EU workers directive: The main directives governing the posting of workers

When a company temporarily sends an employee to work in another EU country (a situation referred to as “posting of workers”), this raises a number of challenges:

• Wage disparities between local workers and posted workers
• Risks of social dumping (paying lower wages by circumventing local labour laws)
• Unfair competition between companies

To prevent such abuses, the European Union has introduced a set of directives. These are common rules that each Member State must incorporate into its national legislation.

There are currently three such directives:

Directive 96/71/EC of 16 December 1996

Concerning the posting of workers in the framework of the provision of services.
This directive is the cornerstone of the legal framework governing intra-European posting of workers.

It aims to facilitate the free provision of services within the European Union, while ensuring that posted workers are granted a core set of social rights in the host Member State. It seeks to strike a balance between companies’ economic freedom and the protection of workers.

The directive applies to companies established in an EU Member State that temporarily post workers to another Member State in the context of:

1. Service provision contracts.
2. Intra-group postings.
3. Temporary work agency assignments.

For the record, a posted worker is employed in one Member State but temporarily works in another Member State without establishing a permanent residence there.

Working conditions to be respected in the host country (the “core rights”).

The foreign company (the employer) must guarantee posted workers, at a minimum, the working and employment conditions of the host country concerning:

• Minimum wage rates.
• Maximum working hours and rest periods.
• Minimum annual paid leave.
• Conditions of worker posting.
• Health, safety and hygiene at work.
• Equal treatment between men and women.

Each Member State must provide information on the applicable working conditions. They must also ensure compliance with these rules within their territory, without unduly restricting the free provision of services.

This directive aims to:

• prevent social dumping.
• avoid companies using posting of workers to circumvent national social rules.
• ensure fair competition between companies established in different Member States.

In practice, companies posting workers must comply with certain administrative obligations (notifications, documentation, designation of a local representative, etc.) depending on the host country.

Directive 2014/67/EU of 15 May 2014

Concerning the implementation of Directive 96/71/EC. Its main objective is to combat abuse, social fraud, and the circumvention of rules by certain companies operating in a cross-border context.
It notably includes:

1. Strengthening the obligations of companies posting workers

• The directive requires companies posting workers to demonstrate their genuine activity in the Member State of establishment, in order to prevent the abusive use of “letter-box” companies.
• A multi-criteria assessment is provided for (local turnover, infrastructure, workforce, etc.) to verify the actual existence of the company.
• It also mandates holding and retaining certain key documents on-site during the posting period (employment contract, payslips, proof of payment, working hours).

2. Detection and combatting of fraud and abuse

• Special emphasis is placed on fraud related to posting of workers, particularly situations where a company claims to post a worker despite the absence of a genuine employment relationship with the original employer.
• Member States must establish proportionate and dissuasive sanctions in the event of infringements.

3. Strengthening of controls

• The directive grants Member States the right to carry out proportionate and non-discriminatory controls to verify the legality of postings.
• Indicative criteria are provided to identify a “bogus posting”: duration, nature of the contract, actual subordination, etc.

4. Joint liability in subcontracting

• A principle of joint liability of the contracting authority is provided for in the construction sector. It may be held responsible, along with the subcontractor, for the payment of wages owed to the posted worker in case of non-payment.
• This provision can be extended to other sectors by Member States. non-paiement.

5. Improvement of administrative cooperation

• The directive strengthens the exchange of information between national authorities via the IMI system (Internal Market Information System).
• Strict deadlines are introduced to respond to requests for information or cross-border assistance.
• Member States must designate national liaison authorities and cooperate effectively.

6. Cross-border enforcement of sanctions

• Administrative sanctions and fines imposed in one Member State may be recognised and enforced in another Member State without further recognition procedures, except in exceptional cases.

This directive also provides for the implementation of the following elements:

• The Prior Posting Declaration (PPD);
• The requirement to designate a representative in the host country;
• The obligation to keep certain documents available to the labour authorities for up to 24 months after the end of the posting;
• Timesheets.

DIRECTIVE (EU) 2018/957 of 28 June 2018

It amends Directive 96/71/EC and revises the posting regime by introducing new obligations.
It was adopted with the aim of strengthening the protection of posted workers while ensuring fair competition between companies within the European Union. It thoroughly revisits the rules governing cross-border posting, rebalancing social and economic rights.

1. Principle of equal treatment

One of the major contributions is the establishment of the principle of “equal pay for equal work”. Unlike the previous directive (96/71/EC), which imposed a “core” set of minimum conditions, the new directive broadens this foundation:

• The posted worker must benefit from all elements of remuneration provided for by the legislation and collective agreements of the host State, and not only the minimum wage.

2. Maximum duration of posting

A maximum posting duration is set:

• Beyond 12 months (or 18 months upon justified notification), the posted worker benefits from all the working and employment conditions of the host State, except for contract termination procedures and social protection coverage.

3. Extension of the scope of collective agreements

Member States must ensure the application of representative collective agreements in the relevant sector (and not only those of a general scope) to posted workers.

4. Improvement of information obligations

Member States are required to:

• Publish, in a clear, transparent and accessible manner, the applicable working conditions on a national website (including remuneration elements and relevant collective agreements).
• Strengthen administrative cooperation through the IMI (Internal Market Information) system..

5. Professional expenses

Employers must reimburse travel, meal, and accommodation expenses if these are required by the legislation or collective agreements of the host Member State.

6. Fight against fraud

The directive encourages Member States to strengthen controls, sanctions, and information exchange to combat abuses such as subcontracting chains or false postings of workers.

7. Transparency for subcontractors

In certain sectors (notably construction), Member States may require that the wages paid to subcontractors be aligned with those of the principal contractor, with the aim of ensuring pay equity.

8. Entry into force and transposition

• Member States were required to transpose the directive by 30 July 2020 (it came into force in France on 30 July 2020).
• It does not apply to the international road transport sector, which is subject to specific legislation (the Mobility Package).

These three directives form the legal framework for the posting of workers within the European Union, whether in the context of a service provision or intra-group mobility.

How does it work in practice?

When a company posts a worker to another EU country, it must notify the local authority via an online portal, known as the posting notification.
Additionally, it must comply with the local working conditions (salary, working hours, rest periods), health and safety rules of the host country, and ensure the posted worker remains affiliated to the Social Security system of their home country through an A1 form.

Here are some examples:

1. In France, what declaration is required before posting a worker?
A prior posting declaration must be made on the SIPSI website.
Example: A Polish company sends 3 plumbers to a construction site in Lyon. It must complete a SIPSI form before their arrival and the start of the assignment.

2. Does a company have to appoint a representative in Italy?
Yes, a legal representative must be appointed to liaise with the Italian authorities, as in France.
Example: A Spanish company posts truck drivers to Milan: it must appoint a representative who will act as the main contact for the Italian labour inspectorate.

3. Does Spain apply a minimum wage for posted workers?
Yes, posted workers on assignment in Spain must receive at least the wage provided by the local collective agreements.
Example: A Portuguese company posts a waiter to Barcelona: they must be paid the wage applicable in the local Hospitality sector.

4. Which portal is used to notify a posting in Belgium?
The declaration is done via the LIMOSA portal.
Example: A German company posts technicians to Flanders: it must complete a LIMOSA declaration before the start of the assignment.

5. Does Austria impose strict wage control?
Yes, Austria, like France, verifies actual pay slips.
Example: A Slovak company posts workers to Vienna: it must provide translated pay slips if requested by the authorities.

6. Does Ireland require specific wages for posted workers?
Yes, in Ireland, depending on the sector (such as construction), specific wages must be respected for posted workers.
Example: A Bulgarian company posts roofers to Dublin: it must apply the hourly rate set for the Irish construction sector.