The employment of seafarers differs to the employment of any on shore employee with further regulations to be considered such as the Maritime Labour Convention, 2006 (MLC). The MLC was established in 2006 by the International Labour Organisation (ILO) and addresses various aspects of seafarers’ work and life at sea, such as social security, repatriation and hours of work and rest.
It is important to consider that there are further complexities such as the flag state of the vessel, the sailing location of the vessel and the nationality of seafarers that can impact the terms within an employment contract.
For example, a French seafarer who is resident in Italy and serving on board a Malta flagged vessel is subject to the social security laws of Malta unless payment is coming from Italy, in which case Italian social security law takes precedence.
Another example is in relation to Norwegian flagged vessels, seafarers who are citizens of an EEA (European Economic Area) country can apply for an exemption from the Norwegian National Insurance Scheme through an exchange of national insurance information by the relevant authorities.
Taxation is an important element to consider, especially with respect to double taxation. An example of this is UK resident seafarers who are working on Norwegian ships or in Norwegian waters as they will generally be liable to pay tax in Norway, in this example the seafarers tax liability may be limited by a tax treaty or their tax paid into the Norwegian tax system is offset against the tax they are paying into HMRC in the UK.
It is important for seafarers to remember that if they are an employee and work at sea, they may be able to reduce their tax by getting the Seafarers’ Earnings Deduction. To be eligible for the deduction, individuals must have worked on a ship, worked outside of the UK long enough to qualify (usually a minimum of 365 days) and been resident in the UK or resident for tax purposes in an EEA State.
The employment and payroll for seafarers is complex and does require a thorough understanding of regulations. Our OS Maritime team is on hand with the expertise and skill to assist you with these areas – please contact us at [email protected].
