How Can The EU's Posted Worker Directive (PWD) Work For You
Updated: Aug 24
The EU adopted the Posted Worker Directive (PWD) in 1996, nearly 27 years ago with the purpose to protect local and foreign employees. It has been updated twice, once in 2014 and again in 2020 to accommodate changes in talent management. There are many nuances to managing Posted Workers due to each EU state having its own set of rules that need to be individually followed. What is a Posted Worker? Posted Workers work on a temporary basis in a European Union (EU) member state to carry out specific work activities or services. Their services are temporary in nature and can be a short-term business traveler or project worker who travels to a EU country for a limited period of time (no longer than 18 months). It can include working at a local office for the benefit of the local entity, traveling to a client site or the use of contingent workers through an agency in the host member state. Posted workers do not integrate into the host country’s local labor market due to the temporary nature of their role/position in the host member state and retain employment in their home member state; however, they must comply with all the local social security and labor market requirements. Duration of Stay in the Member State The length of stay depends on how much time is needed to complete the work. Most remain for a brief period of time, while others may be granted an extension for up to six months or 18 months depending on the project and/or conditions set forth in the host member state. However, as soon as the job/role has been completed, the posted worker must immediately leave the host member state and return to their home country (or be terminated from their contractor status for that particular project). Importantly, although the Posted Worker Directive is acknowledged as an all-encompassing EU directive, each member state has its own specific set of rules and notification processes which must be adhered to as well. Each state may be varying interpretations of which activities are considered work. Therefore, the host member state must be notified of the posted worker’s assignment. Evolution of the Posted Worker Directive (PWD) The original 1996 directive was to address the free movement of workers within the EU and for them to have their rights protected under laws in the individual member states they completed their temporary assignments. Changes were made to the original directive due to concerns about protecting the employment rights of the citizens in the host country that may have been competing for the jobs taken by the posted workers. The terminology “social dumping,” or utilizing posted workers for less pay was a hot topic and determined to result in unfair and unequal labor conditions. In 2018, a second Posted Worker Directive was enforced. Further clarification resulted. Now an appointed liaison/local representative to the host company’s office including a requirement to keep records of posted workers. A third Posted Worker Directive was implemented into law in 2020, which continued to focus on “social dumping.” It Directive now includes equal pay for equal work for posted workers. This key step allows companies to no longer have the ability to pay less for a posted worker’s similar relevant work and background. This allows for equal capacity to move workers fairly and equitably amongst EU member states. Duty to Notify The Posted Workers Directive provides a set list of the requirements for global companies to work in the EU. All countries are required to provide a Duty to Notify the proper authorities. EU member states further set their individual requirements which, too, must be followed. The Duty to Notify includes: • Travel Details • Duration of Time the Posted Worker will be in the EU State • Contact Information of the Employee • Anticipated duration of the Assignment/Project Posted Workers Rights The Posted Worker Directive ensures each member state must protect the employment rights of posted workers. However, if working conditions for the employees in the sending member state are more favorable than the conditions established under the PWD, these rules would not apply. Important Facts • EU Member State requirements vary widely, so careful attention to the state the posted worker is going to must be taken. • Each EU State has different timeframes for informing their government that must be adhered to. • A representative must be obtained in the host EU State. • Additional immigration requirements may be required (residency permit, short-term stay visa) • The conditions of work must meet the terms established under the PWD, which can include suitable accommodations, filing for health insurance, registering for Tax and Customs administrations, declaring the salary of the employee (there may be more depending on the state)
The Future of Work The Posted Workers Directive has come a long way in the 27 years since its adoption, adapting regulations to support its posted worker workforce while protecting its member states. Companies that choose to work with EU member states must comply with PWD regulations. Companies that fail to do so can be penalized and fined by the host country’s government. Posted workers are a prime example of how to utilize a fluid and flexible workforce optimization model to its greatest effect. Our Expertise MSI’s Immigration Team are experts in all facets of immigration strategy including Posted Workers Notifications to drive new opportunities for Business, HR, and Talent, which drive company business goals. Our focus is helping organizations optimize and develop long-range strategies for success.