EU: Strengthening of wage dumping rules

Members of European Parliament decide upon new rules.

The Members of the EU parliament decided on further tightening the rules for employers posting workers abroad in other EU countries. The aim is to tackle wage dumping and improve working conditions and payment of workers.

More rights for workers
With the new rules foreign workers can claim the host country’s working law and therefore have to be remunerated according to the local minimum wage. Furthermore, regional and sector-specific collective agreements have to be met. Costs for travel, board and accommodation (which has to comply with the host country’s standards) cannot be subtracted from the wage but have to be paid by the employer. The period of posting workers abroad is limited to 12 months, although an extension up to further 6 months can be requested. After these 18 months foreign businesses are treated like domestic businesses, which is why they also have to pay non-wage labour costs (like social security and pension insurance contributions and wage tax).

The further steps to implement the new rules are the following: First, the provisional agreement in Parliament has to be approved by the EU member states' permanent representatives (COREPER). Then it needs to be adopted in the European Parliament's Employment and Social Affairs Committee. Lastly, the draft directive has to be fully approved by both Parliament and Commission before entering in force.

According to EU data, the number of posted workers has increased by 69% between 2010 and 2016. Poland is the country posting the most workers, while Germany, France and Belgium are the top receiving countries. Austria receives mostly workers from Germany, Slovenia, Slovakia, Hungary and Poland. More than half of all workers coming to Austria are from Germany (as of 2015).

More information on preventing wage dumping can be found at the European Parliament.

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