Revised Posted Worker Directive to Take Effect on July 30 in Some Member States

July 27, 2020 | European Union

On June 28, 2018, the European Union adopted a directive to revise the original 1996 directive on the posting of workers in the European Union. EU member states were given just over two years, until July 30, 2020, to transpose the revised directive into their national law, as is required for the directive to take effect. However, as of today, only a fraction of member states (e.g., Belgium and Poland) have done so, which means the implementation of the directive in most member states will be delayed. 

The revised directive modifies the original 1996 directive that gave posted workers a core set of rights and guaranteed fair competition for labor. The intent of the revised directive is to ensure that employers in one EU member state posting their employees to another member state abide by the typical employment conditions of the host country. Specifically, the revised directive introduces three main changes to the original directive of 1996:

  • The host member state’s rules on workers’ accommodation and allowances or reimbursement of expenses during the posting assignment will apply to the posted worker.
  • Posted workers must be compensated based on all the mandatory elements of remuneration in the host country rather than just the minimum rates of pay (minimum base salary), as was required by the original directive. This means that sending companies will need to consider bonuses, severance, allowances, etc. when remunerating posted workers. Each EU member state has different remuneration requirements, so sending companies will need to research the host country’s specific remuneration to ensure compliance.
  • There will be time limits for postings and more of the home country’s employment conditions will apply to longer postings. Under the original directive no maximum duration for postings was set; the posting just needed to be “temporary.” Under the revised directive, a posting can last for up to 12 months initially. If a longer stay is required, justification must be provided and approval for a six-month extension may be possible. For longer postings, an extended set of the host country’s terms and conditions of employment will apply to the posted worker, provided the terms are more favorable than the sending country’s terms.

Background

A “posted worker” is an employee who is sent by his/her employer in one EU member state to temporarily provide a service in another member state in the context of a contract for services, an intra-company posting, or a hiring out through a temporary agency.

A directive is a form of law adopted by the EU institutions and then incorporated — or transposed — by EU countries so it becomes law in each country. A directive is typically not applicable until it is transposed. A directive establishes certain rules but it is up to each individual country to develop its own laws to determine how to apply the rules.