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Currently, if an employer posts its employee to an EU country to provide services, it is required to ensure that the employee enjoys “minimum protection” in the host country’s legislation. Therefore for posted employees, therefore, the local minimum wage, the maximum working time and the like apply, whereas the rules more favourable to the posted employee shall apply.
This year, an amendment to the EU Posting of Workers Directive has been approved, which will considerably tighten the rules in favour of the settlement of conditions between local and foreign workers, and thus the protection of the labour market and the competitiveness of local businesses in the host country.
Under the principle of “equal pay for equal work“, all posted workers will be newly covered by sectoral collective agreements, remuneration beyond the basic salary based on the law of the host country, etc. from the first day of posting.
The amendment to the Directive also provides for a specific maximum posting period for the application of almost all mandatory provisions of the labour law of the host country. So far, no such period has been set and once again the limit will be one year (with the possibility of extension to 18 months).
However, the amendment to the Directive does not affect the possibility of applying the derogation from the social security legislation of the state of employment in the form of posting, where the basic time limit remains two years.
Member States must adopt and publish the necessary measures under national regulations by 30 July 2020, and from then on the new rules will also be applicable as soon as possible.
Nevertheless, we recommend that you bear the new regulation in mind today when planning to post your employees for a longer period or when setting up internal processes and cost estimates for future posting of employees to the EU.