EU: Posted Workers Directive Now Effective in All Member Countries

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By Andrea Barbara Schuessler

The European Union's revised Posted Workers Directive is now effective in all EU members countries, PricewaterhouseCoopers said in a January 2018 newsflash.

Under the directive, companies that send employees to other countries within the European Union must ensure they comply with host country labor, residence, and documentation obligations. Reporting requirements are a particular concern, PwC noted, since noncompliance might lead to enormous fines. Reporting requirements apply not only to long-term postings but to business trips as well.

“This creates uncertainties and new risks,” PwC said.

Home and Host

The directive also requires that employers retain sufficient documentation to allow authorities to verify their compliance with applicable requirements. Fines can also be levied for failure to comply with documentation standards.

In addition to the principle of equal pay for equal work at the same place, the reform of the 20-year old directive provides legal clarity on the treatment of extra pay and bonuses and improves protections for long-term postings. In principle, nonnationals posted to a member state will become subject to host country labor law after 12 months' residence, 18 months' at the employer's request.

While the revised workers directive introduces stricter regulation aimed at preventing social dumping—the hiring by employers in higher-wage countries of workers from lower-wage countries to keep employment costs artificially low—some problems in this regard remain. Although host country minimum wage requirements must be adhered to, for example, employers need only meet the home country social security contribution requirement. This means that companies based in Eastern Europe, where social security obligations are generally lower than in the west, are able to offer cheaper services than their Western European competitors.

To contact the reporter on this story: Andrea Barbara Schuessler in Berlin at correspondents@bna.com

To contact the editor responsible for this story: Rick Vollmar at rvollmar@bna.com

For More Information

Full text of the directive is available in English here.

For more information on European Union HR law and regulation, see the European Union primer.

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