A posted worker is an employee temporarily sent by a U.S. employer to provide services in an EU member state, while remaining employed in the United States. To qualify, the worker must carry out services in the host country. The definition of posting is broad — it can occur through a contract of services, an intra-group posting, or via a temporary work agency.
The European Union’s Posted Workers Directive (PWD) and its enforcement directive specify which country’s employment conditions apply to posted workers and require mandatory prior notification of posting before work begins. These rules provide posted workers with protections similar to those of local employees, as long as these are more favorable than the conditions in the employer’s home country.
This framework helps create a balanced internal market by narrowing the gap between local and foreign companies in terms of working conditions and remuneration.
The U.S. employers posting workers to the EU must comply with administrative requirements, including:
Most of EU countries require employers from non-EU countries to notify authorities before work begins. Intra EU-postings are subject to mandatory PWD-registration in all EU countries.
This person acts as a liaison with local authorities and maintains required documentation that can be easily made accessible to relevant authorities upon request.
Employers must provide and store documents such as the Certificate of Coverage (CoC) for social security, employment contract, pay slips, and working time records in the host country.
The Posted Workers Directive does not set a minimum or maximum duration for posting. If the criteria for a posted worker are met, the worker is considered posted, regardless of how long the posting lasts.
The Directive differentiates between short-term and long- term postings, but this distinction only affects the extent to which local working conditions apply in case they are more favorable than working conditions in the home country. It does not impact the requirement to submit a prior notification of posting. Notification must be submitted before work begins, regardless of the postings’ duration, unless specific local exemptions apply.
A posting of up to 12 months is considered short- term. In this case, only certain local working conditions apply such as remuneration and working time, provided they are more favorable than those in the worker’s home country. Postings that exceed 12 months are considered long- term, and a broader range of local working conditions will apply, again only if they are more favorable than those in the home country.
Short-term postings can be extended by up to 6 months, subject to application and approval from the relevant authorities in the host country.
For U.S. employers posting workers to EU countries, an immigration process is often required, during which working conditions are reviewed. In these cases, compliance with the Posted Workers Directive’s working conditions is not required, although mandatory prior notification of posting may still apply.
If no immigration process is required, U.S. employers must consider local labor law requirements, and mandatory notification of posting may still apply.
More than half of the EU-27 member states require notification about posted workers from organizations outside the EU, including U.S. employers. Non-compliance with mandatory notification and documentation requirements may result in significant penalties, including fines, suspension of work activities, and reputational risk. Additionally, non-compliance can result in penalties and sanctions to host companies or organization, including local government contractors, if they allow foreign workers on their premises or projects without the employer fulfilling the mandatory prior notification of posting. These directives are designed to promote fair competition among workers and companies, protect the rights of posted workers, and compliance with their requirements is regarded as a hallmark of a reliable and trusted service provider.
KPMG LLP U.S.-based Global Mobility Services team is equipped with the resources and subject-matter knowledge who can guide you through the complexities of regulatory landscape of EU posted worker compliance.
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