The European Union’s Posted Workers Directive was first established in 1996 to prevent social dumping, the practise of employers using cheaper labour than locally available. In short, the directive specifies that workers sent by an employer to work in another EU member state on a temporary basis are entitled to the same treatment with regards to employment and working conditions, as locals.
A variety of protections for posted workers fall under this act, including working and rest periods, non-discrimination protections and rates of pay. All of these must be met by companies posting their employees to fulfil the legal requirements. However, without any tangible way for this to be enforced, many companies either ignored or were unaware of the requirements. As such, in 2014, the Posted Workers Enforcement Directive was adopted to strengthen the original legislation and improve compliance.
Posted Worker Enforcement Directive
The Enforcement Directive uses a variety of measures to enforce the requirements of the Posted Workers Directive, including the monitoring of posted worker notifications. With the need for notifications to be submitted prior to the employee starting work, there is a simple way for member EU states to check that posted workers are being treated in line with the legislation. The addition of compliance monitoring, particularly in the form of unannounced site audits has forced an increased adherence with the directive in many companies, but primarily in “high-risk” sectors, such as the construction industry.
Although the authorities understandably focus most of their enforcement effort into industries which have a high risk of non-compliance with the requirements, this does not mean that other, “safer”, industries should ignore the rules. In fact, it is companies in these sectors which should be most careful when completing and complying with the posted worker notification procedures. Even small mistakes or inconsistencies when submitting notifications in these cases can lead to sudden audits and severe penalties for non-compliance.
A key takeaway for all organisations posting workers across the EU, when it comes to the threat of financial penalties with regards to the enforcement directive, should be that the fines in question are dealt on a per-case and per-employee basis. For this reason, smaller fines can quickly stack into huge financial issues, especially for companies that perform a significant amount to intra-EU secondments. In addition, repeated cases of non-compliance for a business will see the individual value of each individual fine increase, in some cases, drastically.
A delay in filing a posted worker notification or an incorrect or incomplete filing could lead to a fine of up to €10,000 per employee. Fines for companies found to be non-compliant with the working condition requirements for posted workers can see penalties of up to €50,000 per employee in some territories. Cases where severe and repeated non-compliance in demonstrated could result in fines of up to €500,000 per employee.
The downsides of not complying with the Posted Worker Enforcement Directive are, of course, not only limited to the large fines which can stack up for businesses. As financial penalties can be levied at both the sending and receiving company, a history of penalties and poor compliance could lead to an exodus of European customers. That last thing a compliant and well-respected receiving company would want to do is associate with a business with a poor reputation, as to not tarnish their own reputation, and avoid the prospect of significant fines.
In some countries, such as Germany, companies are even being warned that serial non-compliance with regards to the notification requirements could mean that their right to operate in the country will be revoked. Switzerland is working to create a ‘name and shame’ blacklist of foreign employers who ignore the rules, and Benelux countries are starting to intensify their monitoring and collaborate on audits to better catch non-compliant organisations.
Of course, when it comes to avoiding the various penalties that can be levied against your company when it comes to the Posted Worker Enforcement Directive, the main priority should be to avoid non-compliance altogether. There are now various solutions available across the market that can assist businesses with posted worker notification compliance, from all-in-one management systems to employee tracking apps. Finding the right one for your organisation could mean the difference between posted worker harmony and non-compliant disaster.