As business travel and foreign assignments ramp up in a post-pandemic world, corporates based in the European Union are currently adjusting to new Posted Worker Directive regulations. Scott Turner explains what EU-based companies must now be aware of.
What is PWD?
First adopted in 1996, the Posted Workers Directive has changed over the years, including significant adjustments in the Posted Workers Amendment Directive 2018 which came into effect in July 2020 and has since been the source of much debate and, indeed, confusion.
The new rules add to corporates’ responsibility regarding the tracking of travelling workers and the provision of registration documents to the appropriate labour authorities. There are multiple implications of these new rules for employees, including considerable non-compliance risks, but there is also an opportunity for technology platforms to streamline the entire process.
What is PWD for?
The directive’s core intent is to protect workers that come from one EU country and are sent by their current employer to work in another EU country. This is typically a temporary arrangement, and one that requires the employer to follow certain rules of the host country.
In most instances, workers who are sent to another EU state but do not conduct services within that country, are not considered posted workers. There’s complexity within the rules governing posted workers, especially given the ease of spur-of-the-moment European travel, which means some businesses risk missing registration deadlines.
When does a business traveller become a posted worker?
A business traveller visits EU member states predominantly for meetings, conferences or similar. A business traveller becomes a posted worker when travelling to EU member states is not for the sole purpose of attending meetings or conferences.
What applies to whom?
Those employees that are deemed to be posted workers follow the host country’s rules on compensation, allowances, working conditions, and other details. And, for assignments lasting more than a year, the workers must follow the host country’s specific labour laws.
There are also requirements of businesses sending workers to other EU states, such as telling the employee the length of the engagement, any benefits they might accrue or receive, and the exact currency used for wages payment.
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