Vistra Insights

The Netherlands’ new posted worker requirement in an EU context

A new Netherlands regulation goes into effect March 1, and will align with an updated EU directive governing EU workers who are temporarily posted to another EU country where they don’t normally work. Other EU member states are adopting or have adopted their own laws to comply with the directive, and all states must be in compliance by July 30, 2020.

The EU introduced the original Posted Workers Directive in 1996 to prevent the exploitation of workers who moved from EU countries with lower pay and fewer protections to more prosperous EU nations — and to prevent those workers from undercutting the local labour force. France was an early adopter. The directive was strengthened in 2014, and the latest revision, the EU Posted Worker Regime, expands it further.

The updated directive aims to ensure that EU workers who are posted to a different EU country will attain pay and working conditions equal to that of local workers. Provisions also apply to working hours, overtime, breaks, holidays and paid leave, and workplace safety standards.

In contrast to EU-wide legislation such as the GDPR, the Posted Worker directive orders EU states to follow its principles, but each nation sets its own regulations within the overall framework.

The basics of the EU Posted Worker directive

For countries receiving posted workers, the directive applies to all 27 EU member states, plus Iceland and Switzerland.

A “posted worker” is defined as one who stays in the host country for up to 12 months; however, the limit may be extended for another six months. In other words, the real upper limit is 18 months. Beyond that, the employee is no longer considered a posted worker. Sales and marketing workers are exempt from the directive.

For all EU countries, employers sending posted workers must:

  • File a posted worker declaration in advance of the posting, usually with the receiving country’s labour authority.
  • Obtain A1 Social Security Certificates for all affected workers.
  • Designate a liaison to represent the company to labour authorities and deal with information requests.
  • Retain copies of employment documents for up to five years after the posting.

Failure to comply with the rules, or with the local labour laws they relate to, may result in significant fines and a ban from posting more workers in the country where the violation occurred.

Compliance in the Netherlands

The directive is especially urgent for EU companies who have sent or plan to send workers to the Netherlands, where they must comply with new regulations starting March 1, 2020.

EU companies sending workers to the Netherlands are required to post a notification of posted workers and supply information about the posting company and the workers, including A1 Social Security Certificates or other documentation. The government has posted a downloadable checklist concerning required documentation. Another government web page contains a list of industries to which the law applies, as well as answers to common questions and other information.

Posted worker notifications may be posted online as soon as the Netherlands sets up an internet portal for the purpose, which is expected to happen February 1.

Diverse interpretations, broadened scope

As noted, individual EU nations set their own laws to enforce the provisions of the directive, and the directive leaves room for interpretation. As member states amend their laws and regulations to accommodate the directive, significant differences are emerging.

For example, though the directive is written to cover workers moving from one EU country to another, some nations — including France — have expanded their laws to include non-EU nations— including Canada and the U.S. — that send temporary workers to the EU.

One quirk in the directive is that while it defines the maximum length of stay for posted workers, it does not specify a minimum stay. In Ireland, authorities have seized upon this loophole to declare that worker assignments or visits lasting for a single day may require employers to file a posted worker notification.

Increased enforcement

The strengthening of the EU directive is part of a growing trend of increased scrutiny and enforcement of cross-border employment and money transfers. As they revise their laws to fit the amended directive, some nations have vowed to cooperate with one another and increase audits, and others have threatened penalties or blacklists for noncompliance.

In this climate, it is essential for multinationals sending temporary workers to Europe to follow the changing laws closely. They should develop a reliable tracking system for temporary workers and their documents, and make sure they offer a channel of communication between knowledgeable staff and all affected workers and managers.

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