Understanding the penalties and risks of non-compliance with the Posted Workers Directive
The passing of the 2016 Enforcement Directive gave a clear indication that the European Council expected EU member states to take concrete steps to give the legislation ‘teeth’.
As a result, each member state implemented a range of financial penalties relating to non-compliance with the three basic requirements set out in the Enforcement Directive. Penalties for failure to meet the requirements to appoint a liaison person or retain social documents are still comparatively rare, and in many cases are wrapped up in local labour law enforcement policies. However the requirement to file a pre-travel notification for individuals subject to Directives has been specifically legislated for in substantially all EU member states.
Non-filing penalties
The penalty regimes which apply across the EU differ widely. In most countries there is a defined range of penalties which can apply to the failure to file a notification, and the actual penalty applied is dependent on cooperation, the scale of the issue, previous enforcement etc. At the very lowest end, the failure to file can lead to a fine of less than €100 per case. At the highest end, fines of more than €150,000 can theoretically be imposed. A number of countries have imposed severe penalties for failure to comply (Austria in one case issued a €13 million penalty to the Directors of two companies for Posted Worker infringements), to the extent that the European Court of Justice has become involved to rule on the proportionality of some enforcement measures taken.
From a risk point of view, and in spite of the Enforcement Directive, it is clear that different member states attach completely different levels of attention to the requirement to file a pre-travel notification. Some, such as Austria and Bulgaria, are very focussed on the issue, and regularly carry out labour law inspections to ensure compliance. Others – for example Germany and Finland – are more focussed in their approach, either targeting their efforts on particular sectors, or choosing to be more liberal in their approach to enforcement of certain categories of cross border workers (for example those on short business trips).
The European Labour Authority
There is no ‘one size fits all’ approach to risk relating to Posted Workers, and the situation is rather dynamic. The European Labour Authority have been promoting cross border compliance heavily since 2019 and providing support to inspections of cross-border activity. In 2023, the ELA, together with the Commission, launched the ‘Posting 360 Programme’, a framework for cooperation between stakeholders with a view to improving the exchange of information, enhancing administrative cooperation and increasing knowledge of the EU and national rules on the posting of workers. This type of initiative suggests that increasing the level of enforcement is still high on the EU’s agenda and, now that the legislation around Posted Workers has ‘settled in’, it seems unlikely that the level of risk will reduce, particularly as business travel returns to pre-pandemic levels.
