EUROPEAN UNION – EU labor ministers reach agreement on posted workers

The agreement to reform the EU’s posted worker rules would put an 18-month cap on how long EU companies could send employees to other EU countries without paying into social security costs.

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IMPACT – MEDIUM

A majority of European Union member states agreed on Monday to reform the EU’s rules on posted workers, handing French President Emmanuel Macron a victory on an issue he has been focused on for months.

  • Reuters and Agence France-Presse reported that a majority of EU member states’ labor ministries backed a compromise plan that would cap posted worker assignments at 12 months, extendable by an additional six months at the employer’s request. Poland, Hungary, Latvia and Lithuania opposed the agreement. The United Kingdom., Ireland and Croatia abstained.
  • The European Parliament will now take up the issue. Additional changes are possible before the agreement is finalized, and it would likely be years before changes are put into effect.

Background: The EU’s handling of posted workers has been controversial for years, tending to pit Europe’s wealthier nations, including France and Germany, against Eastern European countries whose workers are eager for access to Western European labor markets. The compromise agreement was not as ambitious as the reforms Macron initially sought, and the deal would allow for posted workers to work in other EU countries on temporary assignments for up to 18 months without paying into their host country’s social security programs. Macron nevertheless celebrated the agreement, saying on Twitter that he applauded “the ambitious agreement regarding secondment” and that it would bring “more protections, fewer frauds.”

BAL Analysis: The agreement to reform the EU’s posted worker rules would put an 18-month cap on how long EU companies could send employees to other EU countries without paying into social security costs. No deal has yet been finalized, however, and the terms of the agreement may yet change. BAL will continue following this issue and alert clients to any significant developments.

This alert has been provided by the BAL Global Practice group. For additional information, please contact your BAL attorney.

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