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On June 28, 2018, the European Commission approved a new set of revisions to the rules on the posting of workers in the E.U. Posted workers are employees who are sent by their employer to do work in another E.U. member state on a temporary basis. E.U. member states have until 30 July 2020 to write these changes into their own laws, but these changes cannot go into effect prior to that date. The original posted workers Directive went into effect in 1996 with the primary goals of protecting workers by giving them a core set of rights and preventing unfair competition between E.U. countries with different labor costs. The upcoming revisions will update two key areas of the directive, the renumeration of posted workers and long-term postings. The implementation of these revisions throughout the E.U. will definitely impact how the mobility industry operates.
Under the 1996 Directive, employers are obligated only to comply with the minimum wage of the country where a worker is posted. The revisions to the Directive mean workers will be entitled to the same renumeration as peers who hold the same job in the posted country. While this does not mean that posted workers will be entitled to the exact same salary, it does mean that posted workers will now be subjected to the same wage scale, and entitled to the same bonuses, allowances, and reimbursement of expenses as their peers. This change will require employers to keep close track of local core mandatory elements of renumeration, beyond just having to know the minimum rate of pay as they did previously.
Another key revision to the Directive affects long-term postings (longer than 12 or 18 months). The revision says that workers on long-term postings will become entitled to all host-country conditions of employment (rights, protections, age-related leave, etc.) except for rules regarding termination. While companies can get around this by limiting postings to 12 months with a possible six-month extension, this will seriously impact the planning and staffing strategies for employers’ mobility programs. The Directive historically has had strict compliance requirements and employers will need to be careful that they are fully compliant with these revisions when they go into effect next year. Employers should already be closely tracking their posted workers and start considering how their status may be impacted by these new requirements.
One additional variable for employers to consider is the impact that Brexit will have on the implementation of these revisions. If the U.K. leaves the E.U. without a deal this October, the U.K. would no longer be required to comply with these revisions. If the U.K. reaches a deal with the E.U. that includes a transition period, it is likely that the EU will codify these revisions into law during this period. If the U.K. does not implement these revisions, it would be one more complication that those in the mobility industry will have to navigate.
Worldwide ERC® knows how important this issue is to the mobility industry and will continue to provide updates as the 30 July 2020 deadline approaches. There also will be a conference session at Worldwide ERC®’s upcoming Global Workforce Symposium in Boston, MA, where you can hear the most up to date information on these changes from industry experts.
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