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 reforming the rules on the posting of workers. The aim is to ensure better protection for posted workers and a level playing field between companies that are local and those that are posting workers.
On 29 May 2018, MEPs approved the new rules, ensuring people will receive equal pay for doing the same work in the same area.
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. Industry accounts for 69.1% (including construction with 45%), services for 29.4% and agriculture and fishing for 1.5%.
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
Under the proposed new rules posted workers are subject to the rules on remuneration in the country they have been set to. This could either be set by law or by certain collective agreements. Employers would have to pay for travel, food and acommodation instead of deducting these costs from workers' salaries.
The maximum posting period would be capped at 12 months, with a possible extension of six months. After that working conditions will be subject to the labour rules of the country they are working in. Cooperation between EU countries to tackle fraud would also be boosted.
In addition temporary work agencies would have to guarantee posted workers the same conditions that apply to other temporary workers hired in the country they have been sent to.
These new rules would also apply to the transport sector once specific legislation regarding it has entered into force.
Posting in numbers
Between 2010 and 2016 the number of posted workers in the EU increased by 69% to 2.3 million. However, posted workers still only represent 0.4% of the EU’s total workforce.
Most posted workers (82.3%) 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 Slovenia. Workers are usually posted in neighbouring countries.
Once the directive enters into force, EU countries will have two years to transpose the rules into national law.
This article was first published on 16 October 2017 ahead of the committee vote and updated on 29 May 2018.