Confused about the EU’s Posted Worker Directives? Get the vital basics in this 5-minute-read.
By Kent O’Neil, Global Legal Analyst, Newland Chase
Posted worker rules are in play in the EU again. On 21 July 2018, the European Union enacted an additional revision to the previous Posted Workers Directives further reinforcing the principle of “equal pay for equal work” between posted workers and local employees. The latest revision calls for stricter rules and enforcement regarding remuneration, temporary agency, and long-term postings. While much of the details and implication of these latest revisions will be worked out by each member nation through their implementation of this new directive (due by July 2020), the new “equal pay“ provisions are likely to control aspects such as local wage scales, collective bargaining agreements, seniority policies, expense reimbursements and allowances, etc.
This latest Directive serves as revision to the two earlier Directives that endeavour to create an EU-wide standardized framework for the protection of posted workers: the 1996 Posted Workers Directive (96/71/EC) and the 2014 Posted Workers Enforcement Directive (2014/67/EU). To date, the various EU member states now have implemented both of these earlier directives into their national laws.
RED FLAG: As the Directives only mandate that each EU member nation implement corresponding provisions into their national laws, there is significant variation in the rules and processes that companies must follow in each country where they post workers.
With each EU member state now in the process of amending their national laws and regulations to comply with the new directive, and enforcement of those laws on the uptick in various countries over the last two years, Newland Chase is taking this opportunity to remind HR and mobility managers of the basic requirements of these directives as they apply to employees posted for temporary assignments in EU countries.
Definition of Posted Worker
A Posted Worker is defined by the Directives as “a worker who, for a limited period, carries out his work in the territory of a Member State other than the State in which he normally works.” Thus, a “posting” occurs whenever a worker employed by a company in one EU nation, is assigned to temporarily work at a location in another EU country, such as an intra-company transfer assignment. While the definition in the Directives is limited to workers posted from other EU nations, individual country statutes may expand that definition beyond this to include workers employed at locations outside the EU but assigned to a location in the EU.
Terms and Conditions of Employment
The primary aim of the Posted Workers Directives is to ensure that when workers are posted from one EU country to another they are afforded equivalent working conditions and protections that are provided to local, non-posted workers. At a minimum, posted workers must be treated the same as local workers regarding minimum rates of pay, maximum work periods, minimum rest periods, paid holidays and leave, as well as equal protection rights and workplace health and safety standards. Companies that are already in compliance with their local labour and workplace laws – and extend those same conditions to their posted workers – will generally be deemed in compliance with this aspect of the posted worker rules.
Designated Representatives or Liaisons
Companies sending or hosting posted workers are required to have a “designated representative” or liaison with whom the local labour authorities will communicate regarding the posting. This representative is responsible for submitting the required notices and responding to any correspondence or requests for information from the authorities regarding the posting. Local rules as to who may function as the “designated representative” vary by country – i.e. whether they must be a company employee or officer, must be a permanent resident of the host country, or may be a third-party firm contracted by the company.
Posted Worker Declarations
Companies sending or hosting posted workers must submit notice of the posting and details of the assignment to the local labour authority prior to the start of the assignment and whenever a material aspect of the posting changes. In most countries, the notice is referred to as a “Posted Worker Declaration” and is submitted to the labour authority either via an online portal (if available) or posted mail. The content of the declaration likewise varies by country and is often dictated by the online or paper form used.
RED FLAG: Failure on the part of either the sending company or host company to comply with any aspect of the host nation’s Posted Worker Rules (including notification and document retention) can result in significant financial penalties and debarment from future postings. Newland Chase has observed a significant uptick in enforcement of national posted worker laws in numerous jurisdictions – including imposition of significant financial fines against companies for failing to file the required declarations in a timely fashion.
Companies are also required to retain specific records regarding their posted workers. While details may differ by individual country, the documents must be retained – either in paper or electronic form – and be produced if requested by authorities for at least one year after the end of the posting. The documents that are generally required to be retained include:
- Employment Contracts and Assignment Letters;
- Time Sheets – of actual hours worked;
- Salary Slips – must show wages paid and deductions;
- Proof of Actual Payment of Wages; and
- Proof of Social Security and Health Insurance Coverage.
Quick Note About Social Security
While the Posted Workers Directives do not change the existing social security laws and requirements applicable to temporary assignments in the EU, the increased emphasis on the conditions of employment of posted workers and the communication of such conditions (including social security coverage) to labour authorities makes compliance with social security laws even more imperative – including obtaining proper A1 Certificates confirming the employee’s enrolment in a national social security system.
Is Your Company Compliant?
The Posted Worker Rules inhabit that grey area at the intersection of immigration, labour law, social security, and salary and benefits administration… and it’s easy for compliance to “fall through the cracks”. With significant penalties for non-compliance, companies assigning employees within the EU are wise to involve their immigration specialists early in the process of considering EU assignments. Likewise, for assignments already ongoing which may not have complied with the administrative requirements such as the posted worker declarations, the old adage “better late than never” may prove to be sound advice and avoid or minimize potential penalties for non-compliance. Your immigration specialists may be able to bring you into compliance with a minimum of negative impact.
This blog’s intent was obviously only to draw quick attention to key issues that may be overlooked. For more detailed guidance, companies are encouraged to reach out to their Newland Chase immigration specialists or contact us at firstname.lastname@example.org.
Related Content: Do I Have a Posted Worker?
Kent O’Neil is a Global Legal Analyst and frequent writer on international business and global corporate mobility for Newland Chase. Kent received his Juris Doctor from Penn State’s Dickinson School of Law and a Bachelors in Economics from Clarion University. Prior to joining Newland Chase, he worked in both private practice and in-house for a multinational corporation operating across North America, Europe, Asia, and the APAC region. Now based in the U.S., Kent has lived and worked as an expat in Pakistan and the Philippines.
This blog is informational only and is not intended as a substitute for legal advice based on the specific circumstances of a matter. Readers are reminded that immigration laws are fluid and can change at a moment’s notice without warning or notice. Please reach out to your Newland Chase contact should you require any additional clarification or guidance. Written permission from the copyright owner and any other rights holders must be obtained for any reuse of any content published or provided by Newland Chase that extend beyond fair use or other statutory exemptions. Responsibility for the determination of the copyright status and securing any permissions rests with those persons wishing to reuse this blog or any of its content.