Across the Pond
Issues to consider when sending workers to and within Europe — even temporarily
By Sophie Maes
In today’s global marketplace, employees are often sent from one country to another on temporary projects or assignments. However, some legal issues may arise when sending employees abroad even if only temporarily. Here are some issues staﬃng ﬁrms should consider when sending workers to and/or within Europe.
Authorization. European Union (EU) nationals do not need a work permit to work in another EU Member State. However, until December, some EU states still require Bulgarian and Romanian nationals to have a work permit. Non-EU nationals, though, do need authorization to work in Europe, and a separate work permit is required for each country where the employee will work. Exceptions may exist, but should be carefully checked for each relevant country. In addition, the employee may need a separate visa and/ or residence permit to be allowed to temporarily stay in the relevant country.
Local requirements. Some EU member states require temporary agencies to be licensed, including foreign temporary agencies sending their workers to a user company located in that country. Criminal sanctions may apply in case of non-compliance.
In addition, the Temporary Agency Work Directive requires that temporary agency workers be treated in the same way as the user company’s permanent workers. As a result, their basic working and employment conditions (such as salary, working time, vacation, public holidays, etc.) should at a minimum be those that would apply if they would have been recruited directly by the user company. However, some member states have provided derogations under certain conditions. Hence, it should be checked for each country if there are any such derogations.
Jurisdiction. What law applies to the employment contract and what are the minimum “hardcore” local working conditions? In the event the employee remains in the service of the home country staﬃng ﬁrm, the home country law typically will govern the employment contract. However, depending on the circumstances of the case, the employee may also be able to invoke some mandatory laws of the host country. According to the Rome-I Regulation, the law chosen by the parties may not deprive the employee from the advantages of the mandatory rules of the country where the employee “habitually works,” though at what point an employee is considered to be “habitually working” in the host country has not been deﬁned. In any event, if the employee has actually been hired to be sent abroad or has mainly worked in the host country, the employee is likely to be considered as “habitually working” in the host country and may be entitled to invoke the mandatory employment laws of the host country.
In addition, the Posted Workers Directive requires each EU member state to set a minimum “hardcore” of local working conditions which must in any event be adhered to, and they can vary greatly from country to country. Hence, staﬃng ﬁrms should check in the relevant EU member state what minimum local working conditions must be respected.
Social security contributions. In which country social security contributions must be paid depends on the countries involved. In case of secondments within Europe, employees may under certain conditions remain aﬃliated to their home country social security scheme for a maximum period of ﬁve years. This is important as huge diﬀerences exist in social security charges between the various countries. For example, an employer’s social security contributions on gross annual salary of €100,000 would be €43,400 in France and €12,514 in the U.K.
In case of secondments from outside Europe (for example, the U.S.), it should be checked if a totalization agreement is in place between the home country and the host country and if so, under what conditions employees may remain aﬃliated to their home country social security regime.
Taxes. It is also recommended to check if a double tax treaty exists between the home country and the host country. If so, employees who are seconded for less than 183 days may under certain conditions remain entirely taxable in their home country. However, it is of utmost importance to verify in each situation the relevant double tax treaty as the wording and conditions may diﬀer from treaty to treaty.
Sophie Maes is an attorney partner at Claeys & Engels, the Belgian member firm of Ius Laboris. She can be reached at firstname.lastname@example.org.