Understanding employer obligations in the Posted Workers Directive

What do employers have to do under the new law?

In practical terms, the key task relating to the Posted Workers Directives, which was brought in under the 2014 Enforcement Directive, is the ‘Obligation to make a simple declaration to the responsible national authorities, at the latest at the commencement of the service provision, containing relevant information necessary in order to allow enforcement at the place of work’.

Filing a Pre-travel Notification

In simple terms, this means that for anyone who falls within the definition of a posted worker from the host countries’ point of view, a pre-travel filing or Notification needs to take place. Usually, most of the data that makes up this notification is fairly basic – personal data relating to the individual, details of their employment and their employer, where they will be working and how long for etc., but most countries have a few elements of ‘non-core’ data requests which are very specific requirements to those countries – such as local ID numbers of the companies being visited or personal data such as family size or even the worker’s mother’s maiden name.

However, alongside the different definitions of posted workers that we’ve seen above (which take into account length of trip, purpose of trip and even the industry of the employer), each host country has a separate, independent process for actually making the filing. Increasingly the notification can be done by online (eg in Netherlands, Italy, Finland etc) via a dedicated web portal, but email or even postal notifications are still required in some (eg Romania and Greece). Some countries require additional documents to be submitted (eg Luxembourg and Iceland) alongside the pre-travel notification, and, as we have seen, every EU state has a data requirement which is unique. All of this data needs to be sourced and included on the Notification before the individual arrives. 

In response to significant industry pressure about the complexity of the process, there is an EU initiative to standardise the data that is provided to the host authority. The progress towards this is slow however.

Appointing a Liaison Person

The appointment of a liaison person, with whom the local authorities in the host can liaise regarding an individual notification, or more generally about a posted worker’s presence, is the second core requirement of the Enforcement Directive. In most organisations there would already be a ‘normal’ point of contact for local labour authorities and under the Directive there is no reason why that role could not be extended to the PWD requirement. The liaison person role carries no personal liability regarding notifications.

Practically, the challenge regarding the filing of notifications is that the employing entity which is sending the posted worker needs to have a clear understanding of who the host liaison person is to be able to complete the Notification accurately. For larger organisations sending travellers to and filing notifications in many European countries, there is therefore clearly a need to have up to date information about role changes in the host entities to which its employees might be travelling.

Retention of Social Documents

Lastly, there is the requirement for the employer to retain, and make available on demand (and potentially translated into the host country language) ‘social documents’ relating to the posted worker. Again, the lack of definition creates challenges to compliance in this area. While some documents would generally be easily accessible (contracts, assignment letters, payslips etc), individual countries have their own requirements for social document retention in the case of employment audits. Timesheets, for example, are often requested in Poland to assess compliance with the Working Time Directive, which causes difficulties for individuals employed by businesses which don’t routinely track an individual’s hours of work.

The Equal Pay for Equal work provisions in the 2016 legislation added an extra layer of complexity for all cross border workers. To recap, the requirement is that a posted worker must receive remuneration at least at the level of the legal minimum wage in the host country, and also receive any other pay and benefits mandated by nationally applicable collective bargaining agreements.

This obligation created another challenge, particularly for shorter term visitors. While wage-related obligations under the Directive are reasonably easy to assess and, if necessary, deal with (eg by paying a supplement to increase pay for host-country workdays where necessary), some non-financial workers’ rights are much more difficult. If a home country employer’s vacation policy allows for 20 days per person per year, but the labour law in the host mandates 25 days per person per year, does the home employer need to calculate and provide an extra hour or two of vacation for a project worker who is in the host for a month? Or even a few days? If the employing company maternity leave policy is for three months on 50% pay, but the labour law in the host requires 6 months on full pay, how do you deal with the uplift?

The shorter the (non-exempt) visit, the harder it is to comply with more general ‘workers-rights’ obligations. At this stage, we have not seen much enforcement activity relating to non-financial rights under the Posted Worker Directives, but even while companies are trying to deal with getting Posted Worker Pay correct, there is still potentially an exposure in the area of less tangible benefits, particularly while there is little or no official host country guidance on what practical steps the employer should actually take.

Expatriates and Assignment letters

As far as the 12 month ‘localisation’ part of Equal Pay for Equal Work provisions are concerned, there is no impact on the vast majority of project workers and business traveller.

However expatriates are certainly impacted by this legislation. The usual approach to expatriation is to send individuals to their host countries with an assignment letter addendum to their home country contract, which sets out their additional benefits, supplementary terms and conditions etc that will apply while they are on assignment. Due to the EP4EW rules, these assignment letters should ideally contain a set of ‘standard’ host country terms and conditions that would ordinarily apply to domestic employees, and employers need to set up a process to ensure that the expatriates are provided with whatever benefit or work condition is provided for.

This sort of assignment letter content is currently very unusual in an expatriate context: generally assignment letters have the same structure and content for all assignees, regardless of where they are going to. Increasingly, each company with expatriates moving to EU countries needs to have country-specific assignment letters for those expecting to be in post for more than 12 months.