Posted Worker Compliance – The Unseen Risks

The risk of falling afoul of European Union' Posted Worker Directive is not high because of the large fines, but because it’s easy to slip up and become non-compliant if you’re not fully aware of the requirements in each country. Depending on the host nation, workers may have to be declared even if they are visiting for a single day or meeting.

The variation in rules found throughout the EU and increased monitoring measures make it easy for companies to slip up with posted worker notification compliance. It’s therefore essential that businesses have a robust system in place to monitor and file notifications where necessary.

Financial 

The primary risks facing companies that are caught without full posted worker notification compliance run the risk of amassing large fines. The value of these fines varies from country to country, but are normally in the region of 10,000 EUR for first offences, and 20,000+ EUR for repeat offenders.

It should be noted that these fines are levied on a per employee and per infringement basis; therefore, fines will stack if a group of posted workers are found to be non-compliant. An organisation could rapidly find itself looking at a fine in excess of 100,000 EUR for a small group posting without the appropriate paperwork in place.

Reputational 

In addition to the significant financial penalties at stake, the potential damage to an organisation’s reputation should not be overlooked. Being subjected to disciplinary actions will not only lower your standing with local authorities and likely give rise to more regular surprise posted worker audits, but also affect your standing with other businesses. Many companies will not want to work with those who have been fined for posted worker violations previously as they want to avoid any additional risk.

Unexpected Non-Compliance

Because of the varied application of posted worker legislation across the EU there are many situations which you may think are exempt from the notification requirements, but are not, potentially leaving your organisation in trouble. Here are a few examples of cases many expect to be exempt, but are not:

• Employees travelling for a 1-day meeting in any of 20 countries, including Germany, Ireland, Italy, Luxembourg and Spain
• International transport workers delivering goods in any of 21 countries, including France, Germany, Ireland and Spain
• Employees installing goods purchased by a client in any of 21 countries, including France, Germany, Luxembourg, Iceland and Portugal

Examples

1 – Workers posted from Croatia to Austria

The Croatian company, Brodmont d.o.o leased 217 employees to an Austrian business, Andritz AG, for the purpose of short-term work. A site inspection revealed that neither the necessary employment permits nor the necessary wage documents were available for the employees of the Croatian company. The district commission imposed a cumulative fine of approximately 3,250,000 EUR on the managing director of the Croatian company. The district commission also imposed fines of 2,600,000 EUR and 2,400,000 EUR on each member of the executive board of the Austrian plant manufacturer.

2 – Workers posted from Lithuania to Denmark

Lithuanian temporary agency workers were posted to work at Danish plant nurseries, where they worked alongside domestic workers. The hired Lithuanian workers had the right to be remunerated under the Danish collective agreement in force at the user entity. The receiving Danish entity, was fined 100,000 DKK (13,333 EUR) per worker for attempting to circumvent the collective agreement and for underpayment of wages to the Lithuanian workers.

3 – Workers posted from Portugal to France

A Portuguese entity posting workers to France produced fake payslips with constructed working hours to cover up the fact that the real working hours and payments were underpayments in breach of the agreement. As a result, 39 workers were entitled to outstanding payments and the entity was fined 2,900,000 EUR.

4 – Workers posted from Poland to Denmark

A group of Polish painters were acting as hired workers at a Danish entity which was found to be underpaying workers in relation to the agreed salary. The Polish workers were under the instruction and control of the receiving entity, which was evidenced by the Polish painters and by the daily manager of the receiving entity before the Court as well as during a control visit. The receiving entity was ordered to pay a penalty of 2,500,000 DKK (333,000 EUR)