IMPACT – MEDIUM

What is the change? The European Parliament has adopted an EU directive on revised rules for posted workers.

What does the change mean? The revisions primarily concern equal pay and working conditions of posted workers compared with resident labor, but the directive also limits the duration of a posting to 12 months with one possible six-month extensions. Although workers may continue to work in the host country beyond that, they then become subject to all of the host country’s labor laws.

  • Implementation time frame: EU member states have two years from May 29 to adopt the directive into their national legislation and implement it by the end of this period.
  • Who is affected: Employees on assignment from one EU country to perform services in another EU country.
  • Business impact: The directive is likely to raise business costs of posting workers within the EU, as remuneration and other accommodations must be consistent with those of workers in the host country.

Background: The European Parliament approved the revisions to the Posted Worker directive on May 29. The key provisions of the revised directive are:

  • Posted workers must earn equal pay for equal work in the same location.
  • The duration of a posting is set at a maximum of 12 months with one six-month extension, after which all of the host country’s labor laws will apply to the worker if he or she continues to work in the country.
  • All remuneration rules of the host country must apply to posted workers.
  • Travel, board and accommodations must be paid by the employer and not deducted from workers’ salaries.
  • Posted workers must be provided decent accommodations in line with the host country’s national rules.

The original directive on posted workers was passed in 1996. EU member states only recently adopted another directive from 2014 on the enforcement of posted worker rules that imposed detailed notice requirements and rules on retention of records for both sending companies and local host companies.

BAL Analysis: The new directive signals that the EU continues to be concerned about the misuse of posted workers and social dumping that undercuts workers in host countries. As with other EU directives, individual countries may vary as to when and how they implement it and put it into effect in practice. BAL will follow the progress of the directive and provide updates as individual countries adopt it into their national laws.

This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.

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