3 minute read
Minimum wage requirements within Europe in the context of posting of workers
Mădălina Racovițan
Partner, Head of People Services
The freedom to provide services across EU Member States is one of the cornerstones of the Single Market. Free movement of services means that companies can provide a service in another Member State without needing to establish themselves in that country. To do that, they must be able to send their employees to another Member State to carry out the tasks required.
Regulating the working conditions applicable to those workers is therefore necessary for the smooth functioning of the Single Market. And regulations are becoming clearer but also stricter, with every passing year.
In this respect, when using posted workers, employers must make sure they comply with the labor law requirements of the
Posting Directive – including minimum wage requirements, as well as the country-specific requirements under the Posting Directive and the Enforcement Directive in relation to registration with the host country authorities, prior to the date of arrival.
Amid globalization, digital transformation and greater desire for flexibility, compliance with legal requirements is creating an extraordinary challenge for organizations.
To help companies meet their legal obligations in relation to posting of workers, KPMG has initiated a series of annual surveys covering minimum wage and registration requirements within the European Union, European Economic Area and Switzerland.
This guide is not an exhaustive list of all possible risks and obligations. The legislation around postings is still subject to change and in some cases still leaves room for interpretation. Therefore, there is no recipe or generally applicable rule across the EU. Each posting should be looked at individually and analyzed on a case by case basis.
Given the complexity and the multitude of issues around international postings, and the severity of the penalties for non-compliance, it is highly recommended that employers posting employees abroad should seek expert guidance on minimum wage legislation.
This part of the KPMG Guide on Posting of Workers is meant to give companies a clearer view on what a posting is, how it is regulated and what are the main changes which may have an impact from a cost or compliance perspective.
What is a posted worker?
A posted worker is an employee who is sent by his/her employer to carry out a service in another EU Member State on a temporary basis, in the context of a contract of services, an intra-group posting or a hiring out through a temporary agency.
Does the nature of the activity matter?
In some countries, exemptions may apply in the case of non-income generating activities such as training or internal meetings. However, since these cases are not clearly dealt with in the Posting Directive, the domestic requirements should be carefully observed.
Is the business traveler a posted worker?
Not all countries define a posted worker in the same way. In some countries business travelers are subject to the same requirements as posted workers, while in others, they are not. Especially when it comes to registration procedures, business travelers may be treated differently.
However, business travelers are a very complicated subject and we recommend checking the applicable regulations in each host location.
What are the rights of a posted worker?
EU law sets out a set of mandatory rules on the terms and conditions of employment to be applied to posted workers and its main purposes are:
• To guarantee that these rights and working conditions are protected throughout the EU
• To ensure a level-playing field and avoid social dumping where foreign service providers can undercut local service providers because their labor standards are lower.
These rules establish that, even though workers posted to another Member State are still employed by the home company and are subject to the law of the home Member State, they are entitled to a set of core rights in force in the host Member State:
Minimum rates of pay
Maximum work periods and minimum rest periods
Minimum paid annual leave
The conditions of hiring out workers through temporary work agencies
Health, safety and hygiene at work
Equal treatment between men and women
This part of the KPMG Guide on Posting of Workers provides an overview of the minimum wage requirements within the European Union, European Economic Area and Switzerland (hereafter referred to as “the EU, EEA Member States and Switzerland”). In this section, we detail our main findings with respect to the minimum wage levels across the EU, EEA Member States and Switzerland, trends observed and conclusions.
Read more in the publication below
