Posted Workers Directive
How to be compliant with the Posted Workers Directive
What is the Posted Workers Directive?
The EU Posted Workers Directive (PWD) dates back to 1996. It was introduced to guarantee that the rights and working conditions of posted employees are protected throughout the EEA and avoid undermining local labour laws by using foreign (notably cheaper) European workers. It obliges employers to comply with a core set of labour law provisions in the host country, regarding issues such as minimum wage, working time and vacation.
In 2014, the EU adopted an Enforcement Directive to further strengthen the protections for posted workers and stop circumvention of the rules. This has triggered the introduction of new compliance requirements for employers across the EEA. It generally applies to all business travellers and assignees, and requires employers to provide pre-travel notifications to the relevant authorities in the country of posting. It may also impact third-country nationals, depending on the specific rules adopted in each Member State.
The new Directive came into force on 30 July 2020. The new Directive also introduced the principle of equal pay for equal work and made the host country's labour law mandatory after 12 months.
What are the challenges for Swiss employers?
Each EU Member State has implemented the Directive in slightly different ways. This results in different reporting requirements as to how and when a PWD notification is required. Some Member States have exemptions based on days' presence, on the purpose of travel, or on a combination of both. Equally, each Member State has implemented its own penalty structure for non-compliance. There are varying levels of audit activity in different Member States, though generally we have observed an increase in audit activity across Member States notably since the introduction of the Enforcement Directive.
The Directive applies to both international assignees and business travellers. The specific challenges for employers around PWD compliance for business travellers lie with their identification, impacted volumes and data gathering, particularly since the PWD notification is a pre-travel requirement. Enabling PWD compliance without disrupting business can be challenging and requires proper planning and implementation of certain processes. Typically, the lead time for assignees is longer and the number of cases is fewer, meaning that achieving PWD compliance is less challenging than for business travellers from a time perspective, and it puts fewer demands on resources for data gathering and tracking.
For more information on the PWD topic please click here.
For more information on how to navigate the PWD topic for business travellers please click here.
How Deloitte can help
At Deloitte, we have developed a technology focused delivery model underpinned by in depth knowledge of the specific country registration requirements. Our intuitive dashboards are adaptable and can link in with your HR and travel provider systems for transparent, real time reporting.
Contact us to discuss the extent of your PWD obligations and how we can help improve your company’s overall PWD compliance.
For more information about our PWD offering please watch the following video.