IMPACT – MEDIUM

What is the change? The European Commission has proposed changes to its rules on posted workers, aiming to ensure that they generally have the same wage and employment protections as local workers in EU member countries.

What does the change mean? Under the proposed changes, posted workers would be covered by the same pay rules and collective bargaining agreements (where applicable) as local workers. The rules on pay would be extended to cover temporary agency workers in host countries. Workers posted for more than 24 months would be protected by the host country’s labor laws.

  • Implementation time frame: Ongoing.
  • Who is affected: Employers and posted workers.
  • Business impact: The proposals would generally require businesses that post workers in EU member countries to provide the same pay and protections offered to local workers in the host state.
  • Next steps: The proposals must be accepted by the EU’s legislative bodies before they can be implemented.

Background: For EU officials, the freedom to post workers across Europe is one of the cornerstones of the EU’s “single market” concept. Discrepancies in pay and job protections from country to country, however, prompted the commission to propose changes to the current rules on posted workers. The changes focus on three areas: remuneration (pay), temporary agency workers and long-term posting.

  • Remuneration: Posted workers would benefit from the same pay rules as local workers. Posted workers are already covered by minimum wage laws, but the rules would be extended to ensure that posted workers are covered by the same laws as local workers when it comes to bonuses, allowances and pay increases based on seniority. Workers would also be covered by universally applicable collective bargaining agreements. Member countries would also have the option to require subcontractors in other countries to pay their workers the same pay as provided by the general contractor.
  • Temporary agency workers: The proposal provides that any national rules on temporary agency workers would be applied when temp agencies from other EU member countries post workers from abroad.
  • Long-term posting: Workers posted for more than 24 months would be covered by the host country’s national labor laws. Currently, long-term posted workers are covered by national laws that concern health, safety and gender discrimination. Under the proposal, any provision of a host country’s labor law would be applied to workers who are posted for more than 24 months. Labor laws would be applied from the first day of work in the host country in cases where it is anticipated that the worker will be posted for more than 24 months; otherwise, labor laws would be applied as soon as the duration of the posting exceeds 24 months.

BAL Analysis: The changes are designed to root out “social dumping,” i.e., the practice of using cheaper labor than employers are normally permitted to use. If implemented, the changes would force companies to review their pay rates and employment protections for workers posted in other EU countries.  

This alert has been provided by the BAL Global Practice group in the United Kingdom. For additional information, please contact uk@bal.com.

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