effect, coming along with an overall reduction of such contracts. However, it may be the case that Freelance Contracts got 
increasingly substituted by New Self-employment, which continued to rise.      

93 

 
 
 
 
 
 
 
 
                                                            
  Extension of social protection for self-employed 
         When  it  comes  to  reforms  aimed  at  extending  social  security  for  the  self-employed, 
both  'parametric'  and  'paradigmatic'  reforms  have  been  identified  in  Belgium.  As 
changes  in  some  parameters  of  the  scheme,  measures  introduced  include  greater 
flexibility  to  take  up  maternity  leave,  and  more  favourable  conditions  for  self-
employed  carers  of  dependant  persons.  Recently,  a  number  of  measures  have  been 
adopted  to  improve  the  social  status  of  self-employed  persons  as  well  as  to  promote 
female entrepreneurship. For instance, as of 1 January 2017, maternity leave has been 
expanded by another 4 weeks (12 weeks in total).  

         Further  on,  the  process  of  harmonisation  started  in  the  2000s.  Due  to  social  policy 
measures  focused  on  developing  a  fully-fledged  social  status  for  self-employed 
persons,  there  has  been  a  net  improvement  in  the  adequacy  of  some  benefits.  For 
instance, the level of the minimum old-age pension for self-employed persons shows a 
strong increase over the last decade, reaching the equal level to the one for employees 
in August 2016. The self-employed have been included in compulsory state insurance 
for  most  social  risks:  healthcare  and  sickness  benefits,  long-term  care,  invalidity 
benefits, maternity benefits, family benefits, old-age pensions, survivors’ pension. 
Regarding  the  'bogus  self-employment',  in  2006  a  new  legislation  on  the  nature  of 
labour  relations was  adopted in order  to ensure legal  security and  to  fight  effectively 
against  the  phenomenon.  Moreover,  concerning  defining  and  assessing  the  reference 
income for social security contribution payments, the Belgian ESPN experts highlight a 
best practice: a balance between paid contributions and spending for the self-employed. 
In  particular,  the  contributions  paid  by  the  self-employed  amounted  to  some  5%  of 
total social contributions received, and social security spending for the self-employed 
amounted  to  6  to  7%  (estimates  in  absolute  terms  show  that  the  amount  received 
corresponds to the amount paid)214.  

Bulgaria 

No initiatives identified. 

Cyprus 

No initiatives identified. 

Czech 
Republic 

No initiatives identified. 

Germany 

  Reducing legal conflicts about self-employed 
         Germany has introduced a special, hybrid legal category for dependent self-employed. 
Due  to  such  legal  status,  dependent  self-employment  enjoys  both  more  formal  and 
actual protection. It is important to note that dependent self-employed have also been 
subject to compulsory insurance for old-age pension since 1999. 

         Germany  has  set  up  the  scheme  to  foster  the  transition  between  unemployment  and 
self-employment by introducing the Enterprise Subsidy which can be made available to 
unemployed  persons  who  still  have  at  least  150  days’  entitlement  to  unemployment 
benefit on entering self-employment.  

         It  might be important to point out that white paper entitled ‘Work 4.0’ published by 
the  Minister  of  Labour  and  Social  affairs  from  2016  contains  a  range  of  suggestions 
and  proposals  for  the  shaping  of  working  conditions  and  the  provision  of  adequate 
financial and social protection in this context of change. These proposals include old-
age provision for all groups of self-employed, shaping transitions between dependent 
employment  and  self-employment.    The  following  points  should  be  mentioned: 
promotion  of  education,  further  training  and  qualification;  shaping  of  the  transitions 
between  the  phases  of  working-life  and  between  dependent  employment  and  self-
employment;  step-by-step  development  of  the  unemployment  insurance  towards 
employment insurance; old-age provision for all groups of self-employed.  

  Limiting abuse of atypical employment 
         The  Grand  Coalition  has  taken  steps  to  restrict  the  widespread  abuse  of  fixed-term 
employees and temporary agency workers. In particular, policy makers are confronted 
with  the  task  of  combating  and  controlling  bogus  self-employment  and  undeclared 
work. 

  Extension of social protection for self-employed 

214 However, concerns are been expressed by Belgian experts on issues for the future financing of social security regarding this practice. 
Namely, the current contribution rates for the self-employed decrease as income rises, and there is an annual ceiling on contributions. 

94 

 
 
 
 
 
                                                            
The coalition agreement of 07 February 2018 foresees to include the self-employed in the 
public  old-age  pension  system  on  a  voluntary  basis,  implemented  via  opt-out  clauses,  as 
well as an obligation for this group to make provisions for old-age.  
In Denmark, the general system of unemployment insurance is undergoing a major reform 
in 2017. In 2015 Unemployment Insurance Commission identified potentially problematic 
issues for self-employed, non-standard and entrepreneurs and has  suggested establishing a 
better  system  for  non-standard  workers  and  better  income  insurance  for  entrepreneurs. 
Further  on,  the  Commission  saw  a  need  to  simplify  and  reduce  the  amount  of 
documentation for the self-employed. One proposal considered by the Commission was to 
allow  a  company  to  close  down  temporarily  for  economic  reasons  or  because  of  seasonal 
changes  to  then  re-open  when  things  have  improved.  A  special  task  force  was  set  up  in 
March  2016  to  come  forward  with  recommendations  on  how  to  simplify  and  bring  the 
scheme into line with the general unemployment insurance scheme by 2017. 

  Extension of social security for self-employed 
         In September 2016, the Liberal government proposed to introduce mandatory pension 
saving  for  persons  without  sufficient  savings,  though  not  with  any  particular  view  to 
the self-employed. The proposal was to introduce compulsory saving for these groups 
with  insufficient  savings  (defined  as  less  than  six  percent  of  gross  income),  starting 
with  0.25%  of  income  in  2018,  increased  to  2%  of  income  in  2025215.  Mandatory 
minimum  pension  savings  for  everybody  would  be  innovative  and  resembles 
compulsory fire insurance for home owners/occupiers and third party insurance for car 
drivers. The Ministry of Finance estimates that this measure would reduce the number 
of  individuals  with  insufficient  savings  from  (around)  750,000  to  707,000  by  2025. 
However,  this  was  opposed  by  representatives  for  self-employed  who  preferred  to 
decide  between  themselves  when  and  how  much  to  save.  Due  to  lack  of  general 
political  support  for  the  reform-package  of  which  it  was  part  the  proposal  was  not 
adopted  and  is  not  part  of  programme  for  the  new  coalition  government  between  the 
Liberals, Conservatives and the Liberal Alliance announced on 27 November 2016. 

  Reducing legal conflicts about self-employed 
         Estonian  employment  policy  and  social  protection  system  and  corresponding 
legislation  presume  clear  distinction  between  self-employed  persons  and  employees, 
and  passive  income  (i.e.  dividends)  and  active  income  (i.e.  wages,  salaries). 
Enforcement of this distinction is also the major measure that controls different types 
of employment and extend social protection coverage. In this regard, it is important to 
point  out  the  role  of  judiciary  bodies  in  Estonia.  As  reported  by  the  Estonian  ESPN 
expert,  the  Supreme  Court  delivered  three  significant  decisions  (in  2014  and  2015) 
which  supported  the  position  that  in  some  cases,  service  agreements  between 
companies can be considered a fraudulent form of (self-) employment, for the purpose 
of  avoiding  employment  taxes,  including  social  security  contributions.  The  decisions 
stipulated  that  service  agreements  between  companies  are  considered  employment 
relationships  if  one  establishment  works  for  another  company  subject  to  the 
management  and  control  of  the  company.  Subordination  is  a  strong  indication  of 
employment  relationship,  since  according  to  Employment  Contracts  Act  a  natural 
person  (employee)  does  work  for  another  person  (employer)  in  subordination  to  the 
management  and  control  of  the  employer  and  the  employer  pays  to  the  employee 
remuneration  for  such  work’.  The  court  decision  gives  Estonian  Tax  and  Customs 
Board (EMTA) the right to requalify the service agreement to employment contract in 
case an actual employment relationship between the parties has been identified. Labour 
taxes from the remunerations (that is the prerequisite for social protection coverage in 
some social risks like sickness) shall then be declared and paid. 
  Transparency and administrative accessibility of social protection 
         The  procedure  of  changing  the  employment  status  is  relatively  simple,  as  are  the 
procedures  regarding  the  suspension  of  professional  practice  in  the  case  of 
unemployment, and the reactivation of social insurance. 

  Extension of social protection for the self-employed and non-standard workers – 

closing the gap in coverage of social protection 

         Greece has implemented paradigmatic reform in order to extend social security for the 

Denmark 

Estonia 

Greece 

215 The “income” referred to here is solely the income from work for the employees, the earned income for the self-employed and the income 
from social security for the social security claimants 

95 

 
 
 
 
                                                            
self-employed. The gradual implementation, since May 2016, of the recent reform of 
the  social  protection  system (Law  4387/16),  is  expected,  among  other  things,  to  ease 
further  the  remaining  gaps  and  differences  in  the  provision  of  social  protection 
benefits,  between  the  ‘self-employed’  and  the  ‘employees’,  as  well  as  among  the 
different  types  of  ‘self-employed’  and  those  of  ‘non-standard’  employment.    In 
particular, the new pension system (as of 2017) brings together several social insurance 
funds  into  one  unified  pension  fund.  The  establishment  of  this  fund  implies  the 
application of uniform rules for contributions and benefits to all salaried workers and 
the  self-employed.  Additionally,  income  assessment  base  was  calculated  until  end  of 
2016 as percentage of the so-called ‘imputed income’, which is a fictitious income (and 
not  the  real  income).  From  1st  January  2017,  the  ‘self-employed’  contributions  have 
been  calculated  as  percentage  of  their  net  taxable  income  of  the  previous  year,  to  be 
paid  in  12  monthly  instalments.  Importantly,  unemployment  insurance  has  been 
extended to the self-employed216. 

        Further on, since 2015 the conditions of retirement are the same for all employees and 

self-employed. 

Social protection for 'dependent self-employed' 
         In Greece, if the ‘dependent self-employed’ person has up to two employers per year, 
social insurance contributions will be paid according to an ‘employee’ status (i.e. one-
third by the ‘self-employed’ individual and ‘two-thirds’ by the employer). 

  Extension of social security for self-employed 
         The  new  regulatory  framework  (Law  20/2007  on  the  Self-Employed  Work  Statute) 
now  treats  employment  and  self-employment  equally  in  relation  to  social  protection. 
Among the diverse measures provided for on this matter, Spanish experts highlighted 
the establishment of new incentives in the form of exemptions, reductions or subsidies 
for Social Security contributions.  

        The  incentives  for  self-employment  improved  since  September  2015  (Law  31/2015, 
art. 31) by reducing the social contributions of new self-employed workers, especially 
those  under  35  years  old  and  women.  Further  on,  unemployment  insurance  has  been 
extended to the self-employed in 2010. 

Spain 

Social protection for 'dependent self-employed' 

 
         Economically  dependent  self-employed  workers  are  defined  as  those  self-employed 
workers  whose  economic  activity  is  developed  predominantly  for  a  single  client  on 
which they depend for at least 75% of their income, do not employ third parties, have 
their  own  production  infrastructure,  organisational  independence  and  their  income 
depends  on  the  work  carried  out.  Spain  made  it  compulsory  for  the  dependent  self-
employed (‘economically dependent self-employed’ (TRADE)) to opt into accident at 
work insurance, while this is voluntary for the ‘independent’ self-employed. 

  Extension of social protection for non-standard workers 
          As  a  way  of  extending  protection  to  non-standard  workers,  in  2013  (Royal  Decree 
11/2013)  Spain  introduced  new  and  more  favourable  way  of  calculating  the 
contribution periods for contributory social security benefits (excluding unemployment 
benefit) for part-timers. The calculation is no longer carried out through equivalence to 
a full working day but is calculated improving the proportionally by applying a general 
rate of part-time work. The 'Social Dialogue' was resumed in the second half of 2013 
with the aim of improving the social protection of part-time workers. As a consequence 
of  the  "Agreement  on  improving  the  conditions  of  coverage  of  social  protection  for 
part-time  workers"  Social  Security  legislation  was  amended  to  include  the  part-time 
relief  contract,  the  fixed-discontinuous contract,  and  the  incorporation  of  contracts  of 
these types in the special scheme for domestic employees217. 

216 Yet, as far as the risk of unemployment, accident at work and temporary disability are concerned, there are still gaps of coverage for the 
‘self-employed’ which have not been dealt with by the new Law. According to Greek experts, despite the various measures taken over  the 
recent  years,  certain  differences  and  inequalities  between  the  ‘employees’  and  the  ‘self-employed’,  as  regards  their  social  protection 
obligations and rights, still remain. Moreover, there are indications that the recent change of the contributions’ calculations basis has brought 
about  an  increase  of  the  financial  burden  on  social  insurance  contributions  of  some  categories  of  the  ‘self-employed’.  Furthermore,  the 
calculation of contributions as a percentage of the ‘imputed income’ had also brought about negative financial implications for a number of 
‘self-employed’. As a result, a large percentage of the self-employed lost the entitlement to healthcare benefits. 
217 One of the weaknesses of employment creation in Spain in the last three years, according to the consulted trade unions, is the abuse of 
part-time  contracts  and  the  growth  of  contracts  of  less  than  one  week.  This  requires  pursuing  the  path  of  reforms  that  improve  the  social 

96 

 
 
 
 
 
                                                            
        Further on, apprentices and paid trainees have a unique monthly contribution quota that 

gives entitlement to all benefits, including unemployment. 

  Extension of social security for the self-employed 
         Finland  has  closed  down  an  important  issue  of  the  option  to  self-report  income  for 
insurance  purposes.  Instead  of  self-declaration  (which  often  leads  to  low  income 
coverage)  there  is  a  trend  towards  using  registered  income  as  the  basis  for  insurance 
fees. 

Social protection for the non-standard workers: family benefits 

 
         In  Finland,  there  is  a  specific  measure  concerning  families  which  combine  non-
standard  work  with  homecare  allowance218.  There  is  also  part-time  home  care 
allowance for those parents that have part-time employment. Furthermore, flexible care 
allowance  can  be  paid  to  a  parent  caring  for  a  child  under  3  years  of  age  and  who 
works no more than 30 hours per week219.  

  Measures discussed at the moment 

Unemployment protection 

         An  expert  group  was  set  up  to  evaluate  how  to  improve  unemployment  protection 
among  the  self-employed  and  atypical  workers.  The  expert  group,  in  its  report  of 
December  2016,  suggested  that  a  new  unemployment  insurance  form  –  combination 
insurance – should be implemented. The self-employed who combine paid labour and 
self-employment  could  insure  both  their  wages  and  income  from  self-employment. 
Thus the non-coverage problems linked to the unemployed who have combined part-
time  work  with  part-time  self-employment  could  be  eliminated.    The  government  is 
discussing  the  proposal  and  will  possibly,  in  the  course  of  2017,  make  changes  in 
legislation, which would be implemented in 2018.       

Finland 

  Non-standard workers –  proposals concerning zero-hour contracts and seasonal 

workers 

        A  citizens  initiative  in  2015  followed  a  report  made  for  the  Ministry  of  Economic 
Affairs and Employment and proposed the prohibition of zero-hour work contracts, as 
well as the introduction of mandatory minimum working hours. The citizen's initiative 
was turned down and more research has been called for. There have also been views 
presented that the Employment Contracts Act can already be interpreted so that zero-
hour  contracts  can  be  declared  illegal  since  to  fulfil  the  criteria  for  an  employment 
contract,  an  employer  must  offer  at  least  some  work.  A  law  proposal  amending  the 
working  time  legislation  and  conditions  for  zero-hour  contracts  was  submitted  to  the 
Finnish  Parliament  in  July  2017.  The  proposal  would  limit  the  use  of  contracts  to 
situations  where  the  employer  can  justify  that  the  demand  for  labour  varies.  The 
employer would also have to provide the employee an estimate of the amount of work 
offered. The proposal also aims to ensure that the employee would be entitled to sick 
pay, as well as pay during the resignation period. 

        Further on, the same Ministry ordered a report on the employment  status of seasonal 
workers.  The  report  proposed  that  all  foreign  wild  berry  pickers  should  be  officially 
employed.  The  proposal  was  found  to  be  difficult  to  coordinate  with  the  existing 
definition  of  employment  where  it  is  sometimes  hard  to  make  a  clear  distinction 
between  dependent  employment,  different  forms  of  self-employment  and  other  non-
standard work. However, an information desk for foreign berry pickers was set up by 
the Ministry on 21st July 2014. 

  Basic income experiment 
         Aim of the experiment is to see if basic income would improve economic security and 
social  protection  among  the  precarious  workforce,  be  it  self-employed  or  people  in 
non-standard employment contracts. The experiment started on 1st January 2017 with 
2000  randomly  selected  unemployed  persons  receiving  benefits  from  the  Social 

protection  of  this  type  of  contract,  as  well  as  fixed-discontinuous  contracts  in  matters  of  unemployment  and  duration  of  contributions  to 
access a pension. 
218 Those parents who do not use municipal care are paid a compensation called homecare allowance. Some families are able to combine odd 
hours of paid work and childcare by working one after another. 
219 The flexible care allowance is payable at two rates depending on the parent's total working time. 

97 

 
 
 
 
 
 
                                                                                                                                                                                          
Insurance Institution of Finland (Kela). The experiment will also show if unconditional 
benefit will enhance possibilities within self-employment or increase the incentives to 
accept work. 

In  France  a  significant  standardisation  effort  has  been  made,  starting  from  the  1970s, 
leading  to  greater  similarity  between  social  protection  for  self-employed  people  and 
employees  covered  under  the  general  scheme.  As  a  result,  today  the  health  insurance 
schemes  provide  identical  coverage  of  healthcare  costs,  as  do  the  pension  insurance 
schemes,  with  the  exception  of  liberal  professions.  In  addition,  since  1945,  self-employed 
people have been covered by the general family benefits scheme.  

  Addressing the gap in coverage: Personal accounts  
         As  a  solution  to  ease  transitions  between  labour  market  statuses  France  introduced 
reform extending compulsory insurance by standardising many schemes in order to be 
more  accessible  for  self-employed  and  non-standard  workers.    Since  January  2017 
France  is implementing  the  personal  activity  account  which  integrates  different  types 
of earnings into one unique account. In particular, it aims to better manage pensions, 
entitlement to life-long learning services and the time saving scheme. It combines three 
already-existing accounts  to accumulate  points  for  job-related training  and  education, 
days  off  not  taken  and  strenuous  work.  It  aims  at  disconnecting  rights  to  social 
protection  from  professional  status  and  connects  them  to  individuals:  moving  from 
social  rights  based  on  labour  market  status  to  individual  rights  transferable  from  one 
status to another. The main idea is to make benefits no longer contingent on a person’s 
labour market status. Instead, every worker would have an account where their social 
benefits would be kept in the form of ‘points’, regardless of labour market status. This 
would  make  it  easier  portability  and  transferability  of  rights  with  the  idea  of  making 
professional career paths more secure. This will simplify the process and will improve 
knowledge of rights (for instance, mobile access). Each person will be able to simulate 
different  scenarios  of  future  contributions  and  benefit  amounts.  For  example,  if  a 
person does not want to take some days off he/she is entitled to, they can be converted 
into  points  for  additional  training.  This  is  applicable  from  2017  for  salaried  workers 
and from 2018 for the self-employed. 

  Extension of social protection for self-employed 
         Madelin  contracts  are  a  way  for  self-employed  workers  to  improve  their  social 
protection on their own initiative. To encourage them to do so, contributions payable 
under these contracts can be deducted from their taxable income.  Greater convergence 
between  social  protection  for  the  self-employed  and  employed  workers  is  also 
facilitated by the use of “Madelin” contracts established by a law of 1994. However, 
despite  some  success,  this  measure  is  only  financially  attractive  to  beneficiaries  who 
come into a high tax bracket.  

         In  March  2018,  the  Government  announced  a  reform  that  would  extend  access  to 

unemployment benefits to the self-employed.  

France 

  Reducing legal conflicts about self-employed: judicial role 
         In  France,  the  role  of  labour  courts  is  very  important  in  reassigning  labour  statuses, 
especially  in  the  case  of  ‘dependent’  and  ‘bogus’  self-employment.  A  judge  could 
potentially  redefine  auto-entrepreneur  activity  (self-employment)  as  a  salaried  work 
contract in cases where a position of permanent legal subordination is established. In 
such  cases,  the  auto-entrepreneur  is  considered  as  a  salaried  worker  and  thus  falls 
under the general social security scheme. 

The  Croatian  unemployment  scheme  is  compulsory  social  insurance  covering  all 
employees.  Since  2014,  it  covers  also  the  self-employed.  Persons  receiving  “other 
income”220 as well as persons working based on student contracts or occupational training 
contracts  are  not  covered.  However,  at  the  same  time,  their  work  does  not  fall  under  the 
obligation to pay the contribution for unemployment insurance. 

Croatia 

  Extension of social protection for non-standard workers 

220 E.g. persons working based on a contract for service, or author’s contract. 

98 

 
 
 
 
 
 
 
                                                            
Hungary 

Ireland 

Italy 

         Tax  reform  which  came  into  effect  in  January  2017  includes  extension  of  social 
protection  and  the  obligation  to  pay  social  security  contributions  to  non-standard 
workers, through the broad suggestion, with some exceptions, to treat different kinds of 
income similarly for tax and contribution purposes. However, the proposal has raised 
concerns  that  a  significant  proportion  of  artists  and  creative  workers,  who  exist  on 
incomes barely above the poverty line, will see the net value of these incomes reduced 
considerably.   
No initiatives identified. 

  Extension of invalidity pensions and the treatment benefit (healthcare) to the self-

employed 

         The  reform  came  into  place  from  2017,  for  which  the  created  Advisory  Group  was 
guided by the findings of the 2010 Actuarial Review of the Social Insurance Fund. In 
particular,  Advisory  Group  increased  the  level  of  contribution  for  Invalidity  Pension 
for 1.5 percentage points extra after assessing that it is financially achievable.  

        The  Advisory  Group  also  recommended  that  the  Department  of  Social  Protection 
should consider how the methodology for assessing means for Jobseeker’s Allowance 
could  be  simplified,  with  a  view  towards  ensuring  that  the  principle  of  equity  in 
assessment of incomes of households in similar income circumstances is observed in a 
consistent manner, while bearing in mind technical factors in and differences between 
assessing  employed  and  self-employed  incomes.  Other  recommendations  related  to 
ensuring  that  self-employed  people  are  aware  of  the  need  to  maintain  their  social 
insurance record and the benefits of making contributions on a voluntary basis.    
        The  Advisory  Group  also  considered  the  issue  of  ‘disguised  self-employment’  and 
pointed  out  that  it  may  have  resulted  in  the  tendency  to  wrongly  classify  some 
employees as self-employed, which itself would lead to new social risks. To mitigate 
these risks, the Advisory Group recommended that the Department of Social Protection 
and  the  Revenue  Commissioners  should  ensure  greater  compliance  with  the  Code  of 
Practice for Determining Employment or Self- Employment Status of Individuals. To 
this end, there should be regular reporting on the levels of reclassification. 

         As a follow-up to the report, a survey is being conducted by the Department of Social 
Protection of the preferences of some 20,000 self-employed for reform of the system 
and their willingness to pay increased contributions221. 
Social protection for 'dependent self-employed' 

 
          A  specific  new  scheme  was  introduced  in  2015  (Bill  no.  22)  for  ‘dependant  self-
employed’ persons working on continuous collaboration contracts who lose their job. 
In  particular,  they  must  have  paid  contributions  for  at  least  one  month  during  the 
previous  year  or  have  a  contract  with  duration  of  at  least  a  month.  DIS-COLL222  is 
provided for a number of months, and is equal to half of the months of contributions 
paid  in  the  previous  year.  The  maximum  duration  of  the  scheme  is  six  months.  No 
pension  contribution  on  behalf  of  the  unemployed  person  is  paid  when  receiving  the 
DIS-COLL. The amount of the benefit is equal to 75% of the monthly average income. 
The  amount  cannot  exceed  €1,300  and  the  benefit  is  reduced  by  3%  from  the  fourth 
month on. 

  Extension  of  social  protection  for  the  self-employed  and  non-standard  workers: 

parental leave, maternity and sickness allowances  

        ‘Jobs  Act’  includes  new  measures  for  parental  leave,  maternity  allowances  and 
sickness allowances for non-entrepreneurial self-employed workers and it is currently 
under discussion.  

         Policy measures were also introduced over time to extend social protection to the self-
employed and atypical workers through maternity and paternity leave and vouchers for 
babysitting  services.  Also  for  maternity/paternity  benefits  some  occupational  welfare 
schemes  provide  coverage  for  self-employed  workers  and  atypical  ones223.  Atypical 
workers  and  self-employed  persons  have  the  same  rights  and  opportunities  to  be 

221 According to the Irish experts, there is no evidence available on the conceivable consequences for the labour market of these measures. 
Nor  has  there  been  much  consideration  of  this.  Nor  in  the  Irish  context  is  there  any  consideration  of  developing  personal  accounts.  All 
relevant reforms tend to take a ‘within the system’ approach. 
222 The DIS-COLL scheme covers specific atypical workers profiles from the unemployment risk. 
223 For example Ebitemp, the Bilateral Agency for atypical workers, provides a contribution of around €2,250 for all those female workers 
with atypical contracts, who have labour contracts ending during the first 180 days of pregnancy and are not covered by maternity benefits by 
the National Institute of Social Insurance (INPS). Moreover Ebitemp also provides a contribution of €1,000 for child care costs in nurseries 
for those female workers who have worked for at least three months in the previous twelve ones. 

99 

 
 
 
                                                            
covered  for  health  care  provision,  maternity  cash  benefits  and  accidents  at  work  and 
occupational injuries benefits. For these types of social risks, the system seems to work 
relatively along similar lines as for employees with open-ended contracts. 
  Extension of social security for the self-employed and non-standard workers 
        The  contributory  social  protection  (social  security)  schemes  are  in  transition  in 
Lithuania  since  beginning  of  2017.  Main  trend  of  reform  is  further  expansion  of 
coverage.  More  types  of  self-employment  will  be  covered  from  social  risks  like 
sickness and maternity.  

        The ‘Social Model’ reform aims to include more people working as self-employed or 
on non-standard contracts in the State Social Insurance Fund system. The coverage of 
the  self-employed  is  becoming  much  closer  to  that  of  salaried  workers.  Moreover, 
unemployment insurance has been extended to the self-employed. Furthermore, people 
working  on  non-standard  contracts  are  fully  covered  by  social  protection  against  all 
social risks because they are insured by social security on the same legal basis as full 
time  employees.  Also,  they  are  covered  by  universal  and  means-testing  social 
protection  schemes  on  the  basis  of  residency  without  any  exception  related  to  their 
economic  status.    Only  persons  engaged  in  individual  activities  under  a  business 
certificate  are  still  covered  only  by  pensions’  (retirement,  disability,  orphans’  and 
widows’) insurance. However, they will be insured not only for basic pension, but for 
the earnings related part as well. 

         As of 2017, the new Law on State Social Insurance increases the involvement of self-
employed  in  the  system  of  social  insurance  and  self-employed  will  have  the  right  to 
sickness benefit. According to the data of the State Social Insurance Fund, due to the 
envisaged  expansion  of  social 
insurance  coverage  of  self-employed,  rising 
contributions  of  unemployment  social  insurance  and  bonus  taxation  will  produce  an 
extra budget income of €70m. 

  Extension social security coverage for self-employed 
         Expert report from Luxembourg identified an initiative aimed at tackling the issue of 
the self-employed who are compulsorily covered by sickness protection, but are subject 
to  much  longer  waiting  periods  than  salaried  workers.  Therefore,  Luxembourg  offers 
the opportunity for self-employed to voluntarily join the Mutual Employers’ Insurance 
Fund  without  a  contributory  period  being  required.  Additionally,  Long-Term  Care 
Insurance scheme is compulsory for all residents. 

  Transferability of rights and entitlements 
         In  Luxembourg,  the  unemployment  scheme  facilitates  transition  between  labour 
market statuses. The self-employed have to complete at least two years of compulsory 
pension insurance (instead of 26 weeks for contractual workers). However, periods of 
insurance  completed  as  an  employed  person  can  be  aggregated  to  this  period  of  two 
years,  provided  the  person  has  carried  out  activities  as  a  self-employed  person  for  at 
least six months before the submission of the request for compensation.  

Lithuania 

Luxembourg 

  Extension of social security for the self-employed 
         All  self-employed  matching  the  micro-enterprise  criteria

224

  have  an  opportunity  to 
register as a Micro-enterprise taxpayer to decrease the overall tax burden. The creation 
of  the  Microenterprise  Tax  status  aims  at  reducing  unemployment,  encouraging 
citizens to start their own business and simplifying tax payment procedures. However, 
according to Latvian experts, this regime has led to inadequately low contributions to 
social insurance budget and weak social protection of this group of employees. 

Latvia 

  Transferability of rights and entitlements 
         The social insurance system is fully individualised, as each person’s contributions are 
registered  on  a  separate  account.  Personal  accounts  (individual  social  security 
accounts)  make  it  possible  to  attach  acquired  rights  to  the  individual,  rather  than  the 
work contract. When moving to a less-regulated work relationship, for instance from a 
permanent  job  to  self-employment,  people  may  begin  accumulating  fewer  rights,  but 
they  would  not  lose  the  rights  previously  accumulated.  However,  the  Latvian  expert 
points to some drawbacks, as the individual social security account keeps redistribution 
as low as possible. 

224 As reported by the Latvian ESPN expert, one specific category is composed of micro-enterprises. In this country this is a company: (i) that 
employs up to 5 employees, (ii) the annual turnover of which does not exceed €100,000, (iii) where all shareholders are natural persons and 
(iv) where the monthly salary of any employee may not exceed €720. 

100 

 
 
 
 
                                                            
Malta 

  Reducing legal conflicts about self-employed 
         Legislative  measures  were  taken  in  2012,  whereby  clear  criteria  were  established  to 
determine  whether  an  employment  relationship  is  that  of  a  self-employed  or  of  an 
employee.  Despite  this  legal  provision,  in  practice  it  is  known  that  many  employers 
and  workers  respectively  prefer to  recruit  and to  be  registered  as  self-employed even 
when  they  meet  the  required  minimum  of  five  conditions  from  the  eight  specified  in 
the Legal Notice, and should thus be considered employees. 

  Transferability of rights and entitlements 
        To  deal  with  the  issue  of  transferability  of  occupational  pensions  entitlements,  the 
Netherlands  has  established  specific  collective  schemes  for  the  self-employed, 
facilitating transferability. 

Social protection for 'dependent self-employed' 

 
         Only  those  self-employed  who  work  at  the  premises  of/under  supervision  of  an 
employer  (‘dependent  self-employed)  are  compulsory  covered  by  occupational  and 
work injury schemes. 

The 
Netherlands 

  Extension of social protection for non-standard workers 
         The Netherlands introduced an initiative of re-defining the number of temporary jobs 
by transforming them more quickly into permanent employment. Namely, from 2015 
(Work and Security Act), new rules are aimed at getting earlier and easier steady work 
for  flexible  workers.  New  rules  refer  to  the  probationary  period  (should  not  be  with 
contracts shorter than 6 months), the non-competition rule (not allowed if there is no 
permanent  contract)  and  the  number  of  successive  temporary  contracts  (a  fourth 
extension of more than two years on a temporary contract automatically transforms it 
into a permanent position)225. 

  Reducing legal conflicts about self-employed 
        The only relevant recent change in legislation concerns the Declaration of Independent 
Contractor Status (VAR). This is a statement for the self-employed under which the tax 
authorities  will  assess  whether  the  agreement  between  the  self-employed  person  and 
the client is actually not an employer-employee relationship. This is to counteract any 
improper  advantage  of  the  self-employed  by  other  principal  (i.e.  bogus  self-
employment). In this case, payroll and social security taxes would be imposed on the 
employer. In the case of VAR the self-employed person was always responsible for the 
accuracy of the data submitted. If it turned out that the information provided about the 
relationship between the self-employed person and the client was wrong, both could be 
liable for additional tax assessments.  

  Extension of social protection for the self-employed and non-standard workers  
        The  changes  in  the  legislation,  introduced  in  2015  and  2016  closed  a  gap  in  the 
coverage of social protection between salaried workers and those employed based on 
the non-standard contracts. 

         Poland introduced changes in maternity benefit entitlement. Particularly, the maternity 
allowance  is  paid  at  100%  of  the  assessment  base  only  in  case  of  contributing  for  at 
least 12 months prior to the childbirth. If the contribution period is shorter, maternity 
allowance  is  set  at  the  minimum  level,  and  increases by  1/12  for  every  month  of  the 
contribution payment. The rationale behind this mechanism is to prevent claiming very 
high  benefits,  with  the  short  contributing  period.  This  mechanism  is  effective  from 
January 2016, with the amendment to the Act on cash social insurance benefits in the 
case of sickness and maternity.  

        Provision of maternity/paternity benefits as well as family benefits is in fact universal 
and  does  not  favour  employees  on  regular  contracts  over  the  self-employed,  those 
working  on  non-standard  contracts or  other  groups.  In  these  areas,  improvements  are 
relatively recent. The most spectacular one came in 2015, with the establishment of the 
new  parental  benefit,  effective  from  January  2016.  Moreover,  since  2017  the  new 
minimum  income  provision  covers  people  working  under  commission  contracts.  It 
introduces a minimum hourly rate for such contracts. This limit will be increased every 
year, following the growth of the minimum wage. 

Poland 

225 However, there is great doubt among stakeholders whether this law will improve the position of flexible workers. It might even leads to a 
worse situation. In this context it is interesting that the law provides that the unemployed have to accept any available work after six months, 
not only suitable work. 

101 

 
 
 
 
 
                                                            
  Limiting abuse of atypical employment 
         In  2016,  new  legal  provisions  came  into  force  aimed  to  reduce  the  share  of  non-
standard  work  contracts.  New  rules  when  entering  into  fixed-term  contracts  were 
provisioned to reduce the asymmetry in terms  of hiring and firing workers employed 
on  permanent  contracts  and  other  types  of  contracts.  Also  at  the  beginning  of  2016, 
rules  of  social  insurance  coverage  of  workers  under  civil  law  commission  contracts 
were aligned with the rules applicable in the provision of employment under contracts 
of employment based on the Labour code. The new principle of the minimum base for 
social insurance equal to minimum wage was introduced. As a result, if an employee is 
covered  by  more  than  one  contract  with  the  remuneration  lower  than  minimum,  the 
social  insurance  contribution  is  paid  on  the  basis  of  all  relevant  contracts,  up  to  the 
required minimum. This provision reduced possibility to hire non-standard employees 
on very low base contract covered by social insurance and combine it with another one 
with higher base, not covered by social insurance.   

  Extension of social protection for the self-employed: paradigmatic reform 
         Law  20/2012  extended  unemployment  benefits  to  cover  self-employed  workers  in  a 
situation  of  economic  dependence  i.e.  at  least  80%  of  their  activity  is  conducted  on 
behalf of a contracting entity (provision of services contract). In 2013, unemployment 
benefits  have  been  again  extended  to  cover  self-employed  workers  who  earn  their 
income through a registered business of their own or possess an individual commercial 
establishment,  as  well  as  their  spouses  if  performing  a  professional  activity  together 
with them on a regular and permanent basis. 

         In parallel, there are declared intentions of extending the mechanisms already in place 
regarding bogus self-employment to other bogus situations such as bogus traineeships 
and  to  include  mechanisms  for  the  protection  of  precarious  workers  against 
unemployment. 

Social protection for 'dependent self-employed' 

 
         In Portugal, the dependent self-employed enjoy better legal protection than the other 
categories  of  self-employed.  Since  2012  they  have  been  entitled  to  unemployment 
benefits.  However,  the  eligibility  conditions  for  these  people  are  different  than  for 
salaried employees226.  

  Reducing legal conflicts about self-employed 
         One  instrument  of  the  ongoing  reforms  is  the  integration  of  the  taxable  income  of 
people who work under different statuses or work for different employers. According 
to the ESPN experts, such integration could partly solve the problem of the boundaries 
between  different  employment  statuses  and  could  reduce  the  legal  conflicts  about 
dependent  self-employment.  In  Portugal  dependent  self-employment  is  formally 
defined,  drawing  a  distinction  between 
income  from  ‘dependent  work’  and 
‘independent  work’:  Law  55-A/2010  set  different  conditions  for  the  cases  when  a 
particular  collective  entity  benefits  from  ‘at  least  80%  of  the  total  value’  of  the  self-
employed  worker’s  yearly  activity.  In  this  case,  the  worker  is  considered  to  be 
economically dependent on the collective entity, and the latter is thus required to pay a 
portion of the worker’s contribution to the social security scheme.  

         Further  on,  Law  63/2013  set  new  mechanisms  to  tackle  the  fraudulent  use  of  self-
employment  contracts  in  subordinate  employment  relationships.  The  new  law 
established as a duty of labour authorities to open an enquiry procedure whenever they 
were  informed  of  a  case  of  self-employment  with  some  features  of  subordinate 
employment.  It also  simplified  the  administrative  and  juridical  procedures,  especially 
through  the  definition  of  short  periods  for  each  step  to  be  completed  and  the 
clarification of the roles and responsibilities of each party in the process. 
Social protection for 'dependent self-employed' 

 
         In  Romania,  dependent  self-employed  workers  (with  one  client)  benefit  from 
compulsory pension and health insurance (while for the ‘independent’ self-employed, 
this is conditional on a certain income), and the level of social contributions paid by the 
employer  is  equivalent  to  that  for  a  salaried  worker.  The  beneficiary  of  the  work  is 
required to pay contributions equivalent to those of an employer. Yet, compared to a 
salaried worker, the dependent self-employed do not have mandatory insurance against 

Portugal 

Romania 

226 Namely, 720 days in the previous 48 months compared to the 360 days in the previous 24 months applicable to most salaried workers. 

102 

 
 
 
 
 
                                                            
Sweden 

Slovenia 

unemployment, and their job stability is not guaranteed. 

A  recent  Government  Commission  on  Sustainable  Labour  Markets  and  Social  Policy 
proposed  a  number  of  reforms  that  would  substantially  improve  adequacy  of  social 
protection  for  large  groups  of  the  self-employed  and  people  with  atypical  forms  of 
employment.  Particular  reforms  were  suggested  in  unemployment  benefits  and  sickness 
benefits,  including  both  relaxed  and  less  stringent  qualification  criteria  in  unemployment 
benefits  (either  for  all  or  for  certain  particularly  vulnerable  groups  in  the  labour  market), 
reforms in unemployment benefits to encourage self-employed to re-activate their business, 
and  changes  in  the  calculation  of  entitlements  for  sickness  benefits  (will  also  have 
consequences for related programs such as parental leave benefits). However, whether any 
of these reforms will be implemented is far from certain. 

  Transferability of rights and entitlements 
         Sweden is among countries which have implemented mechanisms allowing a person 
to  include  contribution  periods  from  previous  employment  in  the  calculation  of 
unemployment benefits. Namely, unemployment benefit for the self-employed is based 
on  the  average  income  according  to  the  most  recent  tax  statement,  or  on  the  average 
income  from  the  last  two  tax  statements,  depending  on  which  alternative  is  most 
favourable to the self-employed. For those who have been self-employed for less than 
24 months, special rules apply whereby compensation can be based on earnings before 
the start-up of the business. 

  Reducing legal conflicts about self-employed 
         Slovenia  is  the  only  Member  State  that  offers  unambiguous  definition  applicable 
drawing  a  clear-cut  distinction  between  ‘genuinely’  self-employed,  ‘dependent’  self-
employed  and  ‘bogus  self-employed’.  In  Slovenia,  a  self-employed  person  is 
considered to be an economically dependent person when she/he performs work on the 
basis of a civil contract in person, for payment, independently and for a longer period 
in  circumstances  of  economic  dependency,  and  does  not  employ  any  workers. 
Economic dependency means that the person obtains at least 80% of his or her annual 
income from the same contracting authority. 

  Extending social protection for non-standard workers 
         In  Slovenia,  employers’  contributions  (since  2013)  and  employees’  contributions 
(since  2014)  to  pension  and  disability  insurance  have  been  paid  on  work  under  civil 
law  contracts.  Similarly,  since  2015  social  security  contributions  have  been  paid  on 
student work, which has eliminated the main factor that made it a precarious form of 
temporary  and  occasional  work.  This  new  regulation  on  student  work  has  improved 
their social security rights. Since 2014, those workers on non-standard contracts in the 
cultural sector who are engaged in artistic creation are entitled to the daily amount of 
sick pay if unable to work for at least 31 days. This measure is aimed at encouraging 
independent work in the cultural sector, improving the position of workers and creating 
more favourable conditions for their work. 
  Reducing legal conflicts about self-employed 
         In  Slovakia,  the  definition  of  dependent  work  was  tightened  in  2013  and  2015  to 
prevent labour-law relations being replaced by other forms of contractual relations and 
to  support  the  transition  of  the  bogus  self-employed  to  standard  employment 
relationships. 

Slovakia 

  Extension of social security for the self-employed 
         Slovakia  is  among  countries  which  implemented  parametric  reforms  aimed  at 
extending  the  coverage  of  the  self-employed,  namely  by  increasing  the  minimum 
insurance base. 

  Extension of social protection for the non-standard workers 
         Gaps  in  coverage  and  a  level  of  social  protection  between  employees  in  standard 
forms  of  employment  and  employees  relying  on  non-standard  forms  were  seen  - 
especially  by  representatives  of  trade  unions  -  as  inadequacy  of  social  protection 
system,  caused  by  interest  to  cut  off  labour  costs.  Situation  of  persons  on  work 
agreements  may  serve  as  an  example.  Until  2013,  work  agreements  were  exempted 
from  social  and  health  insurance  payments  and  enjoyed  much  less  employment 

103 

 
 
 
 
 
 
protection. Employing a person on work agreement was much cheaper than a person on 
a  standard  contract.  Discussions  resulted  into  reforms  of  some  parts  of  the  social 
protection  system  which  harmonised  status  of  non-standard  workers  with  those  in 
standard  employment.  In  2013  and  2015  new  legislation  increased  the  protection  of 
people on work  agreements and harmonised the social  contributions regime for these 
contracts with the regime for standard contracts. 

  Current efforts 

The Government appointed the Taylor Commission in 2016 to review workers’ rights 
and  practices  and  the  Work  and  Pensions  Select  Committee  is  now  setting  up  an 
inquiry into self-employment and the gig economy, with a particular focus on whether 
the UK welfare system adequately supports these workers.  
Relevant  debate  gaining  pace  is  on  the  funding  side:  this  concerns  the  potential  for 
closer  alignment,  or  even  merging,  of  income  tax  and  NICs.  This  would  have 
implications for self-employed people in particular, but also – because of the growing 
gap between the lower earnings limit for social security contributions and the personal 
tax threshold – for part-time and low-paid employees. 

United 
Kingdom 

104 

 
 
 
 
 
ANNEX 8: THE EXISTING EU INSTRUMENTS 

The EU acquis related to the rights and obligations in relation to social security and protection 
is implemented through a variety of legislative and non-legislative provisions. However, none 
of  these  fully  address  the  rights  and  obligations  of  people  in  non-standard  employment  and 
forms of self-employment. 

The Open Method of Coordination (OMC), the European Semester and benchmarking 

The  Recommendation  92/442/EEC227  on  'Convergence  in  social  protection  objectives  and 
policies'  identified  commonly  held  objectives  in  the  area  of  social  protection  and  many 
initiatives in this field which followed can be seen as continuous process of implementation, 
monitoring  and  follow-up  of  this  Recommendation,  leading  to  the  Social  Protection 
Committee  and  the  Social  OMC.  Together  with  the  Recommendation  on  "common  criteria 
concerning  sufficient  resources  and  social  assistance  in  social  protection  systems"  from  the 
same year228, the 92 Recommendation had great impact on development and convergence of 
social protection systems in decades which followed.  

The  Recommendation  was  successful  in  establishing  the  firm  bases  for  the  Treaty  of 
Amsterdam in 1999 where objectives started to be transformed into obligations229, led to the 
establishment of the High Level Working Party on Social Protection which was replaced by 
newly  established  Social  Protection  Committee  in  2000,  as  the  first  body  with  the  specific 
purpose of monitoring developments, promoting exchanges of information and good practice, 
and preparing an annual report on social protection. It offered also a basis for establishment of 
the Social OMC, particularly because of the resemblance of the methods of implementation.  

One  of  the  reasons  why  it  was  so  influential  is  the  success  in  setting  up  a  strong  dialogue 
between  Member  States  and  identifying  common  issues  in  social  protection  systems.  In 
particular, the debate established a consensus among Member States and the EU institutions 
that social protection systems need to be modernised230. The reason why the Recommendation 
was  so  effective  in  raising  the  interest  among  Member  States  to  exchange  practice  and 
actively  participate  in  such  debate  might  be  its  'inviting',  non-obligatory  nature  of  the 
Recommendation  and  its  aim  of  keeping  the  important  balance  between  providing  guiding 
principles in development of national systems and acknowledging that Member States remain 
free in determining how their systems should be organised and financed. 

While the Recommendation gave a detailed rendition of many aspects of social protection and 
did so by making reference to ‘workers’, it did not mention explicitly people that fall outside 
the  standard  worker  category.  When  it  comes  to  the  self-employed,  the  recommendation 
merely  states  that  Member  States  should  'examine  the  possibility  of  introducing  and/or 
developing appropriate social protection for self-employed persons.' 

Later  on,  the  common  objectives  and  indicators  on  coverage  of  adequate  and  sustainable 
pensions, health care and long-term care set out in the context of the Social Open Method of 

227  Council  Recommendation  of  27  July  1992  on  the  convergence  of  social  protection  objectives  and  policies  (92/442/EEC),  OJ  L  245, 
26.8.1992, p. 49–52. 
228 Council Recommendation of 24 June 1992 on common criteria concerning sufficient resources and social assistance in social protection 
systems. 
229  European  Social  Observatory,  Social  Policy  at  the  EU  Level:  from  the  Anti-Poverty  Programmes  to  Europe  2020,  Background  Paper, 
2012, VC/2012/0658, p.11. 
230  Modernising  and  improving  social  protection  in  the  European  Union,  Communication  from  the  Commission,  COM  (97)  102  final,  12 
March 1997. 

105 

 
 
                                                            
Coordination231  also  gave  little  attention  on  how such  coverage  functioned  in  the  context  of 
labour law and types of employment.  

Finally,  'Europe  2020'  built  on  all  of  these  steps  when,  in  connection  with  the  European 
Semester,  it  became  the  EU  policy  framework  for  policy  coordination  in  the  field  of  social 
protection with concrete and defined aims, implementation methods and monitoring systems.  

EU Labour law: directives on non-standard forms of employment, on protection of employees in 
case of employers' insolvency and on working conditions 

Over the years, an EU legal framework for protection of rights in some areas of non-standard 
employment  has  been  developed  through  the  Directive  on  Temporary  Agency  Work232  and 
through negotiated agreements between social partners and implemented via the Directives on 
Part-Time  Work  and  Fixed-Term  Work233.  But  as  the  Directives  apply  to  employment 
conditions, their impact on social protection is rather limited. While social protection closely 
linked  to  employment  as  part  of  pay,  such  as  occupational  pensions234,  maternity  pay  and 
sickness pay is covered in these Directives the Court of Justice has made clear in its case-law 
that the Directives do not apply to statutory social security schemes235. In the preambles to the 
Agreements  the  social  partners  call  on  Member  States  to  ensure  that  social  protection 
arrangements are adapted to fit with evolving flexible forms of work. These preambles are not 
legally binding and, while Member States on several occasions have stated their commitment 
to make social protection more employment friendly, a recent review of the extent to which 
this  has  happened  suggests  that  in  several  Member  States  there  is  ample  room  for 
improvement236. 

The  Directive  2008/94/EC  on  protection  of  employees  in  the  event  of  employer  insolvency 
covers  protection  of  social  security  benefits  under  national  statutory  social  security  and 
supplementary occupational or inter-occupational pension schemes.  

The  Directives  on  work  in  specific  sectors  also  provisions  related  to  social  protection.  For 
instance, article 31 of Directive 2017/159 on the Work in Fishing Convention237 establishes 
the right of fishermen to compensation in the event of injury due to occupational accident or 
disease. Similarly, the current maritime proposal includes a provision on social protection of 
seafarers  on  the  compensation  in  case  of  death  or  long-term  disability  for  occupational 
reasons. 

Directives on equality between women and men  

The EU legal framework on equality between women and men guarantees a number of rights 
in the field of social protection. The Directive 1979/7/EEC on the progressive implementation 
of  the  principle  of  equal  treatment  for  men  and  women  in  matters  of  social  security  covers 
statutory schemes which provide protection against the risks of sickness, invalidity, old age, 

231 COM(2008) 418 , available online. For a presentation of the Social OMC see online. 
232 Temporary Agency Work, available online.  
233 Fixed-Term Work Directive 1999/70/EC, available online; Part-time Work Directive 97/81/EC, available online.  
234 See Joined Cases C-396 and 395/08 Bruno and others at para.41, available online. 
235 Ibid and Case C-385/11 Moreno v INSS, available online. 
236 ESPN (2017), Thematic Reports on Access to social protection of people working as self-employed or on non-standard contracts. 
237  Council  Directive  93/103/EC  concerning  the  minimum  safety  and  health  requirements  for  work  on  board  fishing  vessels  (thirteenth 
individual directive within the meaning of Article 16(1) of Directive 89/391/EEC). 

106 

 
 
 
 
                                                            
accidents at work and occupational diseases and unemployment, as well as social assistance, 
in  so  far  as  it  is  intended  to  supplement  or  replace  the  statutory  schemes.  Occupational 
pensions are covered by the Directive 2006/54/EC on the implementation of the principle of 
equal  opportunities  and  equal  treatment  of  men  and  women  in  matters  of  employment  and 
occupation (recast). The EU legal framework also guarantees a number of rights in the field of 
maternity leave and parental leave.  

Directive 2010/41/EU on equal treatment between men and women engaged in self-employed 
activity 

At  EU  level,  one  step  towards  improving  the  protection  of  individuals  engaged  in  self-
employment and the coverage of social protection for spouses of the self-employed workers 
has  already  been  made.  The  Directive  2010/41/EU238  on  equal  treatment  between  men  and 
women  engaged  in  self-employed  activity  grants  women  (including  spouses  of  the  self-
employed) the right to be entitled to maternity leave and benefits for at least 14 weeks; levels 
of benefits and eligibility conditions vary widely among Member States. Furthermore, where 
a system for social protection for self-employed workers exists in a Member State, it requires 
providing coverage also to spouses of self-employed workers engaged in their activities. 

Social security coordination 

Ever since 1959, the social security systems of the Member State have been  coordinated so 
that  persons  moving  within  the  Union  could  avoid  losing  their  social  security  protection. 
However,  Member  States  remain  competent  to  determine  the  conditions  for  becoming 
affiliated to the social security system, provided that these conditions are not discriminatory.  

The rules on social security coordination apply to national legislation on sickness, maternity 
and  equivalent  paternity  benefits,  old-age  pensions,  pre-retirement  and  invalidity  benefits, 
survivors’  benefits  and  death  grants,  unemployment  benefits,  family  benefits,  benefits  in 
respect of accidents at work and occupational diseases239. 

Self-employed persons in the social acquis 

The notion of "self-employed person" is not defined at EU level. Depending on the objectives 
pursued by different EU instruments, self-employed persons are covered or not.  

Some directives concern only the employed person as they treat issues linked to employment 
contracts  and  are  not  relevant  for  self-employed  persons  (e.g.  Directives  89/391/EEC, 
91/533/EEC,  1999/70/EC,  96/71/EC).  Other  EU  law  provisions  apply  to  both  categories  of 
persons,  either  by  applying  the  same  rules  to  self-employed  as  to  employed  persons 
(especially  the  current  acquis  implementing  the  principle  of  equal  treatment,  e.g.  Directives 
2000/78/EC,  2006/54/EC,  1979/7/EEC),  or  by  setting  different  rules  for  self-employed 
persons (EU rules on social security coordination240).  

238 Available online. 
239 See most notably Regulation (EC) 883/2004 on the coordination of social security systems, which was adopted on the basis of Article 42 
EC (now Article 48 TFEU) and Article 308 EC (now Article 352 TFEU) and its implementing Regulation (EC) 987/2009. 
240 Regulations 883/2004 and 987/2009 apply both to employed and self-employed persons. The coordination rules differ depending on the 
status of the person. A person is employed or self-employed depending on the national legislation under which the activity is performed. If a 
person is performing both employed activities in one Member State and self-employed activities in another, then priority in determining the 

107 

 
 
 
 
 
                                                            
Directives related to supplementary and occupational pensions 

The  Directive  2014/50/EU  on  the  acquisition  and  preservation  of  supplementary  pension 
rights lays down rules aimed at facilitating the exercise of the right of workers to freedom of 
movement  between  Member  States  by  reducing  the  obstacles  created  by  certain  rules 
concerning  supplementary  pension  schemes  linked  to  an  employment  relationship.  The 
Directive  (EU)  2016/2341  on  the  activities  and  supervision  of  institutions  for  occupational 
retirement  provision  requires  that  every  institution  provides  both  general  and  personalised 
information to the beneficiaries.  

applicable legislation is given to the State of employment, knowing that the social security protection of employed persons is more developed 
comparing to self-employed persons.  

108 

 
 
 
 
 
                                                                                                                                                                                          
ANNEX 9: ANALYTICAL METHODS 

The  estimation  of  social  and  economic  impacts  include  several  sets  of  microeconomic 
simulations,  to  quantify  the  impact  of  the  measures,  as  well  as  more  qualitative  analysis, 
allowing  to  better  understand  behavioural  reactions  and  attitudes  (through  a  survey)  and 
country specific context (through case studies).  

1. Evidence, sources and quality 

The following expert advice has fed into the Impact Assessment: 

-  From the Report of the public consultation "Accompanying the document establishing 

a European Pillar of Social Rights (SWD(2017)206)". 
-  From  the  commissioned  study  "Access  to  social  protection  for  all  forms  of 
employment:  Assessing  the  options  for  a  possible  EU  initiative"  by  Fondazione 
Giacomo Brodolini. 

-  From the commissioned study "Behavioural study on the effects of an extension of the 
access to social protection for people in all forms of employment" by Open Evidence. 
-  From  six  commissioned  case  studies  on  special  forms  of  employment  (Mini-jobs  in 
Germany,  civil  law  contracts  in  Poland,  self-employed  without  employees  in  the 
Netherlands,  casual  worker  in  Romania,  economically  dependent  self-employed  in 
Spain, project workers on continuous collaboration projects in Italy) 

-  From literature review as referred to in footnotes. 

2. Quantification of impacts - simulations on the basis of the EU-SILC database 

The microeconomic simulations were carried out by using the latest available EU-SILC cross-
section  and  panel  data.  Two  complementary  approaches  were  used:  simulations  in 
EUROMOD, the EU's tax-benefit microsimulation model, and ad-hoc simulations outside this 
modelling framework, respectively. 

2.1 EUROMOD simulations  

Simulations  based  on  EUROMOD,  the  EU's  tax-benefit  microsimulation  model,  were 
commissioned  by  DG  Employment.  Further  details  can  be  found  in  the  above-mentioned 
corresponding study, Fondazione Brodolini (forthcoming). EUROMOD was used to simulate 
the  fiscal  and  distributional  impacts  of  extending  formal  coverage  by  unemployment 
insurance to the self-employed in five Member States where they are currently excluded from 
the  corresponding  schemes,  namely  Greece,  Croatia,  Italy,  Latvia  and  the  Netherlands. 
Simulations were based on EU-SILC data for 2016. Available data did not allow performing 
similar simulations for non-standard workers since the data set does not distinguish between 
standard workers and non-standard workers. 

The  simulated  unemployment  shock  was  defined  using  historical  data.  Namely,  the  average 
transition rate from self-employment to unemployment or inactivity for 2007-2015 from EU-
SILC  data  was  considered,  focussing  on  those  self-employed  workers  (in  year  t-1)  who 
become unemployed or inactive as a result of the unemployment shock (in year t). The self-
employed  are  defined  as  individuals  with  positive  self-employment  income  and  no 
(dependent) employment income. From that sample, those subject to the unemployment shock 
are  randomly  selected.  Table  A.11  below  reports  on  the  unemployment  risk  underlying  the 
simulated unemployment shocks.  

109 

 
 
 
 
Two scenarios were simulated: 

- Scenario 1 ("earnings-related" scenario in the main text) assumes that recipients qualify for 
the  unemployment  benefit  currently  in  place  for  employees  if  entitled,  given  their 
characteristics, and for as many months as dictated by the programme rules currently in place.  

-  Scenario  2  ("flat-rate"  scenario  in  the  main  text)  assumes  that  all  formerly  self-employed 
workers (in year t-1) who are either unemployed or inactive (in year t) qualify for a flat-rate 
unemployment benefit at 60% of median income, paid for at least as many months (in year t) 
as they had been self-employed (in year t-1). 

In  both  scenarios, the rules of the systems in  place  are also extended  on the financing side: 
self-employed  workers  pay  the  lowest  unemployment  insurance  contribution  rate  currently 
applying  in  the  Member  State's  existing  system  to  employees  and  their  employers.  The 
corresponding  information  was  retrieved  from  the  MISSOC  database.  Table  A.11  below 
presents the resulting contribution rates.  

Reported results compare the outcomes in each scenario to the baseline. This is defined here 
as the counterfactual situation that might prevail after the unemployment shock and under the 
current  state  of  affairs  of  no  unemployment  insurance  coverage  (and  no  unemployment 
benefit) for self-employed workers. 
Table A.11: Unemployment risks and contribution rates241 

Italy  

The Netherlands 

Greece 

Latvia 

Croatia 

Unemployment 
risk 

Contribution 
Rate 

9.0% 

4.2% 

6.2% 

11.7% 

12.9% 

1.9% 

2.07% 

1.93% 

1.9% 

1.7% 

Distributional  results  relate  to  percentage  point  changes  in  the  at-risk-of-poverty  rate  for 
several types of households, with respect to a poverty threshold that is kept constant at 60% of 
median equivalised household disposable income in 2016.  

2.1 Ad hoc simulations for all Member States  

The aim of the ad-hoc simulations is presenting some estimates about the budgetary costs that 
would  be  due  to  the  provision  of  comparable  unemployment  benefits  (henceforth  UB)  and 
sickness  benefits  for  self-employed  workers  (henceforth  SE)  across  all  EU28  Member 
States.242 

The  reported  simulations  are  based  on  hypothetical  scenarios  where  the  same  type  of 
(earnings-related or flat-rate) UB scheme is introduced in all EU-28 countries, regardless of 
the design of existing schemes. Based on the estimated number of self-employed that would 
be eligible for benefits according to the evidence recorded in EU-SILC about the SE risks to 

241 The information is presented in the main body of Brodolini (2018,  forthcoming) for HR, IT and LV, and in the annex (scenarios 5 and 6) 
for GR and NL. 
242  While  data  availability  in  EU  SILC  does  not  allow  corresponding  calculations  for  the  other  branches  of  social  security,  qualitative 
considerations are added in the main text to generalise the obtained results. 

110 

 
 
 
 
 
                                                            
become  unemployed,  corresponding  benefit  payments  to  them  are  simulated.  Aggregating 
these payments provides an estimate of resources needed.  

To get a magnitude of the estimated costs of these reforms, the total “gross” spending for the 
new simulated UB scheme for SE is expressed as a share of annual gross labour incomes of 
SE in the reported results, which can be interpreted as a contribution rate243.  

This  rate  has  to  be  interpreted  as  a  gross  rate  in  the  sense  that  possible  spending  already 
existing  for  UB  paid  to  SE  is  not  taken  into  account  and,  thus,  not  subtracted  from  the 
simulated  cost  of  the  new  UB  scheme.  To  infer  a  “net”  rate,  the  ratio  between  the 
unemployment  benefit  already  paid  to  the  self-employed  and  the  corresponding  wage  bill 
should be subtracted from the “gross” rate.  

It should be noted that the simulations reflect a “partial equilibrium” setting. This means that 
the  model  does  not  allow  to  capture  behavioural  reactions  the  introduction  of  benefits  nor 
does  it  capture  secondary  effects  due  to  the  interplay  between  a  possible  change  in 
contribution  rates  and  received  benefits  or  the  other  components  of  the  public  budget  (in 
terms, for instance, of personal income tax, tax deductions or other means tested benefits). 

Two types of benefits are simulated:  

1.  A  replacement  rate  scenario:  The  unemployment  benefit  is  paid  according  to  the 
number  of  months  spent  in  unemployment  or  inactivity  for  reasons  different  from 
retirement  during  2014  for  a  maximum  of  6  months.  The  amount  of  the  benefit  is 
equal  to  50%  of  previous  monthly  gross  labour  income  with  a  maximum  monthly 
amount equal to 60% of national median gross labour income (from employment and 
self-employment).  

2.  A  minimum  level  scenario:  The  unemployment  benefit  is  paid  according  to  the 
number  of  months  spent  in  unemployment  or  inactivity  for  reasons  different  from 
retirement  during  2014  for  a  maximum  of  6  months.  The  amount  of  the  benefit  is 
equal to 30% of the national median gross labour income (from employment and self-
employment), independently on previous individual monthly gross labour income as a 
self-employed.  

Therefore,  scenario  a)  is  more  consistent  with  the  rules  about  unemployment  benefits  that 
apply to employees in most countries, while scenario b) is more consistent with the adoption 
of a minimum level of mandatory social security.  

Sensitivity analysis was undertaken where the benefit was paid for 4 and 8 months instead of 
six or where the benefit level varied. Notably, the earnings-related benefit was set at 40% or 
60% of previous monthly gross labour income instead of 50%. The flat-rate benefit was set at 
20% and 40% of the national median gross labour income instead of 30%.  

Estimates have been carried out by using a sample built merging 7 cross-sections of EU-SILC 
(2009-2015  cross-sections,  i.e.  covering  the  period  2008-2014),  that,  following  harmonised 
definitions  of  the  relevant  variables,  record  workers’  self-reported  statuses  (i.e.,  employee, 
self-employed,  unemployed  or  the  various  inactivity  conditions)  in  each  month  of  a  certain 
year and also record annual gross labour incomes from employment and self-employment.  

In  the  simulations,  for  each  year  of  the  period  2008-2014  recorded  in  EU-SILC  2009-2015 
cross-sections,  the  focus  is  on  those  who  were  self-employed  (both  full-timers  and  part-

243 The study also reports on contribution rates for all in employment and self-employment, where the cost is divided by the annual gross 
labour incomes for SE and employees. 

111 

 
 
                                                            
timers) at January of each year and, being tracked their working status since February up until 
to  December  of  that  year  in  EU-SILC,  measure  the  cost  to  cover  these  workers’  subgroups 
against unemployment risks is measured. To additionally consider the annual cost for paying 
unemployment  benefits  to  those  who  have  been  self-employed  in  the  previous  and  are  still 
entitled  to  receive  an  unemployment  benefit  at  the  beginning  of  the  next  year,  the  results 
reported here add  to the annual cost the spending for those who are still unemployed  at the 
end of the year and have not exhausted the total period of receipt of UB, thus assuming they 
will not be again employed before the period of receipt of UB expires244.  

The results reported consider as becoming unemployed those self-employed in the data who 
move into unemployment or inactivity for reasons other than retirement throughout the year. 
This  broad  definition  is  chosen  in  response  to  a  possible  underreporting  of  unemployment 
among the self-employed in EU-SILC data. It may allow to reduce a possible underreporting 
of unemployment risks for SE due to the fact that, being absent UB schemes for them in many 
countries,  those  who  stop  to  work  can  answer  in  the  SILC  interviews  to  have  become  an 
inactive rather than an unemployed merely because they are discouraged, even if they would 
like  to  find  a  new  job.  Actually,  for  many  not  retired  individuals,  when  they  answer  about 
their  self-reported  employment  status  the  difference  between  the  statuses  of  unemployed  or 
inactive is rather slight and may depend on an individual feeling rather than on an objective 
status. And this holds true especially for SE when – being almost always absent UB schemes 
– a sort of official definition of unemployment, that makes the individual entitled to receive 
an UB, is not perceived by the them. 

The report contains more details on the steps of the simulations, where each step has been run 
at  the  country  level  and  pooling  together  the  7  cross-sectional  waves,  thus  providing  an 
average cost over a 7-year period. 

Ad-hoc simulations on the extension of sickness benefits to the self-employed:  

Differently  from  unemployment  benefits,  which  can  be  simulated  using  information  on 
periods spent in unemployment or inactivity, there is no information in SILC on which self-
employed  are  more  likely  to  receive  a  sickness  benefit,  if  this  benefit  were  provided.  The 
contractor  therefore  simulated  possible  sickness  benefit  for  the  self-employed  imputing 
benefits  according  to  their  characteristics,  exploiting  knowledge  on  employees  who  receive 
such benefits. More details can be found in the report, section 3.2.7.  

3. Qualitative assessment 

3.1. Comprehensive literature review and qualitative evaluation  

The  qualitative  assessment  of  impacts  is  based  on  comprehensive  literature  surveys  and  a 
country  expert  questionnaire  in  16  Member  States  (Denmark,  the  Netherlands,  Ireland, 
Belgium, Germany, Latvia, Romania, Italy, France, Finland, Sweden, Spain, Greece, Poland 
and Slovakia). The questionnaire focuses on the most likely economic and social impacts of 
policy  options  through  a  qualitative  evaluation  made  by  national  experts  with  reference  to 
those  social  provisions  where  there  is  a  lack  of  formal  access  for  workers  in  non-standard 
forms of employment and self-employed or where the de facto coverage is highly limited.  

More generally, as highlighted above, the use of quantitative tools to assess the impacts of the 
initiative  implies  a  certain  asymmetry  given  that  available  models  capture  more  easily  the 

244 In addition to these "upper bound" results, , the study also reports "lower bound" results focusing only on those who were self-employed 
in January and then become unemployed, which can be regarded as a measure of the first-year cost of the reform scenario.  

112 

 
 
                                                            
costs  than  the  benefits  associated  with  the  initiative.  Special  care  will  therefore  be  taken  to 
highlight in a qualitative manner the benefits associated with the extension of social security 
to  the  previously  unprotected  groups  in  the  labour  market  (in  terms  of  changes  in  income 
distribution, labour market dynamism, sustainability of the welfare state). To give a complete 
picture, the qualitative analysis also points to additional negative effects not captured by the 
available quantitative models. For instance, there could be a reduction in labour demand, due 
to an increase in labour cost.  

3.2 Behavioural survey 

Furthermore, a behavioural survey based on an overall sample of 8000 people was conducted 
in  10  Member  States  (Germany,  France,  The  Netherlands,  Italy,  Spain,  Slovakia,  Romania, 
Sweden, Poland and Belgium) to find out whether an extension of access to social protection 
would affect, and how, the behaviour of workers in non-standard forms of employment and 
self-employed.  Respondents  were  recruited  through  an  online  panel  so  the  sample  is 
representative of the Internet population, but not representative of the population in general. 
The  survey  combines  traditional  online  survey  research  and  online  experiment.  It  explores 
attitudes  towards  the  existing  national  social  protection  systems  (effectiveness  in  protecting 
people  in  different  situations)  and  people's  preferences  (degree  of  risk  aversion  strength  of 
preference for having social protection coverage as well as willingness to pay for it) as well as 
behavioural  implications  (whether  availability  of  social  protection  would  make  self-
employment  more  attractive,  importance  of  transferability  of  rights).  Socioeconomic 
information  about  the  respondents  was  also  collected,  so  as  to  control  to  specific 
characteristics  of  the  individuals.  Internet  was  used  as  a  methodological  tool  for  data 
gathering, using online panels in the selected countries. Annex 16 presents the main results of 
the survey. 

3.3 Case studies  

Finally,  six  case  studies  were  conducted  by  external  contractors  to  study  relevant  specific 
contract types in particular Member States:  

  DE: Mini-jobs 
  NL: self-employed without employees 
  PL: civil law contracts 
  RO: casual workers 
  ES: economically dependent self-employed 
 

IT: workers on continuous projects (co.co.co.) 

In the first place, the studies are used to describe the nature and the extent to which  special 
forms of employment in the six concerned Member States are being used as a 'new form of 
non-standard work'. They also illustrate gaps in the de facto ability of people in these forms of 
employment to acquire adequate protection through social security systems.  

In a second step, the case studies inform about the possible existence of derived rights (e.g. 
free health insurance for spouses, survivors pensions) social protection of people working in 
these special forms of employment and the take-up of social protection benefits at household 
level (e.g. widow pension). They also highlight the extent to which gaps in access to statutory 

113 

 
 
 
 
 
social  protection  are  compensated  by  other  means  (e.g.  private  health,  pension  or  life 
insurance, position in the wealth distribution). 

Finally, the case studies look at the costs of these forms of employment and their estimated 
potential benefits. 

114 

 
 
 
 
 
ANNEX 10: FURTHER INFORMATION ON IMPACTS OF POLICY MEASURES AND POLICY 
PACKAGES 

This  Annex  complements  Chapters  5.4  and  6.2  on  the  impacts  of  the  proposed  policy 
measures and packages, respectively. It comprises four sections. Section 1 presents evidence 
on  the  impact  of  opt-out  and  opt-in  clauses  for  enrolment  in  voluntary  schemes.  Section  2 
provides  details  on  the  available  quantification  of  the  impact  of  measures  to  extend  formal 
coverage  and  puts  them  in  perspective.  Finally,  Section  3  presents  an  exemplary 
quantification  of  possible  impacts  of  relaxing  qualifying  periods  as  a  measure  addressing 
effective coverage. Finally, Section 4 presents an overview table summarising main impacts 
of the policy packages.  

1. Voluntary coverage under opt-in vs. opt-out clauses 

Voluntary coverage by social security schemes can be implemented via opt-in clauses or opt-
out  clauses.  Opt-in  clauses  require  potential  beneficiaries  to  take  action  to  choose  coverage 
whereas  opt-out  designs  imply  being  covered  is  the  default  option,  with  action  needed  to 
avoid  being  covered.  Experiments  and  observational  studies  show  that  making  an  option  a 
default increases the likelihood that it is chosen (default effect). In the context of insurance, 
there  is  evidence  that  when  consumers  are  faced  with  car  insurance  options  that  are  very 
similar,  except  for  the  possibility  to  opt-in  vs.  opt-out  of  additional  coverage,  the  former 
design option results in much lower levels of participation than opting-out (20% vs. 75% in a 
seminal  study)245.  In  a  similar  vein,  a  large  empirical  literature  shows  the  importance  of 
default  options  in  shaping  decisions  about  retirement  savings  including  savings  plan 
participation and levels of contributions246. The following empirical evidence  from Member 
States underlines the point regarding social security coverage:  

In  the  UK  pension  system,  flat-rate  state  pensions  providing  basic  old-age  income  are 
complemented  by  voluntary  contribution-based  workplace  pensions,  set  up  or  facilitated  by 
the  employer  for  their  employees.  To  reverse  the  observed  long-term  trend  decline  in 
coverage, from 2012 the UK progressively switched to an opt-out system from the previous 
opt-in  one.  Workplace  pension  scheme  membership  subsequently  increased  from  50%  in 
2013  to  64%  in  2015.  The  employee  opt-out  rate  was  8%  to  11%  among  larger  sized 
employers and reached 17% in smaller firms.  

In  Germany,  non-standard  employees  on  a  mini-job  contract  have  voluntary  access  to  the 
public pension system. In 2013, the design was changed from an opt-in to an opt-out option. 
The  default  conversion  resulted  in  a  tripling  of  the  share  of  mini-jobbers  covered  by  the 
pension system, albeit to a still low level (from below 6% to 18%)247.  

As these  two examples  demonstrate, setting defaults can be an effective way of influencing 
behaviour also in a context of providing social security coverage. 

245 See Johnson, Hershey, Meszaros, and Kunreuther (1993), Framing, Probability Distortions, and Insurance Decisions. Journal of Risk and 
Uncertainty, Vol. 7, No. 1, 1993. 
246 See Beshears, J.; Choi, J. J.; Laibson, D.; Madrian, B. C. (2009). "The Importance of Default Options for Retirement Saving Outcomes". 
Social Security Policy in a Changing Environment. 
247 The share of mini-jobbers not working in private households covered on a voluntary basis more than doubled between December 2012 
and  March  2013  (from  5.6%  to  11.2%)  and  has  since  reached  18%.  See  RWI,  Nachfolgestudie  zur  Analyse  der  geringfügigen 
Beschäftigungsverhältnisse  (Minijobs)  sowie  den  Auswirkungen  des  gesetzlichen  Mindestlohns  Endbericht  Gutachten  im  Auftrag  des 
Ministeriums für Arbeit, Integration und Soziales des Landes Nordrhein-Westfalen, November 2016, p. 21.  

115 

 
 
 
 
                                                            
2. Micro-simulations for the quantification of the impact of measures to extend formal 
coverage 
Micro-simulations  have  been  commissioned  to  Fondazione  Brodolini248  for  the  purposes  of 
this  Impact  Assessment  in  order  to  estimate  the  economic  costs  and  benefits  of  extending 
unemployment  and  sickness  benefits  to  the  self-employed.  An  introduction  to  these 
simulations  is  provided  in  Box  A.9  (for  further  methodological  details  please  see  Annex  9) 
before their set-up and results are presented and discussed in more detail.  

Box A.9: Simulations of impacts on the basis of EU SILC data 

All commissioned simulations focus on a change in the number of people to be covered and 
thus aim at illustrating the potential impact of extending formal coverage based on micro data 
from  the  EU-SILC  database.  As  per  the  gaps  identified  in  Section  2.2.2,  this  is  particularly 
relevant  for  the  self-employed,  while  available  data  do  not  allow  undertaking  such 
simulations  for  non-standard  employee.  The  simulations  therefore  focus  exclusively  on 
extending coverage to the self-employed. At the same time, the simulations do not consider a 
change in the eligibility conditions (change in the time thresholds, for example) and thus do 
not shed light on the potential impact of addressing effective coverage. Given data limitations, 
the  simulations  focus  on  unemployment  benefits,  and  to  some  extent  on  sickness  benefits, 
while  undertaking  simulations  for  the  other  branches  of  social  security  of  relevance  for  the 
initiative has not been possible.   

The  microeconomic  simulations  were  carried  out  using  the  latest  available  EU-SILC  cross-
section  and  panel  data.  Two  complementary  approaches  were  used:  simulations  in 
EUROMOD, the EU's tax-benefit microsimulation model, and ad-hoc simulations outside this 
modelling framework.  

EUROMOD  has  the  key  advantage  of  embodying  the  set  of  existing  rules  of  each  Member 
State's  tax-benefit  system,  including  eligibility  criteria,  financing  features  and  rules  for  the 
calculation  of  benefits  of  existing  unemployment  benefit  systems.  It  thus  allows  simulating 
the budgetary and distributional effects of extending coverage by the specific unemployment 
benefit  system  in  place  in  a  given  Member  State  to  the  self-employed,  while  taking  into 
account  interactions  with  other  elements  of  the  tax-benefit  system.  Such  simulations  were 
undertaken  for  five  Member  States  where  the  self-employed  currently  are  not  covered  by 
unemployment benefits, as these may arguably be among the Member States where impacts 
of extending coverage may be highest.  

As pointed out, the results of this first exercise reflect and are driven by the existing systems 
in place in specific Member States. Key decisions on how to cover the self-employed are in 
the competence of Member States, notably including the choice of whether to extend existing 
schemes  or  establish  separate  ones,  and  importantly  the  associated  level  of  protection 
provided.  These  decisions  are  of  key  importance  for  the  impacts.  Therefore,  in  a 
complementary  approach  a  set  of  ad-hoc  simulations  were  undertaken  investigating 
hypothetical  scenarios  where  the  same  type  of  (earnings-related  or  flat-rate)  unemployment 
benefit scheme for the self-employed is introduced in all EU28 Member States, regardless of 
the design of existing schemes. The effects of granting a relatively modest standard level of 

248

 Brodolini (forthcoming). 

116 

 
 
 
                                                            
protection to the self-employed can thus be compared across all Member States. 

For both sets of simulations, the cost of providing the benefits (in terms of total benefit pay-
out)  is  computed249  and  to  account  for  key  social  impacts,  the  distributional  effects  of  the 
benefits  and  corresponding  contributions  are  simulated.  Again,  impacts  will  not  only  vary 
depending  on  the  chosen  benefit  levels  but  also  hinge  on  financing  choices,  which  the 
Recommendation  leaves  to  Member  States.  At  the  same  time,  it  should  be  noted  that  the 
simulations  assume  that  coverage  is  extended  to  all  self-employed  (corresponding  to 
mandatory coverage). In this sense simulated impacts represent an upper bound relative to a 
voluntary extension of coverage.  

Some  key  limitations  of  the  simulations  should  be  noted.  First,  they  do  not  capture  second 
round  effects  resulting  from  behavioural  changes  in  response  to  the  extension  of  coverage. 
They  thus  do  not  reflect  possible  changes  in  labour  demand  and  supply  nor  the  increased 
labour market dynamism that may result from removing the lack of social security coverage 
as  an  obstacle  to  transitions  between  self-employment  and  different  types  of  employment. 
Second, neither are the simulations able to capture additional macroeconomic benefits of the 
provision  of  unemployment  benefits,  such  as  their  well-established  role  as  automatic 
stabilisers of the economic cycle. 

a) Extending unemployment insurance 

Simulating  the  impact  on  public  budgets  of  an  extension  of  existing  unemployment  benefit 
systems  

The  simulations  show  the  fiscal  and  distributional  effects  of  extending  unemployment 
insurance to the self-employed in a situation in which some reforms led to a homogenisation 
in  a  given  Member  State  between  employees  and  self-employed  of  rights  to  unemployment 
benefits  and  corresponding  contributions.  The  exercise  was  carried  out  using  the  EU's  tax-
benefit model EUROMOD for five Member States (Croatia, Greece, Italy, Greece250, Latvia 
and  the  Netherlands)  where  the  self-employed  are  currently  generally  excluded  from 
coverage, since these Member States may be facing the most pronounced impacts.  

The key scenario considered a simulation where coverage was extended to the self-employed 
under  the  same  rules  for  earnings-based  benefit  entitlement  in  place  for  employees  in  each 
Member  State  -  "earnings-related  scenario".  Rules  of  the  existing  systems  regarding 
eligibility  as  well  as  the  calculation  of  benefits  are  thus  applied  to  the  self-employed  who 
become  unemployed251.  Results  suggest  that,  comparing  with  a  baseline  situation  where  the 
same  unemployment  risk  prevails  but  no  unemployment  insurance  is  in  place,  extending 
unemployment insurance could lead to additional total gross expenditure for benefits ranging 
from  around  0.1%  (NL,  LV,  FI)  and  0.2%  (GR)  to  0.4%  (HR,  IT)  of  GDP  annually, 

249 It is expressed as a percentage of GDP in the EUROMOD simulations, which are based on a single wave of EU-SILC data, whereas in the 
ad-hoc simulations, which show average effects derived from simulations based on six data waves, show them as a percentage of the total 
labour income of the self-employed, which can be interpreted as a contribution rate that finances the expenditure. 
250  Note  that  in  Greece  an  unemployment  insurance  scheme  for  self-employed  workers  is  nominally  in  force  since  2013.  Nevertheless, 
because of stringent eligibility conditions, take-up of that scheme is extremely low: in 2016, when the total number of unemployed workers 
was 1,126,066 (of whom many had formerly been self-employed), the number of recipients of unemployment benefit for the self-employed 
was  a  mere  4,125.  See  Matsaganis  M.  (forthcoming)  "Income  support  policies  and  labour  market  reform  under  austerity  in  Greece"  in: 
“Labour market policies in the era of pervasive austerity: a European perspective” (edited by S. Theodoropoulou). Bristol: Policy Press. 
251 To assess the effects of extending unemployment insurance and unemployment benefit to the self-employed, an unemployment shock was 
simulated. This does not imply that this is a crisis scenario – the shock is based on average probability of becoming unemployed for the self-
employed  in  2007-2015  EU-SILC  data.  It  is  rather  a  modelling  strategy  which  implies  randomly  assigning  the  status  of  unemployment 
among the group of the self-employed.   

117 

 
 
 
                                                            
depending inter alia on the number of self-employed in the country, the unemployment risk 
they  face252  as  well  as  on  the  generosity  of  the  system  in  place  (see  Table  A.12,  column 
"Gross Spending / Earnings-related scenario").  

As  a  first  sensitivity  analysis,  to  study  the  effects  across  these  Member  States  of  extending 
access  to  an  insurance  of  similar  generosity,  a  second  scenario  -  "flat  rate  scenario”  -  is 
considered, where a flat-rate benefit is paid to the previously self-employed who have become 
unemployed,  independently  of  previous  labour  income  as  a  self-employed.  The  simulations 
considered a flat-rate benefit corresponding to 60% of national median disposable income253 
to  the  self-employed.  The  overall  range  of  gross  expenditure  remains  broadly  unchanged  at 
0.1% - 0.4% of GDP, although for individual Member States (IT, LV), resulting expenditure 
was higher than in the scenario based on actual (less generous) systems in place254 (see Table 
A.12, column "Gross Spending / Flat-rate scenario"). 

Table  A.12:  Simulated  gross  and  net  spending  on  unemployment  benefits  for  the  self-
employed in % of GDP255 

Gross spending  

Net spending  

Earnings-rel.  Flat-rate  Earnings-rel.  Flat-rate 

Italy  
The Netherlands 
Greece 
Latvia 
Croatia 

0.25% 
0.15% 
0.21% 
0.06% 
0.37% 

0.35% 
0.13% 
0.20% 
0.13% 
0.38% 

0.13% 
0.06% 
0.00% 
0.04% 
0.32% 

0.23% 
0.04% 
0.00% 
0.12% 
0.33% 

These simulations for the two scenarios assume no behavioural reactions by those affected by 
the  changes.  The  estimated  impacts  should  therefore  be  considered  as  conservative;  for 
instance  increased  underreporting  or  decreases  in  employment  could  lead  to  higher 
expenditure256.  

Depending on financing decisions by Member States, the simulated expenditure would only 
partially  translate  into  costs  for  the  public  budget.  For  example,  if  the  self-employed  were 
requested to pay social contributions rates corresponding to the lowest level currently levied 
on employees,257 parts of the public expenditure on benefits could be covered in this way. In 
this example, the estimated net public cost would not exceed 0.3% of GDP (HR), 0.2% (IT), 
0.1% of GDP (LV, NL). No positive cost remains for Greece (see Table A.12, columns "Net 
Spending")258.   

252 E.g. the unemployment risk for self-employed was the highest in Croatia and lowest in the Netherlands. 
253 For a single person household. 
254 Differences in results were negligible for GR, HR, NL. 
255 Differences relative to a baseline scenario without unemployment insurance for the self-employed.  
256 No behavioural reactions by those affected by the changes mean that no jobs will be lost nor gross earnings will decrease as a result of the 
higher social contributions introduced under the reform. Furthermore, it assumes that compliance is not affected by the reform (i.e. the level 
of under-reporting of earnings does not change in response to the increase in social contributions). 
257 The corresponding simulations are presented in the main body of Brodolini (forthcoming) for HR, IT and LV, and in the annex (scenarios 
5 and 6) for GR and NL.  
258 It should be noted that in addition to the social contributions there is a further effect on the revenue side of the public budget via income 
taxes. Social contributions are generally tax-deductible, while in the Netherlands received benefits are additionally taxed. The corresponding 
net effect on the total volume of income tax paid by households with self-employed members ranges from reductions by between 2 % and 
2 ¾ % (GR, HR) to very limited losses by less than ½ % (IT, LV) to a small increase by up to ¾% (NL). 

118 

 
 
 
 
 
 
 
 
                                                            
Simulating the cost of comparable unemployment benefits to the self-employed for all EU28 
Member States  

Complementary simulations were undertaken for all Member States for the introduction of a 
comparable  system  of  unemployment  insurance  to  the  self-employed,  regardless  of  the 
existing  systems.  So  to  facilitate  the  comparison  of  impacts  previously  self-employed 
unemployed are assumed to receive a benefit calculated according to the same rules across all 
Member States.  Based on the estimated number of self-employed that  would  be eligible for 
benefits  according  to  the  evidence  recorded  in  EU-SILC  about  the  self-employed  risk  to 
become  unemployed,  corresponding  benefit  payments  to  them  are  simulated.  Aggregating 
these payments provides an estimate of resources needed.  

Notably, two sets of simulations were run involving two different options for coverage: in the 
first  one,  benefits  amount  to  50%  of  previous  earnings  ("replacement  rate  scenario"),  in  the 
second  one  there  is  a  modest  flat-rate  benefit  amounting  to  30%  of  national  gross  median 
income ("minimum level scenario")259.  

To get a  magnitude of the estimated costs of these reforms, the total gross spending for the 
new simulated unemployment benefit scheme for the self-employed is expressed as a share of 
annual gross labour incomes of the self-employed, which can be interpreted as a contribution 
rate.260  It  is  a  gross  rate  and  presents  an  upper  bound  in  the  sense  that  possible  spending 
already  existing  for  unemployment  benefits  paid  to  self-employed  in  Member  States  where 
these are covered is not netted out from the estimate261.  

Figure A.18: Gross contribution rate to finance the unemployment benefit scheme for 
self-employed - Replacement rate scenario 

1,6%

1,4%

1,2%

1,0%

0,8%

0,6%

0,4%

0,2%

0,0%

AT BG CZ DK
Baseline

EL

FI HR

IE

Low duration High duration

LT

LV NL

PT
Low repl. rate High repl. rate

SK

SE

Notes:  To  interpret  the  figure,  note  that  the  red  triangles  represent  the  contribution  rate  in  the  central  scenario  where  the 
benefit amounts to 50% of previous earnings and is paid for a maximum of six months. The other data points show the results 

259  More  precisely,  the  simulated  earnings-related  benefit  amounts  to  50%  of  previous  monthly  gross  labour  income,  capped  at  60%  of 
national  median  gross  labour  income  from  employment  and  self-employment.  In  both  scenarios  the  benefit  is  paid  for  a  maximum  of  6 
months. 
260 This contribution rate would finance the new benefit in a revenue-neutral scenario. At the same time, it should be noted that while the cost 
of extending coverage is expressed as a contribution rate, i.e. relative to the self-employeds' gross labour income, this does not imply that 
such a system would indeed need to be financed via contributions. They could alternatively also be financed via general taxation. 
261  This  is  an  important  caveat  –  Table  29A  in  the  Annex  of  Brodolini  (forthcoming) provides  information  on the  corresponding amounts 
recorded in EU-SILC tentatively attributed to the self-employed. The net rates would unsurprisingly be low in the Member States where the 
self-employed already have coverage; indeed in some existing spending exceeds the simulated gross rates shown in Figure 22 (e.g. in Finland 
or Estonia, which show the highest gross rates). 

119 

 
 
 
                                                            
of corresponding sensitivity analysis: they are the resulting contribution rates in scenarios where lower (squares) or higher 
(triangles) values were assumed for the replacement rate (40% and 60%, respectively) or for the maximum duration of the 
benefit (four and eight months, respectively). For Member States with a low cost in the central scenario the variation is rather 
limited  (e.g.  AT)  whereas  for  those  where  the  estimated  cost  is  more  significant,  the  variations  in  generosity also  imply  a 
more substantial variation in cost and thereby in the simulated contribution rate (e.g. CY). 

Source: Elaborations of EU-SILC 2009-2015 cross sections 

Under the replacement rate scenario, the estimated contribution rates would be rather low in 
most cases but there is large variation across Member States. The maximum rate is just below 
1.2%,  while  the  median  rate  is  0.25%  and  the  mean  one  0.37%.  Compared  to  actual 
contribution rates in existing unemployment insurance systems, these rates are rather limited. 
In addition to the central scenario, Figure A.18 also shows the results of sensitivity analysis 
varying  the  generosity  of  the  benefit  paid  to  the  self-employed262.  While  for  most  Member 
States  resulting  variation  is  limited263,  ranges  are  quite  large  in  the  Member  States  with  the 
highest simulated contribution rates.  

The minimum level scenario featuring flat-rate unemployment benefits for the self-employed 
yields similar results for contribution rates, with a maximum of 1.7% (EE), and a median of 
0.28%  (mean:  0.44%,  see  figure  A.19);  again,  there  is  significant  variation  of  rates  across 
Member States264. Again, sensitivity analysis results in large within-country variation only for 
a small number of Member States265.  

The  low  gross  contribution  rates  resulting  from  extending  coverage  in  both  scenarios  may 
partly  reflect  possible  underreporting  of  unemployment  regarding  the  self-employed  in  the 
underlying dataset266. 

Figure A.19: Gross contribution rate to finance the unemployment benefit scheme for 
the self-employed - Minimum level scenario 

262 See notes to the figure. 
263 The mean is only 0.27% in the low duration scenario and reaches its highest value, 0.47%, in the high duration scenario. 
264 While overall differences between the two scenarios are small, whether for a specific Member State the earnings-related or the flat rate 
system  would  be  more  costly  depends  on  the  characteristics  of  the  self-employed  who  lose  their  job:  Low-income  self-employed  benefit 
more from a flat-rate system than an earning-related one. Thus in Member States where unemployment hits primarily the low-income self-
employed, a flat rate system is more costly. 
265 In the sensitivity analysis, the benefit duration was varied (four or eight months, respectively, instead of six) or the flat rate was modified 
(set at 20% or 40% of the median wage, respectively, instead of 30%). 
266 See Annex 9 for more details on the strategy to address such underreporting. 

120 

 
 
 
 
                                                            
2,4%
2,2%
2,0%
1,8%
1,6%
1,4%
1,2%
1,0%
0,8%
0,6%
0,4%
0,2%
0,0%

AT

BG CZ

DK

EL

FI

HR

IE

LT

LV

NL

PT

SE

SK

Baseline

Low duration

High duration

Low flat rate

High flat rate

Source: Elaborations of EU-SILC 2009-2015 cross sections 

b) Extending sickness benefits  

In  the case of sickness benefits simulations using EUROMOD were  not  possible due to  the 
current technical limitations of the model. Neither an alternative model was found to be able 
to capture the impact on public budgets of an extension of sickness benefits. 

Ad-hoc  simulations  using  EU  SILC  data,  analogous  to  the  ones  done  for  unemployment 
benefits have been run to quantify the cost (in terms of contribution rates) of extending access 
to sickness benefits to the self-employed. Differently from unemployment benefits that can be 
simulated  using  information  on  periods  spent  in  unemployment  or  inactivity,  there  is  no 
information in SILC on which self-employed are more likely to receive a sickness benefit, if 
this  benefit  were  provided.  The  simulation  therefore  imputed  benefits  according  to  their 
characteristics, exploiting knowledge on employees who receive such benefits. 

Based on this approach, the simulations computed the total  additional spending for sickness 
benefits at the Member State level expressed as a share of the self-employed wage bill (if only 
the  self-employed  would  bear  the  cost  of  this  additional  spending)  to  derive  corresponding 
necessary contribution rates.  

The bars in Figure A.20 represent increases in social security contributions to be paid by the 
self-employed  if  they  alone  contribute  to  the  financing  of  the  additional  sickness  benefits. 
While rates remain below ¼% in 17 Member States and even below 0.1% in eight countries, 
in countries where spending on sickness benefits to employees in the existing systems is high 
in relation to the wage bill , the rates can be much higher, reaching up to 3.0% in case of EE, 
2.6% for SE, and 2.1% for SI.  

Figure A.20: Contribution rate to finance the sickness benefit scheme for the self-
employed 

121 

 
 
 
 
 
Source: elaborations on EU-SILC 2009-2015 cross sections 

Available data did not allow for simulations regarding other social security schemes covered 
under this initiative. Nonetheless, according to available data, the EU28 average spending on 
disability benefits and on survivors' benefits, respectively, is of broadly similar dimensions as 
the one for unemployment benefits,267 which could indicate that this could also broadly hold 
for  related  expenditure  resulting  from  extending  coverage268.  Pension  expenditure  is 
significantly higher.  

It  is  worth  underlining  that  the  previous  simulations  do  not  consider  second-round  effects. 
Namely significant indirect costs can arise from possible behavioural changes associated with 
extending coverage. The associated higher labour cost can reduce labour demand (especially 
for low-skilled work), while work incentives for people paying contribution rates can also be 
reduced. In conjunction, both effects lead to employment losses.  

Indirect  labour  market  effects  also  include  those  on  overall  incentives  to  become  self-
employed269.  More  generous  social  security  benefits  for  employees  than  self-employed 
increase  the  opportunity  costs  of  being  self-employed.  The  resulting  negative  incentive  for 
self-employment would be reduced by reducing (formal and effective) coverage gaps for the 
self-employed.  Conversely,  social  security  contributions  for  self-employed  workers  may 
dampen  incentives  for  entrepreneurship  through  their  effect  on  disposable  income, 
highlighting the importance of financing choices by Member States. In this respect, it is worth 

267  According  to  ESSPROS  data,  unemployment  spending  amounted  to  1.4%  of  GDP  in  2014,  compared  to  2.0%  for disability,  1.6%  for 
survivors and 2.4% for family/children. Combined spending on healthcare and sickness amounted to 8.1% of GDP, where no breakdown is 
available separating healthcare (which can be expected to correspond to the bulk of the expenditure) from the more limited expenditure on 
sickness benefits which is of relevance in the current context. Spending related to old age amounted to 11.1% of GDP.  
268  This  would  inter  alia  assume  that  previously  uncovered  groups  have  a  broadly  similar  risk  profile  to  existing  scheme  members.  No 
evidence underpinning a contrary assumption was found. 
269  The  following  paragraph  is  partly  based  on  the  "Literature  review  on  taxation,  entrepreneurship  and  collaborative  economy", 
TAXUD/2016/DE/315.  

122 

0.15%0.14%0.63%0.19%0.79%0.08%0.21%3.00%0.03%0.21%0.36%0.11%0.18%0.43%0.03%1.48%0.04%1.72%0.10%0.04%0.08%0.21%0.09%2.56%2.06%0.35%0.04%0.00%0.50%1.00%1.50%2.00%2.50%3.00%3.50%ATBEBGCYCZDEDKEEELESFIFRHRHUIEITLTLULVMTNLPLPTROSESISKUK 
 
 
 
                                                            
noting the results presented above whereby introducing for instance a modest unemployment 
benefit  system  for  the  self-employed  could  require  only  very  modest  contribution  rates. 
Finally,  social  security  may  have  a  positive  effect  on  entrepreneurial  activity  by  creating  a 
safety  net  in  case  of  business  failure.  The  overall  empirical  evidence  on  the  net  effects  is 
mixed.  

Social Impacts 

An  increase  in  coverage  is  expected  to  have  significant  favourable  social  impacts.  The 
protection  of  previously  uncovered  groups  against  risks  is  expected  to  increase  and  thereby 
reduce uncertainty, precariousness and at risk of poverty. These impacts can be expected to be 
more pronounced under mandatory coverage given that more people would be affected by this 
measure.  

The above-mentioned EUROMOD simulations relating to coverage of the self-employed by 
unemployment  insurance  in  five  Member  States  have  also  been  used  to  estimate  the 
distributional  impact  of  extending  coverage  of  unemployment  benefits  (see  Table  A.13 
below). 

In both scenarios simulated with EUROMOD – the "earnings-related scenario" and the "flat-
rate scenario", the distributional effects would be modest if assessed from the perspective of 
the  population  as  a  whole.  Small  reductions  in  the  at-risk-of-poverty  rates  could  notably  be 
observed.  However,  among  households  with  income  from  self-employment  and  no  income 
from  dependent  employment,  the  extension  of  unemployment  benefits  to  the  self-employed 
would generally significantly reduce the incidence of being at-risk of poverty. The reduction 
would  exceed  13  percentage  points  in  one  scenario  for  Croatia,  the  Member  State  with  the 
highest unemployment risk in the simulations, while estimated decreases are in the range of 1 
to 2 ½ percentage points in most other countries and scenarios270,271. 

For  those  self-employed  who  would  be  affected  by  the  unemployment  shock,  the  social 
benefit would be far more substantial: it would significantly soften the impact of job loss on 
poverty at household level in all five Member States. Their poverty rates would decrease by a 
minimum of four percentage points, but reaching reductions of 15  – 25 percentage points in 
the other scenarios and Member States.  

Table  A.13:  Simulated  reduction  in  at  risk  of  poverty  rates  due  to  extension  of 
unemployment benefits to the self-employed272 

270 For the more restricted group of households whose main earner is self-employed, reporting that more of 50% of his earnings are derived 
from self-employment and where the latter earnings exceed the total personal income of other individual within the same household, effects 
are less pronounced and more mixed. Their at risk-of-poverty rate sees a small decrease of between 0.7 percentage point (pp) and 2.2. pps in 
Latvia and Croatia, is hardly affected in the Netherlands and increases slightly in Greece  and Italy (by up to 0.8 pp). The less favourable 
results  (compared  to  the  overall  group  self-employed)  for  instance  in  the  case  of  Italy  may  inter  alia  reflect  that  the  risk  of  these  self-
employed of becoming unemployed is lower than on average in the group. 
271 The above-mentioned ad-hoc simulations looking at the extension of unemployment benefits to the self-employed under two scenarios 
with  revenue-neutral  contribution  rates  for  all  EU  Member  States  yield  limited  distributional  impacts  at  the  aggregate  level.  This  is 
accompanied by a small but noticeable reduction in poverty for the self-employed in many Member States and scenarios. For many Member 
States,  the  reduction  in  poverty  is  more pronounced  in  the  earnings-related  than  in  the  flat-rate scenarios.  The  limited  quantitative  size  of 
results reflects the limited number of self-employed moving to unemployment and the low generosity of the simulated schemes, as well as 
the cost neutrality assumptions where the self-employed pay the entire cost of the benefit extended to them. Complementary scenarios where 
the  cost  of  extending  the  benefit  was  spread  among  all  in  the  labour  market  (again  expressed  as  a  contribution  rate,  the  ratio  of  the  cost 
relative to all labour income from employment and self-employment) still generate small distributional results at the aggregate level, but in 
many  cases  a  somewhat  bigger  (albeit  still  limited)  decrease  in  the  poverty  risk  of  the  self-employed.  See  Tables  41-46  in  Brodolini 
(forthcoming) and the corresponding annex with further sensitivity analysis.  
272 The corresponding results are presented in the main body of Brodolini (forthcoming) for HR, IT and LV, and in the annex (scenarios 5 
and 6) for GR and NL. 

123 

 
 
 
                                                            
Absolute difference relative to baseline 

Italy  
The Netherlands 
Greece273 
Latvia 
Croatia 

All 

Self-employed 

Earnings-
rel. 
-0.3 
-0.2 
-0.1 
-0.1 
-1.2 

Flat-
rate 
-0.5 
-0.2 
-0.1 
-0.3 
-1.1 

Earnings-rel. 

-1.3 
-1.8 
-0.6 
-1.1 
-12.1 

Flat-
rate 
-2.5 
-1.7 
-0.4 
-5.9 
-13.2 

Earnings-rel. 

Previously self-
employed unemployed 
Flat-
rate 
-23.4 
-21.9 
-16.9 
-22.2 
-24.7 

-14.8 
-22.7 
-19.1 
-3.6 
-22.9 

Simulations done to extending formal coverage of unemployment insurance to self-employed 
in  the  case  of  Latvia274  shed  also  light  on  the  social  impacts  of  effective  coverage.  In  the 
earnings-related scenario recreated in these simulations, existing time thresholds are extended 
to the self-employed previously not covered in the scheme. This scenario results in relatively 
low effective coverage since only 65.1% of previously self-employed unemployed qualify for 
the  benefit.  In  an  alternative  flat-rate  scenario,  effective  coverage  is  100%  by  design  as  the 
benefit  is  paid  to  all  previously  self-employed  unemployed.  The  simulations  result  in 
reduction  in  the  at-risk-of-poverty  rate  for  the  households  depending  on  self-employed 
income275 much more pronounced (by 4.6 pp) in the second scenario, reflecting differences in 
both effective coverage and in benefit generosity276.  

3. Quantifying effectiveness, budgetary and distributional impacts of relaxing qualifying 
periods for unemployment benefit schemes 
The  effects  of  adjusting,  i.e.  relaxing,  qualifying  periods  (for  all  potential  unemployed)277 
have  been  quantified  in  dedicated  microsimulations  by  the  European  Commission's  Joint 
Research Centre (JRC)278. In a first scenario,  qualifying periods are reduced to 40% of the 
reference  period  in  15  Member  States279.  This  results  in  increased  effective  coverage,  by 
between as little as 1 pp (in AT, LU and the UK) to up to 13-17 pps. in Latvia, Portugal and 
Belgium. The positive impact on disposable household incomes would be strongly focused on 
the  lowest  quintiles  of  the  income  distribution,  where  it  exceeds  1%  in  two  Member  States 
(PT and LV). A small decline in the overall at-risk-of-poverty rate would be accompanied by 
a more significant reduction for the group of the unemployed, with the most pronounced fall 
resulting in Austria, Cyprus and Latvia (by around 1 pp). 

On the fiscal side, the policy measure increases the net costs280 for the unemployment benefit 
by  between  0.02%  and  0.13%  of  GDP,  depending  on  the  Member  State.  Such  a  change 

273 See footnote 233 above. 
274 Results of the above-mentioned EUROMOD simulations.  
275 I.e. households with income from self-employment and no income from dependent work. 
276 The reduction is jointly driven by the differences in effective coverage and in benefit generosity - for Latvia, the flat rate scenario also has 
a significantly more generous benefit compared to the average benefit paid in the earnings-related scenario. 
277 Changing minimum eligibility conditions by reducing the qualifying period to 50% or 40% of the reference period. 
278  ZEW  and  JRC  (2017):  Convergence  of  unemployment  benefits  schemes  in  Europe:  Evidence  at  the  Micro  Level.  Study  finished  in 
January 2017. 
279 AT, BE, BG, CY, IT, LU, LV, NL, PL, PT, RO, SE, SK and the UK - for the Member States where eligibility criteria were already less 
strict, no changes were simulated.  
280 Net costs are calculated as potential gross costs of simulated addition or changed unemployment benefits minus personal income taxes 
or/and social contribution paid (for the countries, where unemployment benefits are taxed) and minus foregone social assistance payments. 

124 

 
 
 
 
 
 
                                                            
positively  affects  disposable  household  income  especially  for  the  poorer  households  which 
have  a  larger  propensity  to  consume.  Thus,  consumption  related  tax  revenues  are  also 
expected to increase. Because of the increased consumption tax revenues, the net fiscal cost of 
the reforms could be reduced by around 10-15% for most of the countries281. In a similar vein, 
the  simulated  net  cost  takes  into  account  significant  simulated  savings  on  social  assistance 
spending resulting from the policy measure.  

At  the  same  time,  the  study  also illustrates the  trade-offs involved  in  addressing effective 
coverage  by  adjusting  time  thresholds  as  the  policy  measure  would  generally  reduce  the 
incentives to take up a job282. 

Note  that  estimates  of  net  costs  are  based  on  approximations  (e.g.,  the  average  tax  rates  by  income  quintiles  of  unemployment  benefit 
recipients and ceased social assistance benefits). The social contribution side to offset the costs of the reform is left unchanged. 
281 Relatively smaller increased spending is expected in Lithuania (5% of the estimated net costs), followed by Spain and the UK (9% on 
average).The change in consumption tax revenues due to the reform will depend on the propensity to consume of each income group on the 
impact of convergence at the bottom of the income distribution and the existing tax burden on consumption in each Member State. 
282 The unemployment trap indicator measures the short-term financial incentive for an unemployed person receiving unemployment benefit 
to take up a job. It measures what part of an increase in gross income due to the changed employment status is taxed away because of direct 
taxes or withdrawal of social benefits. The higher the index, the lower the initiative to move from unemployment to paid employment. The 
unemployment trap indicator for Portugal and Belgium would increase by around 5-9 points for both sexes (more strongly for women), from 
an already high level. Significant increases (by 6-7 point) would be observed also for Latvia and Bulgaria. 

125 

 
 
                                                                                                                                                                                          
Table A.14: Impacts of packages 

PACKAGES 

ECONOMIC 

IMPACTS 

SOCIAL 

PUBLIC AUTHORITIES  

- Impact on business (SME included) 

-Operating (labour costs) and conduct of 
business 

- Competitiveness and unfair competition 

- Employment (mobility, transitions, skills, 
labour market segmentation) 

- Budgetary consequences 

- Public authorities organisation 

- Working conditions  

- Social protection (income insecurity, poverty, 
precariousness, inequality) 

COSTS 

BENEFITS 

COSTS 

BENEFITS 

COSTS 

BENEFITS 

PACKAGE A 
(BASELINE) 

 Unfair competition 

 Absence  of  level  playing 
field  below  employment 
and  contract  forms  distorts 
competition 
factor 
allocation  

and 

 Restrained  mobility  and 
employment transitions 

 Decreasing 
role of social security 

stabilisation 

 Social dumping 

 Individualisation of 
social risk 

 Increase of 
precariousness  

 Higher poverty risk 
for increasing share of 
people in the labour 
market 

 Increase of intra and 
inter-generational 
inequality  

 Negative  impacts 
on  the  sustainability 
of  social  security 
by 
systems 
weakening 
the 
revenue base  

 No extra cost 
to 
due 
reorganisation 
of 
security 
systems 

the  social 

 Possible 
increase 
in cost of last resort 
safety  nets  (social 
assistance, 
minimum  pensions 
etc.) 

PACKAGE B 

 Some  increase  in  the  cost 
of  managing  fluctuations  in 
production 
line  with 
in 
some  cost  increase  of  NSE 
and SE. 

labour 

 Some 
improvement  
market 
of 
dynamism 
(depending 
on the rate of opting-in) 

 Depending 
on 
choices, 
financing 
redistribution 
some 
within 
newly 
the 
covered,  as  affected 
unequally  by  benefits 

 More  pronounced  reduction 
of  number  of  self-employment 
and  non-standard  workers  at 
risk of poverty, when the social 
risk  materialises  (will  depend 
rate  of  opting-in), 
on 

the 

 Noticeable cost of 
extending coverage 
(to be borne by 
public authorities, 
i.e. taxpayers, or the 
concerned groups 

 Possibly 
some  reduction 
of 
the 
expenditure  on 
resort 
last 

126 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Some improvement of 
playing  field  between 
and 
employment 
forms  with 
contract 
effects 
corresponding 
and 
competition 
on 
factor allocation  

vs. 
contributions, 
taxes  or  lower  wages 
in  the  case  of  NSE  if 
employers pass on the 
cost 
their 
of 
contributions 

 Some improvement of 
stabilisation  function  of 
protection 
social 
upholding 
aggregate 
demand  by  providing 
counter-cyclical 
spending 
economic downturns  

during 

 Possible 
trade-off 
between  NSE  and  SE 
labour  demand  if  the 
rate  of  self-employed 
enrolling is low 

 Slightly  higher  risk 
of  some  reduction  in 
through 
employment 
adverse 
possible 
labour 
effects 
demand and supply 

on 

including  after  labour  market 
transitions 

de-segmentation 
market, 

of 
Partial 
reducing 
labour 
somewhat 
by 
incentivising  the  wider  use  of 
standard employment.  

inequality, 

 Improved  transferability  and 
as  well 
as 
transparency 
reduction 
coverage 
in 
differences  strongly  facilitate 
labour  market  transitions  and 
thereby,  improve  matching  of 
people with jobs. 

safety nets. 

via contributions, 
depending on 
financing choices) 
and some cost for 
improving 
transparency 

 Limited 
increase 
in  social  security 
contributions. 

 Possible financial 
burden to introduce 
administrative 
reforms.  

taking  on 

 Partial  removal  of  obstacles 
that  may  discourage  employees 
risks 
from 
associated 
self-
employment,  improving  factor 
allocation  

with 

the 

PACKAGE C 

in 

 More 
increase 
managing 
production 
more 
increase of NSE. 

pronounced 
the  cost  of 
in 
line  with 
cost 

fluctuations 
in 
pronounced 

labour 

 Marked  improvement 
market 
of 
dynamism 
(depending 
on the rate of opting-in) 

 Marked  improvement 
of playing field between 
and 
employment 
forms  with 
contract 
strong 
corresponding 
effects  on  competition 
and factor allocation  

 Marked  improvement 

 Limits to  the  freedom 
of  choice  and  possibly 
inefficient 
overinsurance  of 
self-employed 
mandatory 
security schemes. 

the 
through 
social 

reduction 

 Marked 
of 
number  of  self-employment 
and  non-standard  workers  at 
risk  of  poverty,  when  the 
risk  materialises, 
social 
including  after  labour  market 
transitions 

 De-segmentation  of  labour 
market,  reducing  inequality, 
by incentivising the wider use 
of standard employment. 

 Depending 
on 
financing  choices,  more 
pronounced 
redistribution within the 
newly 
as 
affected  unequally  by 

covered, 

127 

 High cost of 
extending coverage 
(to be borne by 
public authorities, 
i.e. taxpayers, or the 
concerned groups 
via contributions, 
depending on 
financing choices), 
and high cost of 
changes in existing 
system to move to 
personal accounts  

 Possible financial 

 Increase 
in 
social  security 
contributions. 

 Possibly 
more 
pronounced 
of 
reduction 
the expenditure 
on 
last  resort 
safety nets. 

 
 
 
 
 
 
 
 
  
 
  
 
  
 
 
 
 
 
 
 
 
 
 
 
of  stabilisation  function 
protection 
social 
of 
upholding 
aggregate 
demand  by  providing 
counter-cyclical 
spending 
economic downturns. 

during 

benefits 
vs. 
contributions,  ,  taxes  or 
lower wages in the case 
of  NSE  if  employers 
pass on the cost of their 
contributions 

 Improved 
transferability 
in 
sharp 
and 
reduction 
coverage  differences  strongly 
labour  market 
facilitate 
transitions 
thereby, 
and 
improve  matching  of  people 
with jobs.  

burden to introduce 
administrative 
reforms.  

 Some  risk  of  some 
in 
reduction 
through 
employment 
possible  adverse  effects 
on  labour  demand  and 
supply  

obstacles 

 More  pronounced  removal 
of 
that  may 
discourage  employees  from 
taking  on  the  risks  associated 
with 
self-employment, 
improving factor allocation 

128 

 
 
 
 
 
 
 
 
 
 
 
 
 
Context - the European Pillar of Social Rights 

ANNEX 11: STAKEHOLDER CONSULTATION 

On  8  March  2016,  the  European  Commission  adopted  a  Communication  putting  forward  a 
first, preliminary outline of what should become the European Pillar of Social Rights283. The 
Communication set out the rationale behind the initiative and its role, scope and nature284. 

On this basis, the Commission launched from March until 31 December 2016 a broad public 
consultation  to  gather  feedback  on  the  proposed  outline  to  feed  into  its  final  proposal.  The 
consultation aimed at discussing existing social rights, the changing realities of the world of 
work and societies, and the role of the Pillar as part of the social dimension of the Economic 
and Monetary Union. A European conference took place on 23 January 2017 to wrap up this 
consultation  process285.  How  to  ensure  social  protection  for  people  in  all  forms  of 
employment was a central topic in the consultation process. 

Stakeholder  stated  that  "adequate  and  sustainable  social  protection  should  cover  all  people 
regardless of their employment status, with due consideration for the most vulnerable, based 
on an integrated approach of benefit and service delivery, including accessible and sustainable 
healthcare that takes into account the national circumstances, and quality long-term care based 
in  particular  on  homecare  and  community-based  services,  as  well  as  adequate  housing  and 
support to the homeless towards their social reintegration. Adequate unemployment benefits 
of  reasonable  duration  as  well  as  adequate  minimum  income  schemes  should  provide  a 
resilient  social  protection  floor  capable  to  labour  market  reintegration.  Pension  systems 
should provide adequate protection against old-age poverty while assuring sustainability with 
a  view  to  protect  the  future  generation  and  provide  the  necessary  resources  for  a  childhood 
without poverty".286 

Other  EU  institutions  also  contributed  to  the  relevant  debate.  Whereas  the  European 
Economic and Social Committee287, ("considers it imperative that the debate launched by the 
European Commission on developing a European Pillar of Social Rights also encompass the 
situation of workers engaged in the new forms of employment and, above all, look at how to 
recognise  their  status  and  ensure  they  have  adequate  access  to  social  security  and  social 
protection  systems")  and  the  Committee  of  Regions288  ("believes  that  the  new  employment 
forms  or  the  introduction  of  new  common  EU  minimum  standards  must  always  allow  for 
appropriate  standards  of  social  protection")  brought  relevant  elements  into  the  debate,  the 
European Parliament289 went further and called for a "recommendation enabling all people in 
all employment forms and self-employment". 

283 COM (2016) 127 final. 
284 It was accompanied by two Staff Working Documents: the first one describing key economic, labour market and societal trends on which 
the Pillar builds and which it should contribute to address; the second one recalling the most relevant legal acquis at EU level. Commission 
Staff Working Documents "Key economic, employment and social trends behind the European Pillar of Social Rights" (SWD (2016)  51), 
and "The EU social acquis" (SWD (2016) 50) of 8 March 2016. 
285 Conference website. 
286 SWD(2017) 206 final, available online. 
287 EESC SOC/542, available online 
288 COR opinion 2868/2016, available online. 
289 EP resolution 2016/2095(INI), available online. 

129 

 
 
 
 
 
                                                            
The access to social protecion initiative 

Several stakeholder consultations have been performed to inform this initiative. This includes 
a  two-stage  consultation  procedure  of  European  social  partners  as  stipulated  in  Article  154 
TFEU and an Open Public Consultation. 

1. Results of the inception impact assessment 

The  Commission  received  nine  items  of  feedback  to  the  inception  impact  assessment  from 
individuals/entities in the Netherlands (6), Belgium, Germany and the UK. The feedback from 
people/associations in the Netherlands stress subsidiarity and that self-employed would like to 
be  responsible  for  their  decisions  they  take,  including  for  insuring  risks.  The  contribution 
from  a  business  organisation  in  the  UK  considers  voluntary  schemes  easier  to  implement 
across Member States in the short- to medium-term (2-5 years), but require implementation at 
the  national  level  and  could  be  difficult  for  governments  to  agree.  The  feedback  of 
EuroHealthNet  focus  on  the  great  role  Social  Protection  has  in  the  goal  of  reducing  health 
inequalities and the umbrella associations of the German Social Insurance (DSV) supports the 
discussion on access to social protection and to make social protection systems future-proof in 
a changing world of work. 

2. Results of the first phase Social Partners consultation 

The first phase of social partner consultation was launched on 29 April and closed on 23 June 
2017. 

The  trade  unions  that  replied  to  the  consultation  were  the  European  Trade  Union 
Confederation  (ETUC),  Eurocadres  and  the  European  Confederation  of  Executives  and 
Managerial  Staff  (CEC),  the  European  Confederation  of  Independent  Trade  Unions  (CESI), 
the  European  Arts  and  Entertainment  Alliance  (EAEA)  and  the  European  Federation  of 
Journalists (EFJ). It should be noted that ETUC's reply also took into account the view of 10 
ETUC sectorial trade union organisations. 

On  the  side  of  the  employers,  replies  to  the  consultation  were  sent  by  BusinessEurope,  the 
European  Centre  of  Employers  and  Enterprises  providing  Public  Services  (CEEP), 
EuroCommerce,  the  European  Association  of  craft,  small  and  medium-sized  enterprises 
(UEAPME), the Council of European Employers of the Metal, Engineering and Technology-
Based Industries (CEEMET), the Council of European Municipalities and Regions (CEMR), 
the  European  Chemical  Employers  Group  (ECEG),  the  Hotels,  Restaurants  and  Cafés  in 
Europe (HOTREC), the Retail, Wholesale and International Trade Representation to the EU 
(EuroCommerce),  the  Employers'  Group  of  the  Committee  of  Agricultural  Organisations  in 
the European Union (GEOPA-COPA) and the World Employment Confederation (WEC).  

Identification of issues related to access to social protection 

The  social  partners  agreed,  largely,  that  there  are  problems  related  to  access  to  social 
protection for workers in non-standard forms of employment and for the self-employed. 

However,  employers  stressed  that  grouping  very  different  types  of  employment  forms 
together  under  the  heading  of  'non-standard'  is  not  appropriate  as  it  ignores  the  diversity 
between these different forms and the need and desires of those working under them, also in 
terms  of  access  to  social  protection  (BusinessEurope).  WEC  highlighted  in  addition  the 
heterogeneity within the self-employed. UEAPME called for a solid mapping exercise of the 
national policies, the availability and offer of tailored social protection schemes, and the take-

130 

 
 
up broken down by different groups. CEEP highlight the different labour  market and social 
models, which explain different levels of protection. 

On  the  other  hand,  trade  unions  found  that  the  identification  of  issues  goes  in  the  right 
direction,  but  could,  nevertheless  be  improved  upon  by  specifying  that  new  forms  of  work 
entail  poor  job  quality  and  insecure  conditions,  which  lead  more  to  a  lack  of  protection 
against  life  risks  than  to  real  job  opportunities  (ETUC,  Eurocadres).  The  issues  could  be 
extended to a right to collective bargaining, fair remuneration for all and the right to freedom 
of association for all workers (EFJ). Trade unions further underlined that consistency should 
be  ensured  with  proposals  about  information  on  the  social  security  system  in  the  Written 
Statement Directive. (ETUC, Eurocadres). 

Most relevant branches of social protection and employment services 

Trade  unions  consider  all  branches  to  be  equally  important  and  promote  an  integrated  and 
holistic approach to social protection, notwithstanding the points above about the distinctions 
between the policy fields, including all branches covered by the ILO convention 102 (and the 
Regulation  on  social  security  coordination).  If  a  prioritisation  has  to  be  made,  CEC  would 
favour those who are not universal. Access to related employment services should be granted 
to all. 

The picture at the employers' side is mixed. BusinessEurope considers that the question pre-
supposes  that  there  will  be  an  EU  initiative  in  this  field  (which  the  organization  is  not  in 
favour  of).  EuroCommerce  questions  the  feasibility  of  the classification  of  social  protection 
strands, while COPA prioritises accident at work and occupational diseases. HOTREC refers 
to  social  protection  as  a  national  level  competence,  but  stresses  that  skills,  education  and 
training should be easily accessible to all citizens. 

Personal scope of an EU initiative 

In general, trade unions are in favour to have a wide personal scope and to include all workers 
in  non-standard  forms  of  employment  as  well  as  the  self-employed  in  an  EU  initiative. 
However,  some  call  in  the  first  place  for  the  definition  of  principles  to  set  a  common 
understanding  at  EU-level  of  the  legal  nature  of  the  different  forms  of  employment  (CEC, 
CESI). 

Employers are rather reluctant to reply the question on the personal scope of the EU initiative 
because  they  are  not  in  favour  of  an  EU  initiative  (BusinessEurope)  or  they  refer  to  the 
principle of subsidiarity (HOTREC) or they consider that the personal scope would depend on 
the  nature  of  the  respective  initiative  (EuroCommerce).  CEMR  emphasizes  on  the  need  for 
more clarity in the definition of the legal nature of the different forms of employment whereas 
COPA  would  include  all  workers  in  non-standard  employment  in  an  EU  legal  initiative  but 
would include the self-employed only in a recommendation. 

EU legislation and EU level instruments 

BusinessEurope,  UEAPME  and  EuroCommerce  do  not  consider  that  changes  to  EU 
legislation in this field are needed or appropriate. The open method of coordination and the 
European  Semester  process,  including  benchmarks,  would  be  the  right  tools  for  mutual 
learning  and  exchanges  of  good  practice.  The  aim  should  be  to  improve  national  policy 
responses by learning from relevant other national practices. Other employers' organisations 
draw  the  attention  to  sectorial  social  dialogue  (COPA),  Member  State  competences  and  the 

131 

 
 
principles  of  subsidiarity  and  proportionality  (CEEMET,  ECEG,  EuroCommerce,  WEC  and 
CEEP).  

The trade union side considers that improvements should be made to EU legislation. ETUC 
and  CESI  see  the  need  for  better  enforcement  of  existing  legislation,  especially  at  national 
level.  CEC  mentions  that  the  need  for  reducing  the  administrative  burden  that  can  be 
associated with the provision of information concerning an individual's employment situation 
and ensuring an effective transferability of all entitlements. 

Willingness to enter into negotiations 

All of the trade unions have indicated their willingness to enter into negotiations. However, in 
the event that the EU social partners do not agree to negotiate, or in case negotiations do not 
lead to a successful outcome, trade unions urge the Commission to come up with a legislative 
proposal. 

Employers are not considering initiating a dialogue under Article 155 TFEU because they do 
not  see  the  need  for  EU  level  action,  apart  from  peer  learning  and  exchange  of  practices 
(BusinessEurope)  or  because  subsidiarity  prevails  in  this  topic  (HOTREC,  UAPME)  and  it 
can  be  better  dealt  with  by  national  governments  (EuroCommerce)  or  in  sectorial  social 
dialogue (COPA). CEEP underlines that valid indicators have to be defined in the first place. 

Scope of the consultation 

ETUC missed clear proposals on the creation of quality jobs – with agreed indicators to track 
them,  including  for  access  to  social  protection.  Therefore,  ETUC  considered  the  identified 
key aspects of insufficient access (gap in access to social protection, lack of transferability of 
rights as well as lack of transparency about their social protection entitlements) as important 
challenges to be tackled, but would put the emphasis on challenging divergent social rights of 
people with respect to social protection and employment services. 

Additional consultation of social partners 

DG  Employment  and  Social  Affairs  has  conducted  bilateral  meetings  with  all  16  social 
partners  who  submitted  a  contribution  to  the  first  phase  social  partner  consultation.  These 
meetings took place between 14 July and 5 September. The purpose of the bilateral meetings 
was  to  focus  on  technical  clarifications  and  gathering  additional  information  where  ever 
possible. The information received is presented in the relevant chapters of this document.  

3. Results of the second phase Social Partners consultation 

The second phase of social partner consultation was launched on 20 November and closed on 
5 January 2018. 

The  trade  unions  that  replied  to  the  consultation  were  the  European  Trade  Union 
Confederation  (ETUC),  Eurocadres  and  the  European  Confederation  of  Executives  and 
Managerial  Staff  (CEC),  the  European  Confederation  of  Independent  Trade  Unions  (CESI), 
the European Arts and Entertainment Alliance (EAEA) and UNI global union europa and the 
World Employment Confederation (WEC).  

On  the  side  of  the  employers,  replies  to  the  consultation  were  sent  by  BusinessEurope,  the 
European  Centre  of  Employers  and  Enterprises  providing  Public  Services  (CEEP), 
EuroCommerce,  the  European  Association  of  craft,  small  and  medium-sized  enterprises 
(UEAPME), the Council of European Employers of the Metal, Engineering and Technology-

132 

 
 
 
Based  Industries  (CEEMET),  the  European  Chemical  Employers  Group  (ECEG),  and  the 
Hotels, Restaurants and Cafés in Europe (HOTREC).  

The objectives of coverage, transferability and transparency 

Trade  unions  share  the  initiative's  objectives  of  coverage,  transferability  and  transparency. 
Formal  and  effective  coverage  is  of  utmost  importance  for  ETUC  and  access  to  adequate 
social  protection  should  be  added.  Contributions  and  benefits  (for  self-employed  and  non-
standard workers) should be as equal as possible to those for standard work contracts (CESI). 
Tying social protection rights to individuals should not lead to an individualisation of social 
protection  and  the  collective  dimension  must  remain  (EAEA).  Full  transferability  and 
accumulation of these rights, benefits and entitlements should be ensured, no matter the form 
or  duration  of  employment  (UNI  Europa).  The  importance  of  access  to  training  and 
employment services was also highlighted (Eurocadres). All trade unions agree with the need 
for higher transparency.  

The picture at the employers' side is rather mixed. Most employers' organisations agree with 
the three objectives to a large extent but highlight the Member States' competence in this field 
(BusinessEurope, EuroCommerce, CEEMET, CEEP and UAPME). 

ECEG  does  not  share  the  view  that  non-standard  workers  and  self-employed  have  limited 
access to social protection and sees no need to explore a common definition of a worker at EU 
level. 

HOTREC  agrees  on  the  need  of  increased  transparency  but  argues  that  the  subsidiarity 
principle prevails and favours therefore a mapping of transferable systems at national level.  

The options of mandatory or voluntary formal coverage 

All  trade  unions  favour  mandatory  formal  coverage,  equalised  to  those  of  standard  workers 
(ETUC, EAEA) but national traditions should be taken into account (CEC). 

Employers  expressed  different  views  on  these  options.  ECEG  agrees  that  social  protection 
should  be  mandatory  but  employees  should  have  the  right  to  choose  the  form  of  coverage 
(public or private). BusinessEurope highlighted the freedom of choice for the self-employed. 
CEEP and EuroCommerce favour voluntary formal coverage in order to take into account the 
diversity of forms of employment of the heterogeneity within the self-employed. HOTREC, 
CEEMET and UAPME referred to subsidiarity that should prevail. 

The appropriate action to ensure effective coverage  

Trade  unions  and  employers  have  opposite  views  on  the  appropriate  action.  Trade  unions 
favour  extending  and  adapting  existing  schemes  to  people  in  all  forms  of  employment 
(ETUC), by going as far as possible under the Treaties (CESI). An EU directive with binding 
minimum  principles  and  requirements  is  mentioned  (Uni  europa,  eaea)  but  it  should  not 
undermine existing EU acquis, nor  lower existing national standards,  nor lead to  downward 
harmonisation of rights. 

On  the  other  hand,  employers'  organisations  are  opposed  to  legally  binding  actions  in  this 
field  as  they  argue  that  the  subsidiarity  principle  prevails  (ECEG,  HOTREC)  but  would 
welcome  the  use  of  the  OMC,  the  European  Semester,  an  exchange  of  best  practices, 
benchmarking  and  the  social  scoreboard  (BusinessEurope).  Some  employers'  organisations 
(CEEP and EuroCommerce) consider a Council Recommendation to be suitable. 

The minimum requirements appropriate to ensure transferability and transparency 

133 

 
 
According to trade unions, labour market trends call for a certain common minimum standard 
in the field of social protection (CESI). Full portability should be guaranteed by tying social 
protection  entitlements  to  individuals  through  an  equalised  calculation  and  aggregation  but 
without leading to an individualisation of social protection (ETUC).  

Some  employers  agree  with  the  principle  of  transferability  of  rights  but  call  for  an  impact 
assessment before creating legally binding realities (ECEG) or argue that subsidiarity prevails 
and that a mapping of existing transferable systems should be favoured (HOTREC). 

Others  recommend  the  EU  to  limit  itself  to  general  provisions  (UAPME)  or  would  like  to 
limit transferability to minimum social protection rights (EuroCommerce). The administrative 
cost  of  transferability  should  be  kept  at  a  minimum  and  no  additional  costs  for  the  new 
employer to take on the provision of the transferred rights should occur (CEEP). 

Willingness to enter into negotiations 

All of the trade unions have indicated their willingness to enter into  negotiations. However, 
ETUC  was  convinced  that  the  conditions  for  formal  negotiations  no  longer  exist  and  other 
trade  unions  urge  the  Commission  to  come  up  with  a  legislative  proposal  before  the  2019 
European  elections.  Employers  are  not  considering  initiating  a  dialogue  under  Article  155 
TFEU because they do not see the need for EU level action. 

4. Results of the public consultation  

The  open  public  consultation  (OPC)  was  open  from  20  November  2017  until  15  January 
2018.  119  respondents  replied  to  the  OPC  of  which  62  organisations,  7  administrations,  37 
citizens and 13 others (e.g. research institutes, networks). Most replies came from  countries 
with well-developed social protection systems like Germany (18), Belgium (16), France (15) 
and Sweden (14). 15 position papers were received, mainly from Germany (5), Belgium (4), 
France (2) and the UK (2), and covering regional and central governments, social protection 
providers,  cooperatives,  organisations  of  self-employed,  a  trade  union,  a  non-governmental 
organisation and a company.  

Challenges 
"Do you agree with the identification of the challenges outlined in the background document?" 

Around 2/3 of the respondents agreed with the challenges identified by the Commission. The 
highest agreement was on gaps in effective coverage, followed by regulatory complexity. 

Gaps in formal coverage 
Gaps in effective coverage 
Insufficient transferability 
Insufficient transparency 
Regulatory complexity 
There are other challenges 

Principles 

I agree (replies out of 119 replies) 
66 
78 
65 
69 
75 
62 

"Do you think that the following general policy principles should be pursued by a possible EU 
initiative?" 

134 

 
 
 
 
 
 
 
The great majority of the respondents largely agreed that the principles should be pursued by 
a  possible  EU  action  include  the  provision  of  adequate  social  protection  to  all  workers 
regardless  of  their  employment  relationship,  tying  rights  to  individuals  as  they  work  and 
making  rights  transferable,  making  information  transparent  and  simplifying  administrative 
requirements. Only 14 respondents did agree with the option that 'no action was required'  

Regardless of the type and duration of their employment relationship, 
workers,  and,  under  comparable  conditions,  the  self-employed,  have 
the right to adequate social protection 

Tying rights to individuals as they work (and not to the contract) and 
making rights transferable 

Making rights and related information transparent 

Simplifying administrative requirements 

No action required 

Options 

I  agree  (replies  out 
of 119 replies) 

85 

72 

86 

82 

14 

In  relation  to  the  options  listed,  69.7  %  of  the  respondents  said  that  social  protection  rights 
and obligations should be mandatory for every kind of job, irrespective of the type of contract 
and  56.3  %  of  the  respondents  consider  that  the  mandatory  protection  and  contributions  of 
non-standard workers should be aligned to the level of standard workers 

64.7  %  or  the  respondents  think  that  social  protection  rights  and  obligations  should  be 
mandatory  for  all  self-employed  and  47.1  %  of  the  respondents  think  that  mandatory 
protection and contributions  of the self-employed  should be aligned to the level  of standard 
workers. 

Finally 52.94 % of the respondents think that a single social protection scheme covering all 
people in employment would be the most appropriate way to ensure effective coverage. Even 
54.6  %  of  the  respondents  consider  a  single  social  protection  scheme  appropriate  for  self-
employed. 

Instruments 

Almost  three  quarters  of  the  respondents  (72.3  %)  highlight  the  need  for  an  EU  level 
action.54.6  %  of  the  respondents  consider  the  introduction  of  a  new  EU  legislation  (e.g.  a 
directive)  as  highly  effective.  Only  4.2  %  of  the  respondents  think  that  soft  EU  legislation 
(e.g. a Council recommendation) would be highly effective. 

Impacts 

135 

 
 
 
 
 
 
 
According to the large majority of the respondents, the impact of making social protection 
rights mandatory to all forms of employment would be positive for the European society, the 
labour market, the workers, public finances and the economy 

"According to your assessment, the impact of making social protection rights mandatory in 
all forms of employment would be positive, neutral or negative for: The economy" 

Positive (replies out of 119 replies) 

Competitiveness 

Resilience and adaptability 

Economic growth 

73 

72 

72 

but rather neutral on small and medium sized enterprises (SMEs) 

"According  to  your  assessment,  the  impact  of  making  social  protection  rights  mandatory  in 
all forms of employment would be positive, neutral or negative for: Small and medium sized 
enterprises" 

Neutral (replies out of 119 replies) 

Cost 

Competition 

51 

45 

On  the  other  hand,  the  impact  of  making  social  protection  rights  voluntary  where  gaps 
currently  exist  would  have  a  neutral/negative  impact  on  the  European  society,  the  labour 
market, the workers, public finances and the economy. 

"According to your assessment, the impact of making social protection rights voluntary where 
gaps currently exist would be: The economy" 

Negative (replies out of 
119 replies 

Neutral (replies out of 119 
replies) 

Competitiveness 

Resilience and adaptability 

Economic growth 

45 

49 

49 

43  

40 

41 

but rather neutral on small and medium sized enterprises (SMEs) 

"According to your assessment, the impact of making social protection rights voluntary where 
gaps currently exist would be: Small and medium sized enterprises" 

Neutral (replies out of 119 replies) 

Cost 

55 

136 

 
 
 
 
 
 
 
 
 
 
 
Competition 

62 

137 

 
 
 
 
 
Position papers 

18  respondents  sent position  papers of  which 4 (local, regional and central)  governments, 4 
direct selling organisations, 2 social insurance organisations and 2 civil society organisations. 
Most  replies  were  received  from  Germany  (7)  followed  by  Belgium  (5).  In  general,  the 
senders agreed with the challenges but called for the respect of the subsidiarity principle.  

On  the  options  the  pictures  was  mixed.  Whereas  some  are  in  favour  of  voluntary  schemes 
(Deliveroo,  Scottish  government,  Federation  –  direct  selling),  others  defend  the  idea  of 
mandatory coverage (Smart). 

The  senders  mentioned  as  instruments  to  be  used,  a  Council  Recommendation  (Scottish 
government),  a better use  of the open method of  coordination (German central government, 
Federation  –  direct  selling),  the  European  Semester  (Dutch  Counsellor  for  Employment, 
REIF)  and  the  exchange  of  best  practices  (Franchiseverband,  CDH,  BDD).  Others  favour 
binding instruments such as a Framework Directive on Minimum Income (Save the children 
and Social platform) or an adequate legal framework for cooperatives of independent workers  
and salaried entrepreneurs (CECOP). 

As  regards  financing,  some  proposed  a  broadening  of  the  financing  base  (Smart)  whereas 
others  defend  a  fiscal  neutral  approach  (County  of  Vienna).  A  common  point  for  the  direct 
selling sector  in  Germany was the need  to  adapt social protection  thresholds  to  real income 
and not to a fictive income (BDD, CDH, Franchiseverband). 

Targeted Hearings 

· 

Exchange of views with Social Protection Committee (1 December2017)  

Delegations  stressed  the  importance  of  the  topic,  and  highlighted  its  complexity:  solutions 
might  differ  for  non-standard  workers  and  self-employed  (DE,  MT,  NL,  HU,  DK)  and  by 
social  protection  branches  (DK).  A  couple  of  delegations  stressed  that  the  issues  are  not  so 
prominent  in  their  country  where  social  protection  system  is  not  based  on  the  type  of 
employment  relationship  (FI,  HU).  One  country  stressed  that  the  financing  of  social 
protection  is  a  key  issue  wherever  social  protection  is  financed  by  salary-based  social 
contributions  (FR).  Some  countries  are  already  in  the  process  of  reforming  their  social 
protection systems (IT, PT, UK). Delegations were in favour of encouraging mutual learning 
activities on this topic; one country (IT) supported the idea of a strong legal instrument; two 
countries (AT, SE) were open to such idea, while ten countries (DE, DK, MT, NL, PT, HU, 
FI, LT, UK and IE) expressed doubts about the possibility to adopt a legal instruments while 
respecting subsidiarity in this field.  

· 

Hearing with representatives of self-employed (14 December 2017) 

Out of the 24 organisations invited, only seven attended the hearing. All participants agreed 
with  the  Commission's  analysis  but  have  underlined  some  specific  issues.  In  particular, 
several drew the attention to the trend of people combining several jobs at the same time but 
the phenomena is still difficult to quantify (SMART, UBER and Faircrowdwork/IG Metall). 
SMART recalled that traditional self-employed had no need for social protection as they had 
patrimonial assets at their disposal. The situation is very different for the "new self-employed" 
with  have  production  tools  like  a  laptop  and  a  smartphone  but  not  a  high  income. 
Faircrowdwork/IG  Metall  stressed  that  there  are  2.2  million  self-employed  in  Germany 

138 

 
 
 
 
without  access  to  pension  which  will  most  probably  increase  old-age  poverty  in  the  future. 
FEANI focused on the particular situation of mobile workers in the EU and the difficulties to 
calculate a pension if a worker has worked in several European countries. There is a need for 
an overarching platform. According to FEANI, job polarisation is a major trend with the risk 
of the disappearance of the middle-class, the backbone of social protection systems.  

Regarding the organisation of social protection and the need for EU level action, views were 
divergent.  Some  participants  favoured  a  system  where  all  people  have  the  same  access  to 
social  protection  (SMART,  Faircrowdwork/IG  Metall),  without  the  possibility  to  opt-in  or 
opt-out and with the obligation for all to contribute to this system (Faircrowdwork/IG Metall). 
They have also favoured broadening the financing basis (SMART, Faircrowdwork/IG Metall, 
PGEU)  so  that  other  sources  of  income,  beyond  labour,  contribute.  They  also  favoured  the 
establishment  of  EU  mandatory  minimum  standards  (SMART)  or  EU  focus  on  some  social 
security branches like sick pay, maternity leave, unemployment benefit and pensions for the 
self-employed (FEANI). One participant underlined that self-employed should have the right 
to collective bargaining (Faircrowdwork/IG Metall). Another participant (UBER) underlined 
that everybody should have access to an affordable and reliable safety net. Benefits should be 
attached to workers and be made portable 

On  the  other  side,  some  participants  recalled  the  subsidiarity  and  proportionality  principles 
and  that  social  protection  of  the  self-employed  should  be  voluntary  (Direct  Selling  Europe, 
PGEU).  They  also  indicated  the  European  Semester  as  the  most  appropriate  instrument  to 
address the challenges at hand (UBER, Direct Selling Europe)  

· 

Hearing with civil society (15 December 2017) 

13  organisations  attended  the  hearing.  Participants  agreed  with  the  challenges  identified  by 
the  Commission  but  underlined  the  need  to  add  analysis  in  relation  to  some  groups:  the 
gender pension gap for women (European women's lobby), specific needs of disabled people 
(Disability  Forum)  and  of  migrants  (PECON).  Eurohealthnet  highlighted  that  some  self-
employed are not properly protected because they underestimate their risk or can simply not 
afford it.  

Some  recalled  that  the  same  challenges  had  been  identified  in  the1992  recommendation  on 
the  convergence  of  social  protection  objectives  and  policies  (CARITAS)  and  the  difference 
compared  to  the  past  is  that  whilst  in  the  past  the  challenge  related  to  combat  the  informal 
economy  and  tax  evasion,  today  there  are  legal  ways  of  circumventing  social  contributions 
(CARITAS,  EESC).  EAPN  questioned  the  coherence  of  Commission  messages  and  named 
the joint employment report and the general message to reduce social contributions in order to 
make work cheaper. 

Most  participants  advocated  for  universality  and  adequacy  of  social  protection  (CARITAS, 
European  network  for  independent living,  COFACE,  Eurodiaconia,  Social  platform,  EAPN, 
Eurocities, Eurochild ), the need to reduce conditionality criteria to reduce discrimination and 
unfair treatment (social platform), the need to reduce administrative barriers and complexity 
(Eurodiaconia,  PECON,  Disability  Forum)  to  foster  transparency  of  rights  (Eurohealthnet). 
Adequacy  should  be  defined  as  a  combination of  an  income  above  the poverty  line  and  the 
reference budgets (a basket of goods and service which covers basic needs) which takes into 
account the cost of living (EAPN, Eurodiaconia). Several argued for a rights-based approach 
(EAPN,  Eurodiaconia,  Social  Platform)  and  for  rights  that  are  tied  with  the  individuals 

139 

 
 
 
(Eurodiaconia).  Social  Platform  warned  that  social  security  is  not  a  commodity  and 
privatisation of social insurance will increase inequalities. Several participants referred to the 
need of addressing taxation to ensure the financing of social security, for example through a 
financial transaction tax (European women's lobby) or ensuring a buffer from general taxation 
(EESC). 

Regarding  EU  action,  several  participants  indicated  their  support  to  a  directive  ensuring 
minimum  standards  (Eurohealthnet,  EESC,  Social  Platform)  and  recalled  the  importance  of 
enforcement  (COFACE,  EESC).  The  European  women's  lobby  thinks  that  the  Commission 
should come up with a larger social protection strategy in order to complement the European 
employment  strategy.  Eurocities  called  on  the  mainstreaming  of  social  protection  issues  in 
European legislation - e.g. public procurement. 

· 

Hearing with self-governing bodies and private insurers (15 December 2017) 

Most participants agreed with the challenges at EU level identified by the Commission (ESIP, 
DSV, French Social Insurance, Austrian Social Insurance) but some underlined that there are 
no  problems  in  some  countries  (Germany  -  DSV)  and  others  referred  to  ongoing  national 
reforms  to  address  the  gaps  on  social  protection  (French  Social  Insurance)  or  regulate  the 
dependent  self-employed  (Austrian  Social  Insurance).The  Dutch  Pension  Fund  calculates  a 
huge pension gap in the future for self-employed in the Netherlands). Several have underlined 
the fact that people under-estimate the risk (Zurich Insurance, Belgium Invalidity Insurance) 
due  to  lack  of  awareness.  The  Belgium  Invalidity  Insurance  sees  a  risk  of  having  low  cost 
private schemes (through platform companies) versus more expensive public schemes and the 
need  to  break  barriers  between  private  and  professional  risks  for  self-employed  (distinction 
becoming  more  and  more  difficult).Private  insurers  draw  the  attention  to  the  fact  of  people 
underestimating risks due to low awareness. 

Some participants referred to their own ongoing research to map the situation across the EU 
for  all  branches  of  social  security  (ESIP)  and  on  the  income  protection  gap  (Zurich 
Insurance).  

In general self-governing bodies are in favour of a universal system integrating self-employed 
in  the  general  scheme  to  guarantee  transparency  and  transferability  (Belgian  pension  fund, 
French Social Insurance) since different schemes for professional sectors and at regional level 
lead to complexity. The Dutch Pension Fund sees the need to review the occupational pension 
system in order to cover all forms of employment. Together with Zurich Insurance, they find 
auto-enrolment with opt-out as an interesting avenue for self-employed. The Belgian Pension 
Fund highlighted that social protection can be complemented by private insurances. 

Some  self-governing  bodies  would  be  open  to  the  establishment  of  EU  minimum  standards 
(Belgian  pension  fund,  Austrian  social  insurance)  if  national  systems  are  duly  taken  into 
account.  Others  however  (ESIP,  DSV,  Dutch  Pension  Fund)  underlined  the  subsidiarity 
principle which would limit EU action to a better use of the European Semester, the OMC and 
an exchange of best practices. ESIP considers that some more reflection would be necessary 
regarding the abolishment of thresholds and ceilings and their impact on accrued rights. 

Some  noted  a  shift  from  contributions  to  taxation  in  terms  of  financing  sources  (Austrian 
Social Insurance, Belgian Pension Fund).The French Social Insurance defended that all kinds 
of revenue, including coming from a side-job, should contribute to social protection and that 
platforms should have the possibility to declare platform workers. 

140 

 
 
 
141 

 
 
 
 
 
ANNEX 12: WHO IS AFFECTED AND HOW? 

Key recommendation to Member States 

Public administration will have to ensure the following actions: 

- review their legal framework in order to ensure the inclusion of categories of non-standard workers 
actually not covered. 

- review their legal framework in order to ensure that time requirements and the duration of benefits 
are designed so to not disadvantaging people in non-standard employment and in self-employment. 

- review their legal framework in order to ensure the transferability of accumulated entitlements across 
different schemes.  

- review their legal framework in order to set up voluntary schemes for the self-employed in case they 
do not exist. 

- Set up programs that ensure accessible and transparent information on a generalized and personalised 
basis. 

I. Overview of Benefits (total for all provisions) – Preferred Option 

Description 

Amount 

Comments 

Direct benefits 

More  pronounced  reduction  in 
the  de-
inequality 
through 
segmentation  of 
labour 
market 

the 

More  pronounced  reduction  of 
number of self-employment and 
non-standard  workers  at  risk  of 
poverty,  when  the  social  risk 
materialises (will depend on the 
rate  of  opting-in), 
including 
after labour market transitions 

transferability  and 
Improved 
as  well 
as 
transparency 
reduction 
coverage 
in 
differences  strongly  facilitate 
labour  market  transitions  and 
thereby,  improve  matching  of 
people with jobs. 

improvement 
function 

of 
Some 
stabilisation 
of 
social  protection  upholding 
by 
aggregate 
demand 
providing 
counter-cyclical 
spending  during  economic 
downturns 

Not possible to quantify because it depends 
on companies hiring choices, on the way 
schemes are financed and on the take-up of 
voluntary schemes by the self-employed 

Not possible to quantify because it depends 
on the taking up of voluntary schemes by the 
self-employed 

Not possible to quantify because it depends 
on how many people are not aware of their 
rights and on the amount of schemes which 
do not allow to transfer, preserve and 
aggregate rights. 

Indirect benefits 

Not possible to quantify 

142 

 
 
 
 
 
 
 
Some  improvement  of  playing 
field  between  employment  and 
with 
contract 
corresponding 
on 
competition 
factor 
allocation 

effects 

forms 

and 

de-segmentation 

Partial 
of 
labour  market  by  incentivising 
the  wider  use  of  standard 
employment 

if 

Higher 
the 
taxable  basis 
adjustments  in  social  security 
contributions  steer  a  movement 
forms  of  employment 
from 
simplified 
which 
to  standard 
taxation  system 
employment  and  more  highly 
taxed employment contracts 

have 

a 

Possibly  some  reduction  of  the 
expenditure on last resort safety 
nets. 

discourage 
taking  on 

Partial removal of obstacles that 
employees 
may 
risks 
from 
the 
self-
associated 
employment,  improving  factor 
allocation 

with 

Not possible to quantify 

Not possible to quantify 

Not possible to quantify 

Not possible to quantify 

Not possible to quantify 

II. Overview of costs – Preferred option 

Citizens/Consumers  

Businesses 

Administrations 

One-off 

Recurrent 

One-off 

Recurrent 

One-off 

Recurrent 

None 

Possible 
increase of 
labour cost 

None 

Possible 
financial 
burden to 
introduce 
administrativ
e reforms.  

Formal 
coverage   

Direct costs 

None 

Limited  decrease 
disposable 
in 
income for a more 
sizeable 
group 
(previously 
uncovered and for 
whom the risks do 
not  materialise)  – 
through 
contributions, 
taxes  or 
lower 
wages  in  the  case 
of 
if 
NSE 
employers pass on 
the  cost  of  their 
contributions 
on 
(Depending 
the  financing  of 
social 
security 
schemes). 

143 

 
 
 
 
 
 
 
 
 
 
None 

None 

None 

None 

Indirect costs 

None 

higher 
some 
in 

Slightly 
risk 
of 
reduction 
employment 
through  possible 
adverse effects on 
labour 
demand 
and supply. 

Effective 
coverage 
and 
transfera
bility   

Transpar
ency 

None 

None 

None 

None 

Direct costs 

Indirect costs 

None 

Direct costs 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

Possible 
financial 
burden to 
introduce 
administrativ
e reforms.  

None 

Possible 
financial 
burden to 
introduce 
administrativ
e reforms. 

Indirect costs 

None 

None 

None 

None 

None 

None 

The SME Test – Summary of results 

(1) Preliminary assessment of businesses likely to be affected  

The  initiative  will  apply  to  all  employers.  It  will,  however,  particularly  affect  all 
employers of non-standard employees and, to less extent, companies working with self-
employed. 

The  data  used  are  from  the  ESDE  2015  and  allow  determining  to  which  extent  the 
companies  use  these  typologies  of  contracts.  The  self-employed  with  and  without 
employees  work  mainly  with  micro  enterprises  (1-9  employees),  and  much  less  with 
SMEs and large companies. On the other hand, non-standard employees are particularly 
used by the public administration (28%) and SMEs and to a less extent also by large and 
micro enterprises. 

(2) Consultation with SMEs representatives 

SME's representatives have been consulted through the two social partners' consultations 
and  also  through  dedicated  hearings.  The  results  of  these  consultations  have  been 
presented  in  Annex  10.  Moreover,  a  survey  has  been  carried  out  by  Open  Evidence 
interviewing a total of 612 employers across 10 Member States, the results of which are 
explained in point 3 below. 

(See 
Annexes11 
and 16) 

(3) Measurement of the impact on SMEs 

144 

 
 
 
 
 
It is firstly important to notice that only measures related to formal coverage can have an 
impact on employers since they can affect the administrative burden and the labour cost. 
The  policy  measures  concerning  effective  coverage,  transferability  and  transparency  do 
not affect companies. 

(See 
Annex 16) 

Secondly, the questions in the survey referred to a mandatory extension of coverage both 
for  non-standard  workers  and  for  the  self-employed.  Therefore,  the  results  presented 
below  can  be  considered  as  an  upper  bound  with  respect  to  the  effects  of  the  initiative, 
which requires mandatory coverage only for the non-standard workers.  

The survey asked what would be the impact of equalizing social security across all forms 
of employment on employers' administrative burden. To this question 21% answered that 
it  would  increase  to  a  large  extent  the  time  you  need  to  fulfil  the  bureaucratic 
requirement, 31% said that it would increase to some extent and the 48% answered that it 
would not make a big difference.  

Moreover,  when  they  were  asked  how  the  extension  of  coverage  would  influence  their 
hiring preferences, 9% replied that they would rely on less extent on the services of self-
employed  because  they  would  become  relatively  more  costly,  they  answered  that  they 
would still resort to temporary contracts (11%) and to the self-employed (22%) to retain 
flexibility and not incur in fixed costs, while 21% answered that they would increase open 
ended employment contracts if the cost of labour are equalised and the 49% answered that 
they would not change their hiring behaviours. 

4) Assess alternative options and mitigating measures 

No alternative options neither mitigating measures 

145 

 
 
 
 
 
 
ANNEX 14: MONITORING INDICATORS 

On  the  basis  of  the  monitoring  indicators  below,  specific  targets  could  be  agreed  with 
Member  States.  The  targets  would  express,  in  quantifiable  terms,  the  objectives  of  the 
Recommendation that would be to close the gaps identified in the mapping presented in the 
IA.  For  instance,  targets  could  be  specified  in  terms  of  formal  coverage  as  follows:  the 
number  of  groups  that  do  not  have  formal  coverage  in  a  given  branch  in  a  given  Member 
State should be zero within three years after the publication of the Recommendation, or the 
number of Member States where there are groups that lack coverage in a given branch should 
be  zero  within  the  same  period  (it  reached  nine  for  self-employed  regarding  unemployment 
insurance in 2017, for instance, see tables A.2 to A.5). As regards effective coverage, targets 
can be formulated on the basis of data on the number of countries where time thresholds are 
limiting  effective  coverage  for  non-standard  workers  and  the  self-employed  (table  A.6  and 
A.7). The same goes for transferability (table A.8). As regards transparency, the target could 
be: all MS should provide individualised information within three years after the publication 
of the recommendation (currently, almost half MS do not provide such information, see table 
A10).  

Table A.15: operational objectives and monitoring strategy 
Operational 
Specific objective 
objective 

Indicators* 

Formal coverage 

Decrease in share of non-
standard employees who 
have no formal coverage  

Decrease in share of self-
employed who have no 
formal coverage  

a) Categories of non-
standard employees who 
have no formal coverage, 
by social security branch, 
by country (allowing ex-
ante/ex-post evaluation, 
on the basis of the 
mapping present in 
Annex 6) 

b) Number of non-
standard employees in 
these categories 

a) Categories of self-
employed who have no 
formal coverage, by 
social security branch, by 
country (allowing ex-
ante/ex-post evaluation, 
on the basis of the 
mapping present in 
Annex 6 and a later 
update) 

Source 

a) MISSOC 

b) EU-LFS, where 
necessary complemented 
by national sources. 

a) MISSOC provides 
information on access to 
social security of self-
employed by branch.  

b) LFS can provide 
estimation on the number 
of self-employed in each 
country and per 

146 

 
 
 
 
 
 
 
 
 
 
 
occupations or economic 
sector. 

b) Number of self-
employed in these 
categories 

Effective coverage 

Ensure that rules 
governing contributions 
and entitlements do not 
restrain the possibility to 
accumulate and access 
adequate entitlements on 
the basis of type of 
employment relationship 
and employment statuses. 

Length of qualifying 
period, waiting period (if 
relevant) by employment 
status, by branch and by 
country 

Replacement 
rate;  and 
duration  of  benefits  by 
employment  status,  by 
branch and by country  

MISSOC provides 
information on qualifying 
period, working period, 
waiting period, 
calculation and duration 
of benefits and material 
scope by employment 
status and by branch 

the 

first 
Comparing 
mapping  presented 
in 
Annex  6  of  the  IA  to  a 
later  update  would  allow 
an 
ex-ante/ex-post 
evaluation.  

Social contributions as 
percentage of income, per 
employment status and 
per income level, 
comparing by 
employment status  

Number of Member 
States and social security 
branches where legal 
frameworks enable 
transferability of 
entitlements 

Number of Member 
States and social security 
branches where periods 
can be aggregated across 
schemes 

MISSOC provides 
information on applicable 
rates, allowing to check 
whether exemptions or 
lowered rates on the basis 
of income apply to all 
employment statuses 

EU-SILC+EUROMOD 

Not available in MISSOC 
on a regular basis 

Not available in MISSOC 
on a regular basis 

Ensure that the 
contributions to social 
security are proportionate 
to the contributory 
capacity of workers and 
self-employed (including 
ensuring progressivity) 
and ensure a level-playing 
field 

Enable transferability of 
entitlements 

Enable aggregation of 
periods across schemes 

Transparency 

Increase 
in  number  of 
Member States and social 
security  branches  where 
is 
generic 

information 

Number of Member 
States and social security 
branches where generic 
information is available 

Specific ad-hoc study, not 
available in MISSOC on 
a regular basis 

147 

 
 
 
 
 
 
 
 
 
 
 
available   

Increase 
in  number  of 
Member States and social 
security  branches  where 
personalised  information 
is available   

Outcome  indicator:  guarantee  a  decent  standard  of 
living 

(allowing ex-ante/ex-post 
evaluation, on the basis of 
the mapping present in 
Annex 6 and a later 
update) 

Number of Member 
States and social security 
branches where 
personalised information 
is available (allowing ex-
ante/ex-post evaluation, 
on the basis of the 
mapping present in 
Annex 6 and a later 
update) 

Poverty reduction effect 
of social benefits for self-
employed, atypical 
employees and standard 
employees, per country 
(allowing ex-ante/ex-post 
evaluation, on the basis of 
statistics presented in this 
IA) 

Specific ad-hoc study, not 
available in MISSOC on 
a regular basis 

EU-SILC 

*  The  above  table  provides  a  tentative  list  of  indicators.  The  feasibility  of  collecting  such 
indicators  will  be  further  analysed  (in  terms  of  data  availability,  sensitivity,  sample  size 
issues, etc.).  

148 

 
 
 
 
 
 
 
 
ANNEX 15: SUMMARY OF CASE STUDIES 

In the context of a changing world of work, many new forms of non-standard work developed 
in EU Member States. These new forms of work can have lower levels of protection through 
social security systems. However, some of the gaps can be compensated by derived rights at 
household level or by private insurances. The Commission decided to have a closer look at six 
forms of employment in six Member States: 

  Mini-jobs in Germany 
  Civil law contracts in Poland 
  Self-employed without employees in the Netherlands 
  Casual worker in Romania 
  Economically dependent self-employed in Spain 
  Project workers on continuous collaboration projects in Italy 

1. Mini-jobs in Germany 

Mini-jobs have become a key feature of the German labour market, as one fifth of dependent 
employed hold a mini-job. Among the 7.6 million mini-jobbers, 4.9 million have mini-jobs as 
a main job, the remaining ones as a second job. The by far most important form of mini-jobs 
(geringfügige Beschäftigung) is regulated through a maximum monthly net income from work 
(accumulation  of  contracts  is  possible  in  case  mini-jobs  are  the  only  income  source  from 
dependent  work)  up  to  the  defined  income  ceiling,  sine  2013  set  at  EUR  450  per  month  or 
EUR 5 400/year. In the long term, the share of persons with a mini-job as a second job on all 
mini-jobbers increased constantly. Mini-jobs, in particular if they are main jobs, are typically 
carried out in sectors like retail trade, repair services, accommodation and restaurant, health, 
social and household services as well as administrative support. Nearly half of mini-jobbers 
worked  in  unskilled  or  semi-skilled  activities  as  compared  of  a  fifth  among  standard 
dependent employed. 

For  mini-jobs  social  security  contributions  level  differ  depending  on  the  activity:  they  are 
lower for employers in the private household sector than for those in the commercial sector. 
The  sum  of  employer  and  employee  contributions  for  mini-jobs  is  lower  than  for  standard 
dependent employed.  Employees  have  the  option  to  opt  out  of  paying  their  contributions to 
the  pension  system.  Contributions  to  the  health  care  system  are  solidarity  payments  that 
increase the budget of the statutory health insurance without creating health coverage for the 
employed mini-jobber. In addition, there are small contributions to the insolvency insurance, 
accidence insurance and a sickness/maternity risk lump sum. No contributions are made to the 
unemployment insurance and the statutory old-age care insurance schemes. The employer of 
mini-jobbers  transfers  in  general  2%  of  income  taxes  based  on  the  gross  wage.  This  means 
that  this  part  of  earned  income  is  not  taxed  according  to  individual  tax  rate  based  on  the 
totality  of  income  and  will  consequently  not  be  added  up  to  other  income  in  the  individual 
income  tax  declaration.  This  represents  saved  taxes  for  most  mini-jobbers,  in  particular  if 
their income from the main job or of the spouse is high.  

Specific  rules  regarding  access  to  employment  (early  retirees),  opt-out  rules  for  pension 
contributions and the prevalence of derived social protection rights, as well as the income tax 
system  in  general  and  the  taxation  system  for  married  couples  in  particular,  set  different 
incentives for working as a mini-jobber. For employers the registration of mini-jobs follows 
eased  administrative  procedures.  The  composition  of  mini-jobber  reflects  the  different 
incentives.  

149 

 
 
 
More than one third of mini-jobber have acquired rights from the social security system from 
their  main  dependent  employment.  In  2014,  more  than  a  sixth  of  mini-jobbers  were  retired 
and 19%  were in  education and had usually derived rights to  the health care system. About 
11% were unemployed and most of them will also have derived rights to health care. A fourth 
of  mini-jobbers  were  housewives.  The  vast  majority  of  them  have  derived  rights  to  the 
statutory health care system and to the pensions of their spouses. Overall, only a fifth of mini-
jobbers acquire own pension rights, as the others make use of the opt-out regulation. About 
4% of mini-jobber in the commercial sector are not covered by the statutory health insurance 
through derived rights and will need to get private health insurance. These will have a strong 
incentive to get a job subject to social security payments. One group more often affected by a 
social  security  gap  is  for  example  divorced  women.  They  have  no  derived  rights  to  access 
health insurance. The risk of getting welfare net transfer at older ages is higher for divorced 
people,  as  a  third  of  them  would  claim  it,  while  widows  have  in  general  not  a  higher 
probability of getting this minimum income benefit. A fifth of widows getting the minimum 
income have neither own nor derived pension rights. The main underlying reason for getting 
low pensions and being at risk of old age poverty is linked to broken working biographies and 
a low number of hours worked, in particular among singles. 

Other gaps may result from the fact that mini-jobbers are often not well informed about their 
rights, e.g. to paid holidays  or  rest time, accident  or  sick  pay.  Estimations of costs of  mini-
jobs in terms of lost income to the pension and health insurance scheme range between EUR 
1.1  and  1.6  bn  per  year.  Net  fiscal  costs  (including  social  security  contributions,  taxes  and 
transfers)  vary  between  0.6  billion  and  0.8  billion  according  to  a  study  of  IZA  but  may  be 
significantly  higher  according  to  others,  depending  on  assumptions  made  about  the  supply 
and demand effects as well as the income distribution. It has been argued that on cases mini-
jobs  have  led  to  net  employment  creation  the  tax  and  contributions  to  the  social  security 
system  losses  are  justified.  However,  also  the  costs  of  the  net  employment  creation  would 
need  to  be  taken  into  consideration.  Overall,  deadweight  effects  as  well  as  substitutions 
effects are likely to be large. Furthermore, major uncertainties remain about the assessment of 
labour supply and labour demand effects of mini-jobs. One important potential effect of the 
mini-job  regulation  is  the  limitation  of  the  number  of  hours  worked.  Effects  of  a  restricted 
labour supply in times of labour shortages, and thus foregone growth potentials would need to 
be taken into account.    

Regulations  on  mini-jobs  have  existed  for  many  decades.  In  the  1960s  and  1970s  the  main 
objective was to enhance labour supply mainly of those who were participating in the labour 
market  and  to  expand  the  number  of  hours  of  those  in  employment  in  order  to  overcome 
labour  shortages.  Mini-jobs  regulations  were  reformed  in  2003  in  the  context  of  the  major 
labour market reforms, the so-called “Hartz reforms”. Mainly, the objectives have changed in 
the  context  of  high  unemployment.  Current  reform  discussions  are  marked  by  a  changed 
labour market context of labour shortages. The discussion about mini-jobs is also influenced 
by major societal trends such as increased female employment, improved child-care facilities, 
more single parents, divorces etc. These trends put a question mark on the initial intention of 
mini-jobs.  

2. Civil law contracts in Poland 

The civil law contracts are a special category of atypical contracts used to contract labour in 
Poland.  There  are  two  main  types  of  civil  law  contracts:  the  contract  to  perform  specified 
work  (umowa  o  dzieło)  and  the  contract  of  mandate  (umowa  zlecenie).  The  latter  is  more 

150 

 
 
popular  than  the  former.  The  number  of  workers  with  civil  law  contracts  in  Poland  has 
increased substantially since the early 2000s. The incidence of other forms of temporary work 
–  fixed-term  employment  contracts,  temporary  agency  work  –  has  also  risen,  but  civil  law 
contracts imply an especially acute form of labour market segmentation because they’re much 
less  regulated  than  other  temporary  contracts.  This  applies  both  to  protection  against 
dismissals and worker rights such as paid leave or the right to join trade unions, and to social 
security coverage.  

Due  to  lack  of  data  on  civil  law  contracts,  it  is  difficult  to  assess  precisely  the  number  of 
people  working  under  civil  law  contracts.  According  to  the  LFS  data,  in  2016  there  were 
510,000 people working under civil law contracts (in their main job) which is equivalent to 
3.1%  of  total  employment  in  Poland.  Among  them,  429,000  people  worked  solely  under  a 
contract of mandate, 36,000 people worked solely under a contract to perform specified work, 
22,000  people  worked  under  another  type  of  a  civil  law  contract  (such  as  a  managerial 
contract),  and  22,000  combined  various  types  of  civil  law  contracts.  Data  from  personal 
income  tax  records  published  by  the  Ministry  of  Finance  show  that  in  the  last  few  years 
approx. 1 million people has been earning income only on the basis of civil law contracts. The 
tax records also show that the number of such people has doubled since the early 2000s.  

Individuals  working  under  civil  law  contracts  tend  to  be  less  educated  than  individuals 
working  under  employment  contracts.  The  incidence  of  civil  law  contracts  is  the  highest 
among  young  workers  but  it  is  also  noticeable  among  workers  aged  over  50.  Women 
constitute majority of workers under civil law contracts, but once the effect of education, age 
and occupation is taken into account, women are not more likely than men to work under civil 
law  contracts.  The  highest  incidence  of  civil  law  employment  is  found  among  low  skilled 
occupations:  elementary  occupations,  and  services  and  sales  workers.  The  sectors  which 
record the highest incidence of civil law contracts are accommodation and food services, and 
business  support  services  which  include  temporary  work  agencies.  The  prevalence  of  these 
contracts is the highest among small firms (with less than nine workers). Besides employment 
in  call  centres,  the  expansion  of  civil  law  employment  cannot  be  associated  with  the 
expansion  of  digital  economy.  Workers  under  contract  of  mandate  earn  less  than  workers 
under employment contract. It is due to lower hourly wage and larger incidence of part time 
employment. The median hourly wage of individuals working under contract of mandate is by 
25% lower than the median hourly wage of individuals on employment contract.  

Individuals  working  under  contract  of  mandate  can  be  either  exempted  from  social  security 
and public health insurance contributions in some circumstances (if they are students aged up 
to 26 years), or can pay lower contributions than they would pay if they earned the same net 
income  under  an  employment  contract.  Individuals  working  under  contract  to  perform 
specified work are exempted from all social security and public health insurance contributions 
–  this  group  might  not  be  covered  at  all.  However,  more  than  half  of  them  have  probably 
access thanks to other means, mainly because of an employed spouse. After a raft of changes 
which have been introduced since 2015 to improve access of workers with civil law contracts 
to  unemployment  benefits  and  maternity  benefits.  The  social  security  contributions  which 
pertain to civil law contracts have also been increased, although they are not yet identical to 
contributions pertaining to employment contracts. The key challenge related to social security 
coverage  is  in  expected  low  retirement  pensions.  In  the  Polish  defined-contribution  system, 
low contributions of workers with civil contracts will translate into low pensions even if these 
workers spend only a share of their careers working under civil law contracts. Estimates show 
that the pension gap will be about 17%. The recent changes in contribution rules have closed 

151 

 
 
it only to some extent. Many of these workers will be receive minimum pensions which will 
have  to  be  subsidised  from  general taxation.  Lower  contributions  paid  by  civil  law  contract 
workers aggravate the deficit in the pension system. On the other hand, individuals working 
under civil law contracts contribute more in the sickness and accident insurance contributions 
than they receive in sickness, carer and rehabilitation benefits, and maternity allowances. In 
aggregate terms, they cross-subsidise other groups, in particular the self-employed. 

3. Self-employed without employees in the Netherlands 

Coverage and barriers for SEWE 

As  stated,  all  Dutch  citizens  residing  in  the  Netherlands  between  the  ages  of  15  and  the 
official retirement age are entitled to the state pension. However, most self-employed workers 
are not covered by the second pillar, and participation in the third pillar is voluntary. Hence, 
the pension coverage for self-employed workers depends on the person.  

A recent study conducted every two years shows the pension arrangements made by SEWE, 
as shown in the figure below (Lautenbach et al., 2017). The two most frequently used forms 
of pension arrangements are firstly savings and investments, and secondly home ownership. 
More formal arrangements such as pension funds and fiscal old-age reserves or annuities are 
slightly  less  frequently  used,  but  are  still  quite  common.  Around  a  quarter  of  SEWE  have 
made no pension arrangements at all. Their main reason for this (in their own words) is that 
they cannot afford to make pension arrangements (as shown in Figure A.22). 

Figure A.21: Pension arrangements made by SEWE (multiple answers possible)  

Source: Lautenbach et al., 2017 

Figure A.22: Reasons for SEWE not making any pension arrangements 

152 

 
 
 
 
 
 
Source: Lautenbach et al., 2017 

Pension  funds  are  free  to  choose  whether  or  not  they  allow  salaried  workers  who  are 
transitioning into SEWE to continue their pension scheme, and they can formulate their own 
conditions  and  requirements.  A  recent  study  (Bureau  Bartels,  2016)  commissioned  by  the 
Dutch  Ministry  of  Social  Affairs  and  Employment  shows  that  85  percent  of  pension  funds 
provide the possibility of voluntary continuation of the pension scheme for the self-employed. 
However, very little use is made of this by self-employed workers (only approximately 650 
persons nationally). This limited usage does not appear to depend on the specific requirements 
or  conditions  set  by  the  individual  pension  funds.  More  important  obstacles  are  firstly,  the 
legal requirement that the pension has to be continued immediately after the end of the prior 
period in employment, and secondly, the required level of the pension contributions.290 Also, 
this  instrument  can  only  provide  a  solution  for  workers  transitioning  from  an  employment 
contract  to  self-employment.  Therefore,  the  State  Secretary  of  Social  Affairs  concludes  that 
this  instrument  is  not  effective  in  promoting  pension  accumulation  among  the  self-
employed291. 

The  problem  of  SEWE  not  making  pension  arrangements  has  been  identified  by  the  Dutch 
government  in  2016,  which  has  been  reviewing  possible  ways  to  increase  the  pension 
coverage for SEWE, for instance by introducing incentives292. However, the recently formed 
government has not mentioned this in their coalition agreement293. 

4. Casual workers in Romania 

Casual work in the form of contractual day-labour has been legally endorsed in Romania by 
the  Law  52/2011,  which  followed  shortly  the  revised  labour  code  (Law  40/2011)  that 
significantly deregulated the labour market and limited trade unionism. In its initial version, 
the law represented a sharp departure from the principles of social insurance and historically 
established  labour  rights  such  as  the  right  to  a  minimum  national  gross  wage  or  collective 
labour  contracts.  While  the  subsequent  revisions  of  the  law,  especially  in  2014  and  2015, 
introduced some more responsibilities for the beneficiaries of day labour, the exemption from 
the payment of social insurance contributions (pensions, health care, unemployment, and paid 
sick and maternity leaves) had been maintained, and insurance remained voluntary and fully 
covered by the day-labourers.  

290 The pension premium for self-employed workers who opt for voluntary continuation of their pension scheme is equal to the sum of the 
employee’s contribution and the employer’s contribution.  
291 Kamerbrief Klijnsma 11 juli 2016 ‘Vrijwillige voortzetting pensioenfonds voor zzp’ers’. 
292 Kamerbrief Klijnsma 11 juli 2016 ‘Vrijwillige voortzetting pensioenfonds voor zzp’ers’. 
293 Regeerakkoord ‘Vertrouwen in de toekomst 2017 – 2021’ 

153 

 
 
 
 
 
                                                            
The  rationale  to  grant  the  legal  possibility  of  using  day-labour  consisted  of  tackling 
undeclared  work,  especially  in  the  large  agricultural  sector  that  extensively  employed 
seasonal workers. The new law granted the possibility of employment on a daily basis, with 
the  minimum  obligation  to  pay  the  flat-rate  income  tax  (16%)  and  to  provide  for  the 
hospitalization/funeral costs in case of workplace accidents. Minors aged 15 can work as day-
labourers only with the written approval of their parents. A maximum of 90 days/year can be 
worked as day-labour for the same beneficiary, with the exception of agriculture, where the 
threshold  was  extended  to  100  days/year.  The  domains  where  day-labour  can  be  performed 
were  set  by  the  law  and  the  nature  of  work  restricted  to  unqualified  labour.  The  leasing  of 
day-labourers for a third party was prohibited. Economic agents that utilize day-labour should 
submit monthly a register to the Labour Inspection, signed by each labourer.   

As compared to 2011, when ca. 170.5 thousand day-labourers were registered, by 2016 their 
number increased 4.7 times, reaching 803.6 thousand persons. Their share in the total labour 
force expanded from 1.2% in 2011 to 6.7% in 2016. The number of legal entities using day-
labour also increased from 4.8 thousands in 2011 to 24.1 thousands in 2015. According to the 
statistics of the Labour Inspection, 80% of day-labour is performed in agriculture (including 
vineries, orchards and animal husbandry), forestry and fisheries. This sector typically employs 
persons  with  lower  levels  of  education,  who  at  times  combine  seasonal  work  abroad  with 
casual  work  in  Romania.  A  smaller  share  of  day-labour  was  registered  in  the  case  of 
organizing events or leisure activities, more frequent in urban areas and typically employing 
students. 

Given that “day-labourer” does not constitute a statistical category for occupied persons in the 
reports of the National Institute for Statistics, there is a lack of publicly available information 
and reliable micro-data that could allow the demographic profiling of day-labourers, as well 
as  estimations  regarding  their  uptake  of  various  social  protection  benefits  and  services. 
However, given the unqualified nature of work, prevalence in the agricultural sector, and low 
incomes,  most  probably  they  can  hardly  afford  paying  voluntarily  all  social  insurance 
contributions.   

For  2017,  the  estimated  loss  of  the  public  social  insurance  systems  due  to  the  replacing  of 
regular employment contracts at the minimum wage with day-labour is around 1,824 million 
Ron.  

Since  2015  it  has  become  legally  possible  to  cumulate  income  from  day-labour  with  social 
assistance  benefits  granted  under  the  law  on  the  Guaranteed  Minimum  Income  (Law 
416/2001, GMI), and, as a collateral provision under GMI, to benefit from public health care 
insurance  covered  from  the  national  budget.  Consequently,  in  the  particular  case  of  day-
labourers  who  lack  imputable  assets  that  would  disqualify  them  from  GMI,  and  who  are 
willing to perform the required community work, there is a cross-subsidizing of labour. The 
main  beneficiaries  of  this  cross-subsidizing  are  the  economic  agents  from  the  agricultural 
sector, as they employ the largest share of day-labour. 

5. Economically dependent self-employed in Spain 

In  Spain,  the  figure  of  economically  dependent  self-employment  (trabajador  autónomo 
económicamente dependiente, TRADE) was regulated in 2007 in the Self-employed Workers’ 
Statute  (Ley  del  Estatuto  del  Trabajador  Autónomo,  LETA).  The  most  important  criterion 
used to establish whether a worker belongs thereto is of an economic nature, measured as the 

154 

 
 
 
percentage of income earned from a single client. A self-employed worker is considered to be 
economically dependent if the income from a single client accounts for at least 75% of his/her 
total income (Article 11, paragraph 1 of the Self-employed Workers’ Statute). Self-Employed 
Workers’ Statute conferred TRADE status higher social protection compared to genuine self-
employment. 

In  2017  (2nd  quarter),  there  were  10,530  TRADEs  registered.  The  number  of  registered 
TRADE increased significantly in the first years after the LETA was passed. However, after 
the initial increase, since 2015, the number of TRADE registered has barely increased and it 
accounts for a very low proportion of total self-employed without employees (0.7%). Overall, 
social partners, self-employed organisations and experts find that the existing legal regulation 
of TRADE has failed to attract self-employed because it does not respond to the needs of this 
specific collective nor to the needs of employers.  

Difficulties for TRADE of acquiring their own social protection rights 

Social  protection  rights  of  TRADE  are  almost  identical  to  those  of  normal  self-employed. 
Regarding  in-kind  benefits  associated  to  healthcare,  self-employed,  included  TRADEs,  are 
entitled to the same rights as employees. As far as cash benefits are concerned, TRADEs are 
obliged  to  contribute  to  insurance  for  most  of  the  contingencies  that  apply  to  employees 
(pensions,  labour  accidents,  etc.).  The  most  important  in-cash  benefits  from  which  TRADE 
are  excluded  are  unemployment  benefits  and  Wage  Insolvency  Fund  (Fondo  de  Garantía 
Salarial, FOGASA).  

The  amount  of  all  cash  benefits  that  TRADEs  are  entitled  to  are  determined  by  the 
contribution base and the monthly contribution. As opposed to employees, self-employed and 
TRADE can choose the contributions they want to pay to the Social Security. Most of them 
(81% of self-employed and 91% of TRADE in 2017) are selecting the minimum base in order 
to pay lower contributions. As social protection is closely linked to the contribution bases, this 
leads  to  lower  levels  of  protection  and,  especially,  lower  pensions  (see  below),  with  an 
increased risk of poverty and social exclusion. 

Possibilities of gaining access through derived social protection rights 

In  Spain,  the  social  protection  system  does  not  contain  many  elements  which  connect  the 
social protection of an individual to his or her specific family situation. Main social security 
derived  rights  fall  under  the  juridical  category  of  ‘in-cash  benefits  for  dead  and  survival’ 
(prestaciones  por  muerte  y  supervivencia).  Self-employed  and  TRADE  are  entitled  to  the 
same  rights  as  employees,  as  far  as  they  contribute  to  the  insurance  against  temporary 
incapacity which is mandatory for all self-employed workers. 

Coverage and access by other means 

Some  private  funds  such  as  health  funds  have  been  incentivised  for  self-employed  through 
discounts in their direct income taxes. Regarding pensions and dead insurances, some studies 
(UNESPA, 2016) find that the share of self-employed having private insurances is very close 
to the share of employees having one. 

Cost-benefit of cross-subsiding TRADE 

Measures favouring transition from unemployment to TRADE are cost-effective as they could 
contribute to save social expenditure related to unemployment benefits. However, a political 
strategy favouring these transitions should also consider that there is the facto a considerable 

155 

 
 
gap  in  terms  social  rights  (no  unemployment  benefits  and  lower  retirement  pensions)  and  a 
considerable gap in terms of employment rights. 

6. Project workers on continuous collaboration projects in Italy 

Project-based  continuous  collaboration  contract  (Contratto  di  collaborazione  a  progetto,  or 
Co.co.pro.)  is  a  non-standard form  of  employment  contract  established  in  Italy  in  2003  that 
gradually replaced the earlier coordinated and continuous collaboration contract (Contratto di 
collaborazione coordinata e continuativa, or Co.co.co). In 2015 the former was abolished to 
be replaced through the reintroduction of its predecessor.  

in 

included 

the  broader  class 
Both  kinds  of  contractual  arrangements  can  be 
of “parasubordinate” forms  of  employment,  whereby  workers  find  their  condition  to  be 
somewhat  in  between  that  of  an  employee  and  that  of  self-employed  collaborator.  These 
arrangements came to fulfil specific employer requirements that could not be met by previous 
forms of subordinate work. However, the widespread use of these contracts has often simply 
masked  standard  employment  relationships  while  allowing  the  employer  to  benefit  from 
lower  gross  costs,  both  in  terms  of  the  explicit  costs  of  contribution  rates  and  the  implicit 
costs  of  dismissals.  Such  economic  incentives  have  mostly  been  eliminated  by  various 
reforms of the Italian labour market. Such reforms have gradually increased the contribution 
rates  by  aligning  these  to  the  levels  of  standard  employment  contracts  and  by  reducing  the 
limits to the use of fixed term employment contracts. As a result, in recent years the number 
of  Co.co.pro.  workers,  i.e.  project-based  continuous  collaboration  contract  workers,  has 
remarkably decreased, from 692,078 in 2011 to 379,299 in 2015. At the same time, from the 
point of view of access to the welfare system, such reforms have progressively been aligning 
the  conditions  of  these  workers  to  those  employed  with  standard  contracts,  thus  providing 
them  with  equivalent  pension  schemes  and  a  similar  level of  access  to  healthcare, sickness, 
family  benefits  and  occupational  injury  benefits.  From  this  perspective,  the  key  remaining 
statutory  difference  concerns  unemployment  benefits,  which  are  less  generous  and  have  a 
shorter duration. 

However, de facto gaps in access to the welfare system still persist, due to the different labour 
market outcomes of these workers, whose conditions are often characterized by lower wages, 
fewer yearly working hours and a higher risk of unemployment, and also to the higher weight 
of the weaker segments of the Italian labour supply, i.e. women and the young. 

Thus,  policies  aimed  at  reducing  such  gaps  would  benefit  from  those  instruments  typically 
addressed  at  low-income  workers.  In  this  sense,  it  is  worth  to  observe  that  Italy  lacks  a 
comprehensive policy on social exclusion and income support. 

Moreover,  since  the  Italian  pension  system  follows  an  NDC  approach,  lower  contribution 
rates  involve  a  higher  risk  of  poverty  at  the  moment  of  retirement  and  require  some 
adjustment of the guaranteed minimum pension scheme. 

156 

 
 
 
 
 
ANNEX 16: BEHAVIOURAL STUDY 

Behavioural  economics  and  more  generally  behavioural  sciences  study  heuristics  (mental 
shortcuts)  and  biases  and  provide  a  more  realistic  picture  of  our  attitudes,  decision  making 
processes,  choices  and  behaviour  than  the  one  proposed  in  the  utility  maximising  view  of 
human  nature  proposed  by  neo-classical  economics  and  rational  choice  theory.  There  are  a 
number of heuristics and biases, empirically documented in other field indirectly relevant to 
the object of this study. The conventional decision theory, assuming that agents are perfectly 
rational  with  not  cognitive  issues  and  stable  preferences,  fails  to  explain  many  critical 
decisions related to social protection, such under-optimal saving for pension or misperception 
of the likelihood of events such as losing one’s job or the need to use health services. 

The  analysis  below  summarises  the  results  of  the  survey  carried  on  by  Open  Evidence  on 
8000  individuals  in  10  Member  States  (Germany,  France,  Italy,  the  Netherlands,  Poland, 
Portugal, Romania, Slovakia, Spain and Sweden). It is important to note that the survey is not 
representative of the population, as explained in Annex 9. 

Equal and Adequate Protection 

sickness, 

  Social protection considered inadequate. Overall in the sample social protection in 
terms of the six  types  of benefits considered in this survey (unemployment, old-age, 
maternity/paternity, 
is 
considered  inadequate  by  60%  of  respondents.  Such  appraisal  differs  markedly  by 
employment  status,  for  instance:  taking  the  self-employed  and  those  employed  full-
time  on  an  open  ended  contract  the  appraisals  are  specular:  73%  of  the  former 
consider is not adequate at all (25%) or not very adequate (48%); whereas for the latter 
this percentage goes down to 42% with as much as 58% considering it very adequate 
(7%) or fairly adequate (51%); 

accidents/occupational  diseases) 

invalidity, 

  For none of the six types of benefits coverage reach 50% of the sample. Moreover, 
coverage differs widely by forms of employment, for instance: 72% in open ended full 
time employment have access to unemployment benefits but only 22% among the self-
employed and 43% among the part-time employed with temporary contract; 

  Unemployed with very little coverage. The unemployed show low level of coverage 
for the five type of benefits other than unemployment one. For instance, coverage for 
old-age  ranges  from  only  10%  to  23%  depending  on  the  forms  of  employment  in 
which they worked before becoming unemployed; 

Transferability 

  Transfer  rights  perceived  as  complex.  As  many  as  68%  of  respondents  who  are 
employee think that transferring social rights to become self-employed would difficult 
and another 13% lack information about this aspect; 

System transparency 

  Unawareness about coverage. Between 13% and 17% of the all sample do not know 
whether or not they have access to the six type of benefits considered in this survey. 
Lack of awareness is higher for individuals in less consolidated forms of employment, 
which suggest the systems result less transparent to those individuals who would need 
information the most; 

157 

 
 
  Difficulty to apply for benefits. Between 50% and 65% of respondents, depending on 

the kind of benefits, consider applying for them to be difficult or very difficult; 

  The  relation  between  transparency  and  the  other  two  dimension.  Various  other 
indirect  measures  seem  to  confirm  that  social  protection  systems  are  not  very 
transparent.  This  may  also  explain  why,  despite  considering  social  protection  not 
adequate, respondents do not  perceive personal accounts and transferability of rights 
as  important  as  they  might.  Lack  of  information  and  transparency  function  as  a 
mediator creating doubts and uncertainty about changing employment status. 

Willingness to pay for, and ranking of, benefits 

  Willingness to pay for voluntary schemes. Willingness to pay for voluntary schemes 
is not very high (unless the contribution does not exceeds 5% of annual gross income) 
for all six types of benefits; 

  Ranking the importance of different benefits. Unemployment and old-age benefits 
stand  out  as  the  most  important,  whereas  maternity/paternity  benefits  are  by  far  the 
least  important,  despite  the  fact  that  in  our  sample  there  a  sizeable  proportion  of 
respondents  with  children.  This  result  may  be  interpreted  as  one  of  the  sign  of  the 
current crisis that pushes individuals to be concerned about the most basic needs and 
to forget less pressing but symbolically important welfare entitlements; one could see 
in such findings further confirmation that the Great Recession is bringing back Europe 
from  the  post-materialist  orientation  consolidated  in  the  1990s  to  a  more  materialist 
outlook; 

16.1 Is social protection adequate? 

When asked respondents whether they consider that in general the social protection they have 
access  to  provides  adequate  support  for  various  situations  (i.e.  becoming  unemployed, 
covering old age pension, maternity/paternity leave, sickness leave, disability leave – Figure 
A.23), 60% of them find it not very adequate (44%) or not at all adequate (16%).  

Figure A.23. Social protection adequate support 

Not at all 
adequate; 16% 

Not very 
adequate; 44% 

Very adequate; 
4% 

Fairly adequate; 
36% 

n=8000 

158 

 
 
 
 
 
Differences in perception can be spotted across employment statuses (Figure A.24). Taking, 
for instance, the self-employed and those employed full-time on an open ended contract the 
appraisals are specular: 73% of the former consider is not adequate at all (25%) or not very 
adequate  (48%);  whereas  for  the  latter  this  percentage  goes  down  to  42%  with  as  much  as 
58% considering it very adequate (7%) or fairly adequate (51%). 

Figure A.24. Social protection adequate support by employment status 

Very adequate

Fairly adequate

Not very adequate

Not at all adequate

Self-employed

2% 

25% 

48% 

25% 

Entrepreneur

5% 

33% 

Part-time, temporary

3% 

32% 

Full-time, temporary

4% 

38% 

Part-time, open-ended

5% 

40% 

44% 

48% 

49% 

43% 

18% 

17% 

9% 

12% 

Full-time, open-ended

7% 

51% 

35% 

7% 

Unemployed

3% 

30% 

48% 

19% 

0%

20%

40%

60%

80%

100%

n=8000 (p<0.001) 

Another  interesting  fact  is  the  perception  individuals  have  about  their  entitlements  (Figure 
A.25). First, for all the social security branches considered, less than 50% of the respondents 
report  being  covered.  Second,  coverage  seems  relatively  higher  for  sickness  and 
unemployment benefits compared to the other benefits, and particularly low appears coverage 
for maternity/paternity benefits where as many as 61% report not being covered; also high are 
the percentages of those saying they are not covered for old-age (52%) and invalidity (49%). 

159 

 
 
 
 
Figure A.25. In case of need, would you be entitled through your main job to…  

Yes

No

Don't know

Accidents/occupational disease benefits

Invalidity benefits

38% 

34% 

45% 

49% 

Sickness benefits

47% 

40% 

Maternity/Paternity benefits

Old-age benefits

28% 

30% 

61% 

52% 

Unemployment benefits

49% 

38% 

17% 

17% 

12% 

11% 

17% 

13% 

n=8000 (Unemployment benefits n=6000) 

When  breaking  down  by  employment  status,  differences  in  perception  of  coverage  are 
particularly evident in case of unemployment benefits (with 22% of self-employed declaring 
to  be  covered,  against  the  72%  of  the  standard  employees),  sickness  benefits  (36%  of 
coverage in case of the self-employed and 71% in case of standard employees), accidents at 
work  (30% for  the  self-employed  against  71%  covered  among  the  standard  employees)  and 
invalidity benefits (31% against 51%). 

160 

 
 
 
 
Figure A.26: Self-declared coverage by benefits and employment status 

Unemployment benefits 

Old-age benefits 

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended

22% 

60% 

35% 
43% 

55% 
53% 

72% 

51% 
42% 

31% 
33% 

18% 
14% 
16% 
14% 
14% 
7% 

21% 

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended
Don't work, looking for a job
Unemployed

37% 
36% 

20% 
24% 
29% 

44% 
46% 

64% 
60% 
54% 

42% 

45% 

18% 
16% 

62% 
63% 

20% 
17% 
16% 
16% 
17% 
14% 
20% 
20% 

Yes

No

Don't know

Yes

No

Don't know

Maternity /paternity benefits 

Sickness benefits 

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended
Don't work, looking for a job
Unemployed

26% 

33% 

22% 

32% 
29% 

60% 

56% 

66% 

54% 
60% 

43% 

49% 

12% 
13% 

75% 
74% 

14% 
11% 
12% 
14% 
10% 
7% 
13% 
13% 

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended
Don't work, looking for a job
Unemployed

36% 

49% 

38% 

56% 
55% 

71% 

50% 

39% 

49% 

29% 
35% 

15% 
12% 
13% 
15% 
10% 
8% 
17% 
16% 

21% 

27% 
27% 

56% 
57% 

Yes

No

Don't know

Yes

No

Don't know

Invalidity benefits 

Accidents/occupational disease benefits 

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended
Don't work, looking for a job
Unemployed

31% 
35% 

26% 
33% 
35% 

48% 
47% 

55% 
46% 
47% 

51% 

36% 

18% 
24% 

64% 
60% 

21% 
18% 
19% 
20% 
19% 
13% 
18% 
17% 

Self-employed
Entrepreneur
Part-time, temporary
Full-time, temporary
Part-time, open-ended
Full-time, open-ended
Don't work, looking for a job
Unemployed

30% 

43% 

30% 

48% 
41% 

51% 

39% 

48% 

31% 
41% 

62% 

26% 

18% 
16% 

62% 
67% 

19% 
18% 
21% 
21% 
18% 
12% 
20% 
17% 

Yes

No

Don't know

Yes

No

Don't know

When  coming  to  transferability  issues,  both  self-employed  and  employees  consider  as 
difficult to transfer the acquired rights in case of changing employment status. Indeed, 68% of 
respondents  who  are  employees  consider  that  transferring  their  social  rights  if  they  become 
self-employed would not be easy (28% not easy at all and 40% not very easy – figure A.27).  

161 

 
 
 
 
 
 
 
Figure  A.27.  Ease  of  transfer  social  rights  from  dependent  employment  to  self-
employment 

I do not know

Not all easy

Not very easy

Fairly easy

Very easy

3% 

13% 

16% 

28% 

40% 

n=4048 

Figure  A.286  Ease  of  transfer  social  rights  from  self-employment  to  dependent 
employment 

45% 

32% 

17% 

50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%

6% 

Very easy

Fairly easy

Not very easy

Not at all easy

n=1454 
Transparency  is  also  an  issue.  Lack  of  awareness  due  to  unclear  or  difficult  to  access 
information  is  not  excessively  high  but  still  sizeable  and  seems  to  be  higher  for  old-age, 
invalidity, and accidents/occupational benefits (figure A.29).  

Figure A.29. In case of need, would you be entitled through your main job to… 

Don't know

Accidents/occupational disease benefits
Invalidity benefits
Sickness benefits
Maternity/Paternity benefits
Old-age benefits
Unemployment benefits

17% 
17% 

17% 

12% 

11% 

13% 

162 

 
 
 
 
 
 
 
 
Difficulties are also expressed concerning the procedures to apply for a certain benefits. Only 
applying for maternity/paternity294, unemployed benefits, and sickness benefits is considered 
very easy or fairly easy by about 50% of respondents (figure A.30). 

Figure A.30. How easy do you think it would be to make an application for the following 
issues?  

Very easy

Fairly easy

Not very easy

Difficult

Very difficult

Accidents/occupational disease benefits

6% 

25% 

36% 

19% 

14% 

Invalidity benefits

5% 

21% 

35% 

21% 

18% 

Sickness benefits

11% 

39% 

30% 

12% 

8% 

Maternity/Paternity benefits

11% 

42% 

26% 

9% 

12% 

Old-age benefits

6% 

29% 

37% 

16% 

12% 

Unemployment benefits

11% 

40% 

30% 

11% 

8% 

n=8000 

The most difficult application is deemed that for invalidity benefits (a total of 74% consider it 
from not very easy to difficult), followed by accidental/occupational disease benefits (a total 
of  68%  consider  it  from  not  very  easy  to  difficult),  and  old-age  benefit  (a  total  of  63% 
consider it from not very easy to difficult)295.  

16.2 Focus on the employers for the SMEs test 

Employers  results  to  be  distributed  across  all  ages  (4%  between  18-24  years  old,  20% 
between  25  and  34,  29%  among  35-44,  26%  and  22%  between  55  and  66  years  old)  and 
mostly  male  (62%).  Concerning  their  education  levels,  7%  results  to  have  until  11  years  of 
instructions,  28%  have  a  high  school  diploma,  10%  attended  university  for  some  years  and 
55% results to have a university degree or a post-graduate degree. Moreover, 17% declared to 
be in the first quartile of the income distribution, 13% in second, 17% in the third and 41% in 
the fourth (11% didn't reply). 

294 For maternity/paternity benefits, women considered the application relatively easier as compared to men. 
295 This question can be taken as a more accurate measure on the level of system transparency with respect to the previous one since it forces 
respondents to think about doing something in practice rather than simply stating whether or not they are covered. 

163 

 
 
 
 
 
                                                            
Figure  A.31:  employment  status  by  age,  gender,  education  and  individual  income 
distribution

When asked how an extension of mandatory coverage to the non-standard employees and the 
self-employed  would  affect  their  hiring  policies  and  their  administrative  burdens,  the 
employers answered as shown in figures A.32 and A.33. 

164 

 
 
 
 
 
 
 
 
Figure  A.32:  Hiring  preference  in  case  of  extension  of  mandatory  social  protection 
coverage to all forms of employment 

I would rely less on the services of
the self-employed because they…

I would still resort to temporary
contracts to retain flexibility and…

I would still resort to the services
of self-employed to retain…

I would increase open ended
employment contracts if the cost…

9% 

11% 

22% 

21% 

It would not change it

49% 

Figure  A.33:  impacts  on  employers'  administrative  burdens  in  case  of  an  extension  of 
mandatory social protection coverage to all forms of employment 

21% 

31% 

48% 

60%

50%

40%

30%

20%

10%

0%

Increase to a large extent
the time you will need to
fulfil bureaucratic
requirement

Increase to some extent the
time you will need to fulfil
bureaucratic requirement

Not make a big difference

16.3 Focus on platforms workers  

Forms  of  work  and  self-employment  related  to  online  economy  are  also  of  interest  for  this 
initiative.  However,  there  is  still  lack  of  information  about  the  characteristics  of  those 
working on platforms. For this reason the survey also focused on platform economy workers. 
In total, 28% of the total sample is engaged in such activities, 57% doing work for business or 
individuals and 48% selling goods and 12% renting space (Figure A.34). The main motivation 
for  engaging  in  online  platforms  activities  is  the  possibility  of  working  from  home  (55%), 
followed by flexibility (34%), whereas only 11% apparently engage in such activities because 
they were unable to find a regular job296.  

296 When looking at the distribution of motivations among countries, it is possible to detect certain heterogeneity. Please refer to Figure 29 of 
the OpenEvidence Report (2018, forthcoming). 

165 

 
 
 
 
 
 
 
                                                            
Figure A.34: Share of people participating in the online economy by using platforms to 
help generate income, main activities and reason to work for platform economy?  

Yes, doing work for businesses or individuals

Yes, by selling goods and/or renting space

15% 

13% 

No

75% 

Doing work for businesses or individuals

Selling or re-selling goods

57% 

48% 

Renting room or flat

12% 

Because I could not find a regular employment

11% 

Because I can work from home (or other…

55% 

Because I have more flexibility

34% 

Figure A.35: Participation in the online economy by employment status  

I am self-employed (but do not run a firm as…

61% 

11% 

23% 

I am employed part-time on a temporary contract

I am employed full time on a temporary contract

I am employed part-time on an open-ended contract

81% 

78% 

78% 

10% 

8% 

11% 

10% 

10% 

10% 

I am employed full time on an open-ended contract

71% 

12% 

14% 

I do not work and I'm looking for a job

I am unemployed

83% 

85% 

6% 

9% 

8% 

6% 

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

No

Yes, by selling goods and/or renting space

Yes, doing work for businesses or individuals

Both

n=7502 (p<0.001) 

When  coming  to  the  kind  of  employment  of  those  working  on  platforms  economy,  figure 
A.35  shows  that  the  self-employed  are  more  represented  among  those  doing  work  through 
online  labour  platforms,  whereas  very  few  unemployed  are  engaged  in  such  activities  and 
part-timers  are  engaged  in  them  less  than  one  could  expect297.  On  the  other  side,  the 
proportion of employees with an open ended contract also using these platforms to generate 
income is 29%.  

297 This evidence seems not to support the idea that the sharing economy can help bringing the unemployed and under-employed back to 
work. 

166 

 
 
 
 
 
 
 
 
                                                            
Figure A.36 Proportion of income derived through online platforms activities 

Prefer not to say

4% 

I don’t know 

10% 

4% 

4% 

7% 

All

75% to 99%

50% to 75%

25% to 50%

10% to 25%

Up to 10%

n=1893 

15% 

24% 

32% 

Finally, when coming to the part of the total income generated through online platforms, 15% 
generate revenues between 50% and 100% of their income (summing up 75% to 99%, 50% to 
75).  Another  15%  generate  revenues  between  25%  and  50%  of  their  income,  39%  between 
10% and 50%, and 32% only up to 10% of their income (figure A.36).  

167