What is the EU Posted Workers Directive?
Companies registered in other EU countries can accept contracts in Germany and post workers, say to work on building sites or in abattoirs in Germany. If workers posted from other countries earn less for the same work than their local colleagues, it is a distortion of competition, and can result in wage dumping. To produce a degree of uniformity within the EU, the Posted Workers Directive was adopted. The new provisions of the Reform Directive are designed to ensure that foreign workers benefit to a greater extent from the working conditions in place in Germany in future.
What do the new regulations change?
- Under the new legislation, posted workers are no longer entitled merely to the minimum wage, but to the wage laid out in universally applicable collective agreements.
- Workers from other countries will in future also receive Christmas and supplementary holiday pay, as well as bonuses for dirty or dangerous work.
- If employers pay workers an allowance for travel, board and lodging, this sum may not be deducted from the minimum wage.
- If posted workers are required to travel inside Germany for their work, the employer will pay the travel costs.
- All of the applicable terms and conditions of employment prescribed in Germany will apply in future to all foreign workers after they have worked for twelve months in Germany. In justified exceptional circumstances, employers can apply for a six-month extension.
- The planned regulations do not apply to long-distance lorry drivers. The road traffic sector is not covered by the changes.
Where do we go from here?
The Cabinet has adopted the bill to translate into German law the new Posted Workers Reform Directive. This must now be passed by the two houses of the German Parliament, the Bundestag and the Bundesrat. The new provisions are to come into effect on 30 July 2020. This bill translates an EU Directive into German national law. The European Parliament and the Council of the European Union adopted the EU Directive in June 2018.