THE BLOG

New EU Rules to Protect Posted Workers and Prevent Abuse

17/03/2014 15:07 GMT | Updated 17/05/2014 10:59 BST

Valuable, even necessary. Companies often post workers abroad to fill service contracts in other EU countries. However, these postings can be far from an unadulterated blessing. The workers involved can be exploited and companies may try to avoid tax and social security contributions in host countries.

Each year one million people are posted to another European country by their employers, especially in sectors such as construction, transport and agriculture, for example fruit pickers. Although the situation has evolved over recent years, especially after new member states joined the EU in 2004 and 2007, the legislation governing posted workers hasn't kept pace.

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The EU is now updating those rules, which date back to 1996. Under a deal negotiated by the European Parliament and the Council, workers posted abroad will be better protected as the working conditions are more clearly defined. In addition it will also become easier for member states to check if postings are genuine. Firms sometimes fraudulently register workers as coming from other member states in order to cut down on taxes and social security contributions. Countries will be allowed some flexibility regarding how they carry out compliance inspections.

In practice this would mean that national authorities check where a company is registered, where it pays tax and social security contributions and where it recruits posted workers. In addition they will look at where business activities take place and how many contracts there are to supply services. Although this could involve more work for the member states, many of them will welcome this opportunity as they have been concerned that companies are abusing the rules.

Countries can determine if a posting a genuine by, for example, checking all the paperwork At the same time people who declare themselves to be self-employed will face checks about whether work was done, what the work relationships are and what the remuneration is.

All of this should help to ensure workers posted abroad enjoy liveable working conditions, while national government can crack down on unfair competition from companies refusing to play by the rules.

An important step will be taken this week when the European Parliament's employment committee will be asked to endorse the draft law. Once both MEPs and the Council have approved the plans, EU countries will have two years to transpose the new rules.

Photo copyright Jeff Kubina (released under Creative Commons License)