Despite the fact that regulations tightening the regime for posting workers to EU countries came into force in 2020, the majority of entrepreneurs still fail to comply with the requirements of the EU and the country of posting when sending workers abroad. Unaware of the rules, employers often only find out about the posting requirements during inspections by foreign authorities. Unfortunately, by then it is too late and the entrepreneur faces severe sanctions.
Who is a posted worker?
A posted worker is a worker who is temporarily sent by his or her employer (principal) to perform a service in another EU member state. Importantly, from the perspective of EU law, it is irrelevant whether the posted worker is seconded (receives an addendum to his/her employment contract temporarily changing his/her place of employment) or sent on a business trip (by order of the employer). In both cases, we are dealing with a posted employee.
Posting of employees abroad – sources of law
Let us recall that the issues related to posting are regulated by Directive 96/71/EC of the European Parliament and of the Council (EU) (as amended after 28 June 2018) and the national legislation of the EU countries implementing it. There is still a lingering belief among Polish employers that it is sufficient to provide employees with A1 certificates and a foreign minimum wage. This is a mistake that can expose not only the entrepreneur but, in some cases, also its employees to negative consequences. It also does not help that consultants of Polish social security authorities (e.g. ZUS), while confirming that employers have fulfilled their obligations on the Polish side, sometimes mislead entrepreneurs as to the requirements applicable in the country of posting.
Posting of employees abroad – basics
Whether an employer is faced with sending its employees abroad to provide services to contractors or sending them to its foreign company, it will have to comply with the local terms and conditions of employment. The situation is similar when it is the foreign company that uses a temporary work agency to hire a Polish employee to work for its company.
The conditions in question relate to:
minimum rest periods
maximum working time
minimum paid annual holidays
remuneration (including all its compulsory elements) as stipulated by national law or universally applicable collective agreements
health and safety at work
protective measures for pregnant women, women immediately after childbirth and young people (under 18 years of age)
equal treatment of women and men
accommodation conditions for workers in the host country, if to be provided by the employer
allowances or reimbursement of travel, board and lodging expenses when these are required during the posting.
Compliance with local working conditions alone is not sufficient to ensure full legality of the posting process. All because of the additional administrative obligations imposed on employers in connection with customs control, as well as the so-called ‘rule of preference’.
Posting of workers abroad – additional requirements
The countries to which a worker is posted establish additional obligations depending, among other things, on the sector of the company (or within which the posted workers work), the amount of remuneration or the form of employment of the persons sent abroad. Most commonly, these obligations relate to notifying the competent authorities prior to the start of the posting, as well as ensuring the availability and translation of the relevant documentation. It is worth noting that the type and scope of obligations vary depending on the country to which employees are posted.
Particularly formalised are the cases of posting abroad of foreign nationals (citizens of non-EU countries) and labour intermediation (posting of employees under the rules of temporary work agencies). In such cases, most countries require the registration of Polish employers in foreign trade registers, obtaining the relevant licence and residence title for employees.
Local employment conditions – what are they?
According to the Posting of Workers Directive, a posted worker cannot have less favourable terms and conditions of employment during the posting period than local workers employed in the same/similar industry. On the other hand, the most favourable terms and conditions of employment possible must be provided to posted workers, taking into account the legal system of the country from which the worker is posted (Poland) and the country of posting (abroad). The issue is also not made any easier by the fact that in most Western European countries we are not only dealing with statutory labour regulations, but dozens of so-called collective agreements that may also apply to posted workers. The shortcut of providing the posted employee with a minimum foreign wage and a holiday period is therefore not enough.
Posting of workers abroad – ignorance of the law harms
Below is an overview of the range of penalties provided for failure to comply with posting regulations in the representative EU countries to which Polish employers most commonly post employees:
Germany
Penalties of up to EUR 30,000. Penalties of up to €500,000 in the case of violations in the field of temporary work agencies.
France
Sanctions of up to EUR 500,000 (depending on the number of posted workers)
Netherlands
Administrative sanctions of €750 to €8,000, which may be increased by 75% depending on the circumstances of the infringement.
Belgium
Administrative sanction: from €50 to €6,000, in extreme cases criminal liability of 6 months to 3 years’ imprisonment.
In the event of non-compliance with residence regulations for posted workers from outside the EU, the country’s customs authorities may deport a third-country national to his or her home country.
Social security
The issue of social security is only one of the many obligations of the posting employer, but nevertheless it should not be neglected. In order to benefit from the possibility to pay social security contributions on the employee’s salary in Poland for the duration of the posting, an A1 form must be applied for. The A1 document confirms that the posted employee is registered in the social security system of the posting country and does not have to pay contributions in the country of posting.
When applying for an A1 document, the start and end dates of the posting in another EU country must be stated. The maximum period of posting that can be given is 24 months.
Posting of workers abroad – risks
Posting employees abroad involves risks not only in terms of failing to comply with the regulations that condition the posting itself. There are a number of pitfalls exploited by foreign control authorities with regard to, among other things, tax regulations or broad definitions of labour intermediation. For example, in Germany, some of the sectors in which workers are posted are automatically recognised as labour intermediation, which obliges Polish entrepreneurs to obtain the relevant licence before starting to post. The lack of such a licence entails a fine of up to EUR 500 000. In addition, as a rule, only EU citizens may be posted to Germany as agents of employment, which excludes the possibility of posting, for example, citizens of Ukraine or Belarus. Another example is the so-called tax establishment, the creation of which obliges entrepreneurs sending employees abroad to tax part of their profits in the countries of secondment. The popular 183-day rule will not always apply either.
Unfortunately, as in the case of posting regulations, most entrepreneurs only become aware of the aforementioned risk points in the event of an inspection by foreign customs, labour inspectorates or the tax authorities, in which case the possibilities of defending the company’s interests are already very limited.
Do not hesitate – rely on experts
ATL Law advises entrepreneurs on matters related to international labour mobility, including tax and social security issues. We support companies in completing the formalities related to the posting of employees abroad, including to EU and non-EU countries, relocations, as well as the performance of work by posted employees in the territory of Poland. We approach each posting process on an individual basis, indicating responsibilities and a course of action appropriate to the client’s industry and scale of operations. We help to establish the right collective agreements, show how and where to report secondments and minimise the risk in case of inspections.