Introduced in 1996, the Posting of Workers Directive offers protection to European Union (EU) employees working within the EU. The Posted Workers Amendment Directive 2018, which had to be implemented by individual member states by 30 July 2020, offers further protection and ensures compliance. Employers now have additional responsibilities, including keeping track and providing pre-travel notifications of posted workers to the relevant authorities. There are strict penalties for non-compliance.
For starters, let’s define a posted worker
Given the consequences of not complying with the new rules, it is critical that employers understand which employees fall under these regulations. A posted worker is defined as:
An employee sent by their employer to carry out a service in another EU Member State on a temporary basis in the context of a contract of service, an intra-group posting, or a hiring out through a temporary agency.
Generally speaking, workers who are sent temporarily to work in another member state but who do not provide services there don’t fall within the definition of posted workers. This includes workers on business trips (when no service is provided) and those attending conferences, meetings, fairs, and/or undertaking training.
However, it is important to follow the local interpretation of activities that are excluded from the requirements listed in the directive. Workers who are not covered by the directive are not subject to the mandatory registration procedures, rules on minimum wages, etc.
What are the implications of the directive?
There are many for both the employer and the employee.
- Posted workers will be subject to host country rules on remuneration, working conditions, accommodation conditions, and allowances/expenses
- Posted workers on assignments exceeding 12 months (or 18 months in case of a delay) will be fully subject to the host country’s labor laws (excluding termination rules and occupational pension schemes)
- Posted workers will be subject to any universally applicable collective agreements across all sectors
What are the rights of a posted worker?
From 30 July 2020, posted workers are entitled to:
- Maximum work periods and minimum rest periods
- Minimum paid annual leave
- Remuneration, including overtime rates. Remuneration is determined by the national law of the member state to which the employee was sent
- The conditions of hiring-out of workers, in particular, the supply of workers by temporary employment undertakings
- Health, safety, and hygiene at work
- Protective measures regarding the terms and conditions of employment of pregnant women or women who have recently given birth, of children, and young people
- Equal treatment between men and women and other provisions on non-discrimination
- Specific conditions of accommodation when the employer provides it
- Allowances or reimbursement of expenditure to cover travel, board, and lodging expenses
What does that mean for the employer?
Several things. Firstly, employers must notify the labor authorities in the posting country of any new postings in a prescribed format. They must also implement a tracking system for international postings, as well as the allocation of a liaison person for labor inspections.
If an employer is considering sending employees to another member state, they must tell the employee the length of the employment abroad, what benefits in kind they will receive, and the currency they will get paid in.
Remember, the Posted Workers Directive is regulated differently in each member state. Therefore, take steps to ensure you adhere to that country’s rules to avoid paying a fine for non-compliance.
Typically, the notification can be made online, by e-mail, or in written form directly with the relevant authorities. Exceptions may apply, so do the research and avoid any compliance issues.
What about social security?
The social security aspects are still governed by EU Regulation 883/2004. Therefore, A1 certificates should be obtained. However, the people behind the directive are working to simplify the rules.
If you have any questions about these changes coming, please reach out to our Tax Team.