With all the spotlight, scramble, and unknown surrounding the rapidly approaching March 29th Brexit deadline, it may be easy to overlook that there is another rule change in the EU that is starting to keep Mobility and HR teams up at night. In the summer of 2018 the EU’s update to the Posting of Workers Directive (PWD) was finalized and published for the world to see.
The PWD protects the employment rights of employees working temporarily in another European country and prevents unfair competition between businesses in lower and higher-cost European territories. While the effective date for compliance to the update begins 30 July 2020, savvy organizations are already making preparations and evaluating what impact it will have on their international employees – particularly given the new fines for failure to comply.
Naturally the onus for compliance falls on Mobility and HR teams, but where do you begin? Organizations should start by identifying what employees they have in an affected country, how long they have been there and what benefits/remuneration are they receiving. Under the new regulation an employee may only be treated as a posted worker for 12 months. After that 12 month period said employee is entitled to most of the employment rights of their host location, including rights incorporated in any applicable collective bargaining agreements. Employers can request a 6 month extension for an employee, but must do so on a per employee basis.
Once a list of potentially impacted employees has been collected an organization can act appropriately to ensure compliance – either returning the employee to their home location or adjusting benefits and remuneration appropriately. It is important to note that each member state will have their own terms and conditions of employment, so the action required for a given employee will depend on what country they are posted in.
In addition to actioning active posted workers most organizations will want to proactively update their policies to ensure that all posted workers moving forward are done so in a compliant manner. This may mean a shift towards shorter term assignments (less an 12 months) or an updated benefit and remuneration structure. Putting the right policies in place for affected countries will remove risk and additional work down the road.
With the looming threat of steep fines for non-compliance, now would be the time to consider implementing a global mobility management system to enable better tracking, reporting and management of posted workers. Such a system would be able to instantly generate reports of who you have in a given location, how long they’ve been there, and what remuneration and benefits they are receiving. In addition it would help ensure consistent and appropriate application of policy.
While the updates to the PWD may require concentrated action by organizations to remain compliant it doesn’t have to be a harrowing experience for Mobility and HR teams. By taking a step back to evaluate your current risk position, taking the necessary steps to remedy any non-compliance, and reforming internal mobility policies to ensure compliance moving forward you can weather the PWD update as smoothly as possible.
For further reading, you may find these resources valuable: