All you need to know about posted workers in the EU and how the Parliament wants to stop unfair competition and protect workers.
The issue of posted workers has always proved a controversial one as it can be tricky finding the right balance between protecting workers and boosting competition between companies.
The EU is currently working on a reform of the rules on the posting of workers. The aim is to ensure fair salaries, solid protection for posted workers and a level playing field between companies.
Parliament’s employment committee adopted its position on Monday 16 October. MEPs voted on 25 October in favour of Parliament starting negotiations with the Council on this. Read more about the plenary vote in our press release.
What posted workers are
Companies can provide services in other EU countries without having to establish themselves there by sending out employees to carry out the tasks required. This sending out is known as posting.
Posted workers are still legally employed in the EU country their company is based in and are not subject to the labour market rules of the country where they are temporarily working. This also means they continue to be covered by social security of their country of origin.
Postings can also be used to fill skill shortages, especially when highly-qualified personnel is needed. It is a common practice in certain economic sectors. The construction sector accounts for 42% of total postings, followed by the manufacturing industry (21.8%), health and social services (13.5%) and business services (10.3%).
However, posted workers are only based in another EU country temporarily, so they are different from workers who move abroad to work there on a long-term or permanent basis. Unlike posted workers, they are subject to the same rights and obligations as other people working in that country and also covered by its social security.
The need for a reform
Current EU rules governing posted workers date back to 1996 and set minimum conditions for them, such as minimum pay rates, maximum working periods, minimum paid annual holidays and how they should be hired.
Over the past 20 years the EU’s economy and labour market has evolved significantly, which makes a revision of the legislation necessary. Companies can decide to take advantage of the difference in labour costs between EU countries, which can lead to unfair competition.
As employers are not obliged to pay posted workers more than the minimum wage set by the host country, they usually earn less than local workers for the same job. According to the Commission, posted workers can earn up to 50% less in some cases.
Loopholes in the current legislation have led as well to an increase of fraudulent practices such as companies that exist on paper only or fake subcontracting, that involve the exploitation of posted workers.
The main points of the reform
The idea behind the proposed reform is to ensure that posted workers are treated the same as local workers when it comes to pay, including bonuses and allowances.
French EPP member Elisabeth Morin-Chartier, one of the two MEPs responsible for steering the proposal through Parliament, said ahead of the committee vote: "The revision of the posted workers directive is vital: today we have the opportunity to build the foundation of a social Europe. We are faced with a crucial choice: whether to yield to national divisions or to demonstrate our political unity. We cannot afford to delay on protecting European workers and establishing a framework for fair competition between companies. This is what my political initiative is all about."
All labour rules applying to local workers would also apply to posted workers after a certain amount of time. The principle of equal treatment would also apply to workers hired through work agencies.
Dutch S&D member Agnes Jongerius, the other other MEP responsible for steering the plans through Parliament, said ahead of the committee vote: "We will stop the race to the bottom in the European labour market. Collective agreements that benefit local workers will also apply to posted workers in the future. So at last we will reach the goal of equal pay for equal work at the same workplace. This is an important step towards creating a social Europe that protects workers and makes sure there is fair competition. With this proposal we will fight inequality and take good care of workers."
Posting in numbers
Between 2010 and 2015 the number of posted workers in the EU increased by 41.3% to 2.05 million. However, posted workers still only represent 0.9% of the EU’s total workforce.
Most posted workers (85%) get sent to EU countries in Western Europe, with Germany, France and Belgium receiving about 50% of all posted workers. The countries that send out the most posted workers are Poland, Germany and France. Most workers are posted in neighbouring countries.
This article was first published on 16 October ahead of the committee vote and updated on 25 October to include the result of the plenary vote.