International employee assignments in light of the reformed EU Posting of Workers Directive
Registration requirements in Europe
With the introduction of labor law registration requirements for postings as part of the implementation of Directive 2014/67/EU of the European Parliament and of the Council of 15 May 2014 on the enforcement of Directive 96/71/EC concerning the posting of workers in the framework of the provision of services (“Enforcement Directive”), the issue of international employee mobility has become a lot more complex. Not only do companies have to observe social security and tax law peculiarities, but they also have to ensure that the assignments of their employees in other European countries are registered in good time. Otherwise, there is a risk of sanctions, which are very severe in some EU countries and should therefore be taken into account when planning postings. This is not just about ‘pro forma’ registrations, but about ensuring compliance with mandatory labor regulations in the country of assignment, which, depending on the country, can go well beyond the minimum working conditions.
Although some EU countries provide for exemptions from the registration requirement in the case of business trips, the distinction between a business trip and a posting requiring registration is often difficult to make in practice. As a result, companies are facing new challenges.
Reform of the Posting of Workers Directive
The reformed Posting of Workers Directive 96/71/EC was approved by the Council of Ministers on June 21, 2018 and is expected to enter into force at the end of July 2018. Upon entry into force, the member states are obliged to transpose this directive into national law within two years. With the reformed Posting of Workers Directive, employees posted from other EU countries are now to be subject to the same regulations on pay and working conditions as domestic employees. Under the previous version of the directive, there was only an entitlement to the minimum standards applicable in the host country, such as the minimum wage. In the future, posted employees will be entitled to all remuneration components – such as Christmas bonuses – in the host country that local employees receive. The aim is to consistently implement the principle of “equal pay for equal work in the same place”.
In addition, secondments will be limited in time for the first time. A duration of no more than 12 months is envisaged. Upon request, the assignment may be extended to 18 months. The amendments made supplement the 2014 Enforcement Directive on the Posting of Workers, which serves to ensure compliance with minimum standards in Europe.
The reform of the Posting of Workers Directive has a decisive impact on the design and implementation of international employee assignments in Europe and presents companies with the challenge of critically reviewing their previous posting practices in Europe and adapting them to the changed framework conditions.
Webinar series for our clients
We are conducting an exciting webinar series together with our partner offices abroad on the topic of employee assignments in light of the (reformed) Posting of Workers Directive with the aim of preparing interested clients for the future challenges and assisting them in overcoming them.
With our webinar in November 2017, we provided an initial overview of the existing registration obligations in Europe by highlighting the legal framework in the countries France, Italy, Austria, Switzerland, Belgium, Romania, Denmark, Sweden and the Czech Republic based on various scenarios. The presentation of the webinar “Business Traveller: Registration Requirements within Europe” can be found here.
The expected effects of the reformed Posting of Workers Directive were the subject of another webinar in April 2018. Here, the innovations were presented in a practical manner and in an international context using an exciting selection of countries. Details can be found here: Web Course on “International Assignments in light of the Revised Posting of Workers Directive 96/71/EU – Why Registration Obligations Matter”.
This fall, our next webinar will take place, in which we will focus more on the implementation of the reformed Posting of Workers Directive in corporate practice, again in an international context. Details will be available here shortly.
Information on our consulting focus and services can be found here.
