Minimum wage requirements within Europe in the context of posting of workers
KPMG in Romania 2017 Content
03 Introduction
General overview 05
09 Main findings
19 Country-by-country report Introduction Employee mobility has become a key component of today’s business model. Businesses now need employees in the right place, at the right time, with the right skillset. And fast. Therefore, businesses now seek to benefit from the advantages of a more flexible and mobile workforce, and they encourage movement of personnel, especially within the European Community.
On the other side, the employee’s profile is In the context of increased focus of the changing. What was considered desirable ten Commission on how minimum wage or even five years ago is no longer sufficient requirements are implemented and for today’s employee. Flexibility, in terms of observed in the member states especially time, location and nature of activity is the key in the context of European free movement word for describing tomorrow’s jobs. In the of people, we note that there are debates context of globalization and digitalization, this towards a more coherent coordination trend seems only logical. of minimum wage requirements at EU level, including the introduction of EU-level Employee mobility is a key aspect of the threshold. It is still difficult to estimate at this European Union (hereafter “the EU”), given stage whether such minimum wage levels that freedom of movement for workers is will be introduces across EU member states, one of the Union’s cornerstones, and it is however we will continue to see an increased most often seen in the form of international focus on ensuring compliance with current Mădălina Racovițan assignments. Partner, requirements. However, an international assignment, as Global Mobility Services This report is focused on the minimum wage rewarding as it may be, also raises challenges KPMG in Romania requirements in EU/EEA member states for the authorities, employers and employees. and Switzerland, and is intended to present These challenges need to be identified and a general overview of each member state in planned for in advance in order to avoid terms of levels of minimum wage, how the non-compliance issues from any side. In minimum wage is determined, as well as the this respect, country specific rules must be potential penalties which may be imposed kept in mind in order to minimize any legal on the parties involved if the minimum and/or reputational risk. Moreover, the EU wage requirements are not observed. The has implemented complex guidelines and report also comments on the status of the directives, for the purpose of coordinating and transposition of Directive 67/2014/EU into regulating international movement of people. member states legislation These regulations often focus on minimum rights provided to posted workers, especially the level of the minimum wage to which the posted employee is entitled during the posting period. Posting situations are dealt with under Directive 96/71/EC (the so-called “posting Directive”), which has been recently complemented by a new enforcement directive, Directive 67/2014/EU.
3 Minimum wage requirements within Europe in the context of posting of workers Section 1 General overview
The term “minimum wage” is defined minimum wage, but those seeking work in a lot of ways in specialized literature, should also have a guaranteed minimum legislation and other materials. Although its level of income. definitions are not identical, they all refer in Minimum wage systems vary considerably principle to the minimum amount that an across the European Union. Within the next employee must receive for the work carried sections we will see that some are defined out. for the entire labour force, and in this case The minimum wage aims to protect we are referring to a national statutory employees from exploitation, by establishing minimum wage which applies with no a minimum rate under which any exception. Others apply only to a part of the employment relationship is considered labour force, for instance sectorial minimum unacceptable. Consequently, although it wages that bind only trade union members is not explicitly aimed at reducing wage or are collectively agreed by social partners. inequality and poverty, it is clearly related to Some are relatively generous while others both of them. Adopting a minimum wage are comparatively low. helps counter “social dumping” - a term Where unions are strong, minimum wages that describes the employment of cheaper are often established through collective labour, sometimes involving migrants or bargaining, usually sector-specific. In these moving production to lower-wage countries cases the minimum wages agreed are more Minimum wage systems across the competitive. European Union Where unions are weaker, governments The intention of the European Commission have often prescribed statutory minima or is for all EU member states to introduce extended by law collectively agreed wage minimum wages for their workers, in an floors, in most cases with a single national effort to combat growing social inequality threshold and no exclusions. In these cases, and poverty. The Commission agrees that minimum wages are not very generous. each state should be free to set its own
5 Minimum wage requirements within Europe in the context of posting of workers Are we heading towards a unified minimum To whom does the Posting of Workers wage within the European Union? Directive apply There is also a debate as to whether Directive 96/71/EC (hereafter “the Directive”) is introducing minimum wage coordination at concerned with the free movement of workers European Union level would be an option. and stipulates that workers are protected by According to statistical analysis, an EU the law of the member state in which they minimum wage threshold would affect a larger work. As such, it applies to undertakings portion of the workforce in those countries based in a member state which, within the with statutory minimum wages, since they framework of the transnational provision tend to have a larger low-paid segment of of services, post workers to the territory of employees. Nordic member states, and more another member state in one of the following generally countries where minimum wages three situations: are set up by collective bargaining, have 1. When an employer posts a worker to traditionally opposed the idea, considering another member states on its own that it may undermine their existing national account and under its direction, under mechanisms. a contract which the employer has Before going into the requirements within each concluded with the party in the state for specific country with regard to the minimum whom the services are intended. wage, when discussing posted workers 2. When an employer posts a worker to an within the EU, the provisions of the EU Posted establishment or to an undertaking owned Workers Directive (96/71/EC) should be by the group in the territory of another observed. On 15 May 2014, Directive 67/2014/ member State. EU was implemented, enforcing the Posting of Workers Directive. Let us briefly outline the 3. When the employer is a temporary main provisions of the Directives. employment undertaking or placement agency, and hires out a worker to a user undertaking, based in or operating in another member State.
What does the Posting of Workers Directive 96/71/EC cover? It aims to protect the social rights of posted workers by providing for core employment conditions that must be applied to posted workers in their host country. These core employment conditions are:
Maximum work periods and minimum rest periods
Minimum paid annual holidays
Minimum rates of pay, including overtime rates
The conditions of hiring-out of workers, in particular the supply of workers by temporary employment undertakings
Health, safety and hygiene at work
Protective measures with regard to the terms and conditions of employment of pregnant women or women who have recently given birth, and of children and of young people
Equality of treatment between men and women and other provisions on non-discrimination What is its main purpose? The need for a new Directive they are posted, the place where the undertaking carries out the substantive In order to guarantee that the The Posting of Workers Directive part of its business activity and where rights and working conditions of a had not been updated since 1996 it employs administrative staff, as well posted worker are protected within and it was felt that its contents were as whether the posted worker returns the European Union, the Directive no longer sufficient in our globalized to or is expected to resume working in provides for a core of mandatory rules economy. It is for this reason, and the home country. relating to the terms and conditions through political pressure from several of employment to be applied to an members of the European Union, The new Directive also provides for employee posted to another member that the Directive was reviewed, to additional rights to posted employees state. In addition, where a member provide additional protection to posted in the subcontracting chain. As a state has certain minimum terms and employees. consequence, posted workers in the conditions of employment, these must subcontracting sector can hold their On 15 May 2014, Directive 67/2014/ also apply to the workers posted to direct subcontractor, in addition to EU (hereafter “the new Directive”) that member state. or in place of the employer, liable for was implemented, modifying the all wages owed. Thus, in cases of The Directive also makes reference 1996 Posting of Workers Directive. non-compliance, customers may be to the minimum pay which should be The deadline for transposing the new held responsible, leading to a loss of granted to the posted workers. But Directive by member states was 18 reputation and damaging the business who defines and who establishes this June 2016. At the date of issuance of relationship. minimum pay? this report (February 2017), 18 member states have already implemented the Another important part of the new For the purposes of this Directive, new Directive into local legislation, Directive is focused on increasing the concept of minimum rates of pay whereas 13 states are in the process cooperation between national referred to is defined by the national of implementing it. authorities and administrations law and/or practice of the member in charge of compliance. These state to whose territory the worker is The purpose of a new Directive measures include time limits for the posted. Consequently, when a posting The purpose of the new Directive is supply of information between national is to be made, the minimum wage to help fight abuse and circumvention authorities as well as the introduction requirements in the member state to of the applicable rules and ensure that of fines for companies that fail to which the individual is posted should specific situations qualify as genuine comply with the applicable regulations. be considered by the employer who is postings. Thus, a wider framework making the posting. It is consequently Posted workers also have increased should be taken into consideration, important for an employer who is protection as they can bring legal paying attention, for example, to the planning to post workers to another action both in the home or host place where the undertaking has its member state to understand what jurisdiction. So this is an issue that registered office and administration, the minimum requirements are in that requires careful attention. where it pays taxes and social security other state, as this could generate contributions, the place where posted considerable additional costs. workers are recruited and from which
7 Minimum wage requirements within Europe in the context of posting of workers Section 2 Main findings
The purpose of this material is to give an overview of the member states imposing minimum wage requirements, what the requirements consist of, as well as what salary components could be considered as part of the minimum wage. This survey also covers the status of implementing the new Directive in the local legislation of each member state.
In this section, we detail our main findings Do all member states have a minimum with respect to the minimum wage wage? requirements within the EU, EEA member There are two main groups in terms of states and Switzerland. minimum wage policy. The larger group The information presented in this report is consists of the countries that have based upon a brief survey covering issues a national statutory minimum wage. relating to minimum wage requirements Currently, 20 out of 31 countries under and compliance requirements with respect analysis have a national minimum wage. to postings to 31 countries within the The second, smaller group consists of European Union, European Economic Area countries that do not have a national and Switzerland, valid for January 2017. minimum wage requirement. What does This information is of a general nature this mean? This does not mean that these and is not meant to consider all situations countries do not have minimum wages which might occur. It is consequently at all. It just means that the minimum recommended that, prior to posting an wage is not set at national level and is employee to a member State, the employer instead set based on Collective Bargaining should cross-check the information herein Agreements. Consequently, in these with specialized consultants or lawyers in countries, the minimum wage can differ the relevant country, including making a based on industry, position, occupation, check as to whether there have been any age, etc. recent changes to the domestic legislation Sweden is the only member state which of the member state concerned. has no legal minimum wage requirement for EU nationals.
20 out of 31 countries under analysis have a national minimum wage, while Sweden is the only member state which has no legal minimum wage requirement for EU nationals.
9 Minimum wage requirements within Europe in the context of posting of workers Countries where the minimum wage is set at national level: Bulgaria, Croatia, Czech Republic, Estonia, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, United Kingdom. Countries where the minimum wage is set under Collective Bargaining Agreements: Austria, Belgium, Cyprus, Denmark, Finland, Greece, Iceland, Italy, Norway, Switzerland. Countries where there is no minimum wage: Sweden.
In the 20 countries that have a minimum wage established at national level, it varies between EUR 235 per month in Bulgaria and EUR 1,999 per month in Luxembourg.
Minimum wage applicable to blue collars (EUR)
1999 1772 1776 1469 1480 1552
805 679 708 557 380 380 407 409 435 435 458 470 235 323
All 20 countries analyzed have registered increases in the minimum wage in 2017 compared to 2016.
Minimum wage applicable in 2017 compared to 2016 (EUR) 2500
2000
1500
1000
500
0
2016 2017
11 Minimum wage requirements within Europe in the context of posting of workers All 20 countries that have a minimum wage established at national level have registered an increase in the level of the minimum statutory wage in 2017 compared to 2016.
How frequently does the minimum wage in the country of posting and adjust the salary change? accordingly. Frequent changes to the minimum wage can Even for the countries which have fixed have an important impact upon employers. national minimum wages, this can change. Changes directly influence the costs of the Generally the minimum wage changes employer which is making the posting. The periodically (usually once a year) but in certain employer has to continuously be aware of cases it can also change during the course of changes to the minimum wage requirements a year.
Minimum wage levels 2015 to 2017
Level of the statutory Increase Country Rate Currency minimum wage 2016-2017 2015 2016 2017 Bulgaria Monthly rate BGN 380 420 460 9.52% Croatia Monthly rate HRK 3029.55 3120 3276 5.00% Czech Republic Monthly rate CZK 9200 9900 11000 11.11% Estonia Monthly rate EUR 390 430 470 9.30% France Monthly rate EUR 1457.52 1466.65 1480 0.91% Germany Hourly rate EUR 8.5 8.84 4% Hungary Monthly rate HUF 105000 1110 0 0 127500 14.86% Ireland Hourly rate EUR 8.65 9.15 9.25 1.09% Latvia Monthly rate EUR 360 370 380 2.70% Lithuania Monthly rate EUR 325 350 380 8.57% Luxembourg Monthly rate EUR 1922.96 1998.59 3.93% Malta Weekly rate EUR 166.26 168.01 169.76 1.04% The Netherlands Monthly rate EUR 1507.8 1524.6 1551.6 1.77% Poland Monthly rate PLN 1750 1850 2000 8.11% Portugal Monthly rate EUR 505 530 557 5.09% Romania Monthly rate RON 1050 1250 1450 16.00% Slovakia Monthly rate EUR 380 405 435 7.41% Slovenia Monthly rate EUR 790.73 790.73 804.96 1.80% Spain Monthly rate EUR 648.6 655.2 707.6 8.00% UK Hourly rate GBP 6.7 7. 2 7. 5 4.17% Is there any difference between blue collars workers, France has the highest minimum and highly-skilled workers? wage (EUR 4.486 per month), whereas Luxembourg has the highest level which Some countries have a national minimum applies to all workers. wage which varies between blue-collar and highly-skilled workers. For highly-skilled
Level of minimum wage (EUR) 5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
-
Blue collars Highly skilled (blue card)
13 Minimum wage requirements within Europe in the context of posting of workers Is the minimum wage gross or net? For the purpose of this comparison, the following general assumptions were made: The national minimum wage is set as a fixed amount, either as a monthly or an hourly rate. • The employee is assigned to the host As a general rule, the national minimum wage country for a period of one year. is the gross amount before income tax and • The employee is single (no family social security contributions, although this can members remaining in the home country sometimes differ from country to country. or accompanying him/her to the host A high level comparison between the member country). states has been prepared, using the applicable • The employee is covered under the social gross minimum wage, from the following security system in the host country. perspectives: • The employee has a standard • The tax cost borne by the employee remuneration package, without any (generally income tax and employee’s additional benefits in cash or in kind. mandatory social security contributions, less any tax credits/reliefs available). • The employee works 100% of his/her time in the host country. • The net salary of the employee. The comparison has been prepared for • The tax cost borne by the employer statistical purposes only, in order to present (employer’s social security contributions). comparative figures applicable within the EU This comparison was prepared based on the in relation to the minimum wage required by statutory gross minimum wage (for countries each EU member state and the results of this with a statutory wage set by law) and on calculation should be treated as such. It is the minimum wage applicable for a certain thus recommended that, prior to posting an industry (for countries where collective employee to a member state, the employer bargaining agreements are applicable in this should cross-check the calculation with respect). specialized consultants in the relevant country.
Structure of costs for the employer in order to grant the minimum wage to its employees 7000
6000
5000
4000
3000
2000
1000
0 UK Italy Spain Malta France Cyprus Poland Ireland Austria Greece Iceland Croatia Estonia Finland Norway Sweden Belgium Bulgaria Slovakia Slovenia Hungary Portugal Romania Denmark Germany Lithuania Switzerland Luxembourg Czech Republic The Netherlands
Net wage Employee's tax cost Employer's social contributions
What is the effective tax rate applicable to the minimum wage? The effective tax rate1 applicable to the minimum wage used in the member states is the lowest in the UK (17.15%). In the opposite corner, France has the highest effective tax rate, raising the employer’s effective tax cost for the minimum wage to 87.59%.
Effective tax rate 100.00% 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% UK Italy Malta Spain Ireland Austria France Poland Cyprus Croatia Iceland Greece Finland Estonia Norway Sweden Belgium Bulgaria Portugal Hungary Slovakia Slovenia Romania Denmark Lithuania Germany Switzerland Luxembourg Czech Republic The Netherlands The What criteria does the minimum wage depend upon? In some countries, including some which have a national minimum wage, the level of the minimum wage depends upon certain factors.
Professional Occupation Education experience
Age Industry Other
Where an employer intends to post employees to these countries, more thorough research is required to find out the appropriate minimum wage requirement applicable to the specific activity to be carried out by the posted employee.
1. The effective tax rate has been calculated as the (total cost for the employer – net wage) / gross wage, where the total cost for the employer includes gross wage and employer’s social security contributions.
15 Minimum wage requirements within Europe in the context of posting of workers What can be included in the minimum Of course, the above list can go on, with wage? many more similar questions. The posting employer will also have to deal with issues At first glance, complying with a minimum relating to its country’s domestic legislation, wage requirement does not appear to be as well as internal policy (where appropriate), a complicated issue. Once the level of the such as: minimum wage in the country where the posting takes place is known, all the employer • An increase in salary to meet the has to do is make sure that level is reached. minimum wage in the posting country That might sound simple. However the could lead to employment law practical difficulties and the challenges lie in implications in the home country (e.g. understanding how the minimum wage is what happens upon termination of the determined. The following questions may assignment, and can the base salary be come up in such cases: decreased back to the home-country level after repatriation?). • Would a salary raise be enough if the employee does not earn enough income • How can a different increase in salary for in the home country to meet the level two assignees holding the same position of the minimum wage in the posting be justified, when staff are posted to two country? different countries with different levels of minimum wage (e.g. assignment to • Can the posted employee be granted Romania and assignment to Germany). an assignment allowance on top of the home-country base salary to reach the The Directive clearly states that allowances minimum wage requirement in the specific to the posting are to be considered country of posting? part of the minimum wage, unless they are paid to reimburse expenditure on travel, board • Would a bonus be sufficient? and lodging. Bearing this in mind, the country- • What about per-diems? by-country section of the report includes information on which salary items can be • Can transport and accommodation considered as part of the minimum wage in allowances be considered part of the accordance with the domestic legislation of minimum wage? each country.
Types of payments which have been analysed as to whether they could be considered as part of the minimum wage:
Cost of living allowance Per diem allowance Amount paid by employers to protect Daily allowance meant to cover food and assignees while on assignment from incidental costs while travelling in connection increased costs of goods and services in the with one’s work or being employed at a host location as compared to those in the distance from one’s home. home country
Bonuses Foreign service premiums Additional compensation given to an Assignment-related allowance. employee in the home country above the normal wage. Have all member states transposed the transposing the new Directive by member new Directive into their legislation? states was 18 June 2016. At the date of issuance of this report (February 2017), not On 15 May 2014, Directive 67/2014/EU all EU member states have implemented this was issued, modifying the 1996 Posting Directive into their local legislation. of Workers Directive. The deadline for
Status of transposing Directive 67/2014/EU into the local legislation of each member state
EU Directive 67/2014 has been transposed into domestic legislation
EU Directive 67/2014 was not transposed into domestic legislation until February 2017
17 Minimum wage requirements within Europe in the context of posting of workers Section 3 Country-by-country report
Austria does not have a minimum Bekämpfungsgesetz” – “LSD-BG”). wage set by law, as there is no The LSD-BG is also applicable for specific legislation relating to a employees assigned or hired-out minimum wage requirement. from foreign countries to Austria However, collective bargaining as well as for employees of foreign agreements set a minimum employers. In these cases, the standard. The minimum wage in following Austrian conditions have to the bargaining agreements changes be met: annually. Every year there is a • Minimum wage rates. percentile increase of the minimum wage. Some industries raise the • Holiday entitlements. minimum wage at the beginning • Working time provisions. of the year, while others change it during the year (e.g. 1 November). • Notification obligations. Austria The minimum wage is determined • Obligation to hold certain based on industry (e.g. retail, documents and present them if construction, metal, print and required paper, and service industries) The above mentioned provisions and on the occupation of the are applicable for any kind of activity employee (depending on the level carried out in Austria. However there Collective bargaining of qualification of an employee, the are exemptions (“list of exceptional employer has to assign a rating at agreements set a minimum cases”) for certain short-term, small- the beginning of the employment). scale activities in Austria which are standard wage in Austria, The maximum legal hours must not not considered to be an assignment based on industry and on the exceed 10 per day and 50 per week. or hiring-out of employees, if the occupation of the employee. In terms of how the minimum wage work carried out does not generate is determined, starting from 2015, competitive distortions in Austria. every foreign employee who works Employees hired-out to Austria are in Austria has been entitled to obtain entitled to reasonable payment the minimum wage according to the which is normal for the respective applicable bargaining agreement. area. The remuneration is Austria includes foreign service considered to be reasonable, if it premiums and bonuses as part of corresponds with the collectively the minimum wage. agreed remuneration or the legally In the course of amendment established payment received of (in particular) trans-border by comparable employees for measures to combat wage and comparable work in the same social dumping, Directive 67/2014/ company. EU was implemented and came into force starting from 1 January 2017 in the form of a special Law against Wage and Social Dumping (“Lohn- und Sozialdumping-
19 Minimum wage requirements within Europe in the context of posting of workers Furthermore, foreign employees are entitled to The minimum wage requirement covers, in particular, allowances such as Christmas bonus, holiday allowance the following remuneration components: and overtime premiums. These allowances are only • Basic salary/basic wage. granted if the bargaining agreement regulates it. Otherwise the employee is not entitled to them. • Overtime payments; Generally (unless otherwise provided for by the • Bonuses; collective bargaining agreement) these allowances are granted on the basis of the monthly wage. In the case of • Surcharges; supplements, other allowances, payment for overtime • Special payments; hours, these also have to be included in the basis of the calculation. On the other hand, expense allowances (e.g. • Idle time compensation. per-diems) cannot be included in the minimum wage. From an administrative perspective, for postings to If national Austrian provisions provide entitlement to Austria, the home country employer must notify the special payments, monthly pro-rata portions must be posting to the relevant Austrian authorities before the paid out to the employee. Since 1 January 2017 this has beginning of work. The home-country employer must also applied to the supply of temporary workers. submit Form ZKO3 concerning postings and Form ZKO4 for personnel leasing cases. The only exemptions from the minimum wage requirement are remuneration components which are The Federal Ministry of Finance has established a special non-contributory according to Section 49 para 3 of the coordinating office called “Zentrale Koordinationsstelle Austrian General Social Insurance Act (Allgemeines des Bundesministeriums für Finanzen” where cross- Sozialversicherungsgesetz - ASVG), as well as European postings must be notified. In the case of remuneration components which are only due according non-compliance with the above requirements, penalties to the individual employment contract or company vary as follows: agreements.
Offence Penalties starting 1.1.2017
in case of an assignment: € 1,000 – € 10,000 per employee Not keeping the A1 form available in case of recurrence: € 2,000 – € 20,000 per employee Not keeping the ZKO 3/ZKO 4 form available at the in case of hiring-out of employees: working place € 500 – € 5,000 per employee in case of recurrence: € 1,000 – € 10,000 per employee
up to 3 employees: € 1,000 – € 10,000 per employee in case of recurrence: € 2,000 – € 20,000 per employee Not keeping the wage/salary documents available more than 3 employees: € 2,000 – € 20,000 per employee in case of recurrence: € 4,000 – € 50,000 per employee
up to 3 employees: € 1,000 – € 10,000 per employee in case of recurrence: € 2,000 – € 20,000 per employee Undercutting minimum rates of pay more than 3 employees: € 2,000 – € 20,000 per employee in case of recurrence: € 4,000 – € 50,000 per employee
Under certain conditions, it is possible that the employer may even be forbidden from carrying out activity in Austria for up to five years In Belgium, minimum wages are set For non-compliance with the by collective bargaining agreements notification requirements, the (CBAs), which means that every employer will be charged with a joint committee (JC) has a different criminal offence, which carries a minimum wage. Consequently, the prison sentence of 6 months to 3 change of the level of the minimum years and/or a criminal fine between wage and the expected date for the EUR 3,600 and EUR 36,000. change depend on the applicable Alternatively, an administrative CBA. A system of automatic wage penalty applies, varying between indexation also exists in Belgium, EUR 1,800 and EUR 18,000 per which is set by the CBA but it is individual. imposed by law. If, in the absence of the employer, The minimum wage is determined the Belgian entity fails to report a as a fixed amount, depending on posted employee who is working Belgium occupation and industry. or performing services at the entity’s premises, the Belgian host As a rule, only the fixed base salary entity is liable to a criminal fine of is considered part of the minimum between EUR 600 and EUR 6,000 wage. All additional advantages or per individual or an administrative allowances (such as per-diems, cost penalty of between EUR 300 and of living allowances, bonuses or EUR 3,000 per individual. The same foreign service premiums, etc.) are sanctions apply for an assigned not included in the minimum wage. self-employed worker who has not For non-compliance with the duly reported his/her activities via As a rule, only the fixed base minimum wage requirements (or Limosa. non-payment of wages) a criminal salary is considered part of The maximum legal working hours fine of EUR 300 to EUR 3,000 or in Belgium are 8 hours per day and the minimum wage. an administrative fine of EUR 150 38 hours per week (40h if 12 rest to EUR 1,500 per individual may be days are granted). imposed. Belgium implemented Directive Regarding assignments in Belgium 67/2014/EC by the Act of 11 where the employee remains December 2016 (in force since 30 subject to the home-country social December 2016). This comprises security regime, the home-country a list of criteria which enable the employer must formally notify the authorities to determine whether a Belgian social security authorities posting is a temporary assignment, prior to the individual starting his or gives the authorities greater powers her activity in Belgium (by means of to investigate assignments, as well a so-called “Limosa declaration”). as providing for joint liability of the If the home country employer does employer and receiving company not meet this obligation, the host and cross-border execution of entity should in principle take care penalties. Prior to the Directive, of it. Belgium already had some rules on social dumping and related penalties.
Blue collar workers White collar workers JC 100: supplemen- JC 200: supplementary Highly skilled tary joint committee joint committee for white (blue card) for blue collar work- collar workers (starters) ers (starters)
EUR 1,564.62 Class A: EUR 1,670.21 EUR Class B: EUR 1,739.80 51,882(gross per Class C: EUR 1764.41 year) Class D: EUR 1,903.24
21 Minimum wage requirements within Europe in the context of posting of workers Bulgaria has a minimum wage set In Bulgaria, the maximum legal at national level. From January 2017 working hours are 8 hours/day, the minimum wage is BGN 460 equivalent to 40 hours/week. per month (approximately EUR Directive 67/2014/EU has been 235), compared to BGN 420/month transposed into local legislation and (approximately EUR 214) in 2016. employers have until 8 February The minimum wage is revised on an 2017 to bring their internal practices annual basis. into line with the new rules. The minimum wage requirement in Bulgaria is fixed regardless of the industry, age or occupation. However, the minimum insurable income varies depending on the occupation and is generally higher Bulgaria than the minimum wage.
The minimum wage requirement in Bulgaria is fixed regardless of the industry, age or occupation.
All employees who work in No formal notification has to be Croatia, irrespective of the industry, submitted to the local authorities in occupation or age, are entitled to a the case of postings to Croatia as an minimum wage in accordance with automatic exchange of information the Croatian Minimum Wage Act. exists between the Croatian Ministry of Internal Affairs and the From January 2017 the minimum Croatian Tax Authorities. wage in Croatia is HRK 3,276 per month (the equivalent of For non-compliance with the above approximately EUR 433). During minimum wage requirements, fines, 2016 the minimum wage was set which range from HRK 60,000 at HRK 3,120 (the equivalent of (approx. EUR. 7,926) to HRK 100,000 approximately EUR 412). However (approx. EUR 13,210) for the this is updated annually. employer and HRK 7,000 (EUR 925) to HRK 10,000 (approx. EUR 1,321) In certain cases, the applicable wage for the employee can be imposed. Croatia can be lower than the minimum wage set by the Croatian Minimum The maximum legal working hours Wage Act, if that wage is part of a are 40 per week. Any additional collective bargaining agreement. work is considered overtime. However, even in such cases, the Directive 67/2014/EU has not yet wage cannot be lower than 95% In certain cases, the been implemented into Croatian of the minimum wage set by the legislation. However, based on the applicable wage can be lower Croatian Minimum Wage Act - i.e. official action plan for legislation HRK 3.112.20 (the equivalent of than the minimum wage set changes in 2017, the Directive should approximately EUR 411). by the Croatian Minimum be implemented by two specific Assignment allowances (e.g. per laws. The draft laws implementing Wage Act. diems, cost of living allowances, the Directive are planned to be sent Foreign Service premiums, etc.) to Croatian Government for approval cannot be considered part of the in the first quarter of 2017. minimum wage. Usually, the level of the minimum Directive 67/2014/EU as regards the wage in Cyprus changes annually. posting of workers in the framework However, since 1 April 2012 no of the provision of services has changes have occurred and there not been transposed into Cyprus are no indications as to when domestic legislation yet. changes, if any, are expected. The Directive 96/71/EC is currently minimum wage is determined as transposed in Cyprus legislation a fixed amount or as an hourly rate and is still the applicable law for depending on occupation. identifying a genuine posting and Assignment allowances such as per preventing abuse and circumvention diems, cost of living allowances, of the procedure for the posting of foreign services premiums, and workers to Cyprus as well as for bonuses are not included in the any administrative requirements minimum wage. However, the and control measures (section 8-10 Cyprus minimum wage may include N.137(I)2002). commissions. The Cyprus Department of Labour Cyprus has a legal limit of 8 working have stated that Directive 67/2014/ hours per day and 48 working hours EU will be transposed into Cyprus per week. legislation in the near future.
In the case of postings to the Czech Republic, no formal notification has to be submitted to the local authorities.
The Czech Republic has a minimum In terms of how the minimum wage wage requirement set by law. The is determined, with the exception minimum wage is determined as a of wages and salaries for overtime, fixed amount and as an hourly rate. extra pay for work on public holidays, The minimum wage is revised by night work, payment for work in a the Government generally in January difficult working environment and of each year. work on Saturdays and Sundays all wage components can be The current level of the minimum considered part of the minimum wage is applicable as from 1 January wage. However, the minimum wage 2017. The minimum wage per hour does not include benefits provided is CZK 66.00 (approx. EUR 2.44), in connection with employment, while the minimum wage per month especially wage compensation, is CZK 11,000 (approx. EUR 407.11), severance pay, travel expenses, or which is applicable to both blue- remuneration for work readiness. Czech Republic collar and highly-skilled workers. The minimum wage for disabled workers In terms of administrative is CZK 11,000 (approx. EUR 407.11). requirements, in the case of postings to the Czech Republic, During 2016 the minimum wage per no formal notification has to be hour was CZK 58.70 (approx. EUR submitted to the local authorities. 2.15), while the minimum wage However, penalties for non- per month was CZK 9,900 (approx. compliance with the minimum wage EUR 363). The minimum wage for requirement can be up to CZK 2 mil. disabled-workers for 2016 was CZK (approx. EUR 74,000). 9,300/month (approx. EUR 341) for 40 working hours per week or CZK Directive 67/2014/EU is not 55.10 per hour (approx. EUR 2.02). expected to be transposed into The maximum number of legal Czech legislation until July 2017. working hours in the Czech Republic is 40 per week.
23 Minimum wage requirements within Europe in the context of posting of workers In Denmark there is no statutory been seconded, is a student at an minimum wage, and no provision on educational institution accredited or minimum wages is included in the financed by public authorities, and she/ Danish Secondment/Posting Act, he is able to support him/herself during which implements the EU Posting the period of residence in Denmark of Workers Directive. Generally, this or has sufficient income or means so means that if an EU employee is that she/he is not expected to become posted by the home-country employer a burden on the public authorities. to deliver services to a Danish Separately, there is a general obligation company in Denmark, no minimum for the foreign service provider (home wage will apply. company) to register the business and the seconded employees in the Danish However, in Denmark, pay and working RUT register. In the case of non- conditions are typically laid down by compliance with the RUT, registration collective bargaining agreements fines may be imposed. concluded between trade unions Denmark and employers’ organizations. This Danish legislation includes different system of labour market regulation mandatory provisions on the maximum is referred to as the Danish Model. legal working time. The legislation The collective bargaining agreements states that the number of working include provisions on the minimum hours must not exceed 48 per week wage and other working conditions. on average (including overtime) within These Danish collective bargaining a period of 4 months. Moreover, agreements are not of general employees are entitled to a break if application and will generally not the number of daily working hours apply if an EU employee is seconded exceeds six. to Denmark as mentioned above. With regard to night work, employees However, the EU employer may may only work 8 hours per day on need to observe collective bargaining average in a period of 4 months. As requirements from the relevant a general rule in Danish legislation, Danish unions in the branch. As a the working hours must be arranged consequence, the Danish company in such a way that the employees receiving the services from the foreign have a period of rest of at least 11 employee may - due to the company’s continuous hours within each period of collective bargaining agreement(s), if If any collective bargaining 24 hours. Danish collective bargaining the company is subject to any – be agreements also include different agreements apply or must be required to ensure or be encouraged provisions relating to working hours. to ensure that minimum wage and followed, these are typically Collective bargaining agreements working conditions are provided to typically state that the normal working re-negotiated every third year posted employees as well. and this may involve a change hours are 37 per week. If any collective bargaining agreements In June 2016, Denmark enacted in the minimum salary. apply or must be followed, these are legislation transposing into Danish typically renegotiated every third year law Directive 67/2014/EU concerning and this may involve a change in the secondments of employees as part minimum salary. The minimum wage of the free exchange of services set by the collective agreements in the European Union (EU). The may vary depending on occupation, Danish Labour Market Fund for industry, length of service, education, Posted Workers (Arbejdsmarkedets skills, experience, age, etc. Fond for Udstationerede or “AFU”) The minimum wage includes the is established as a result of the base salary and any mandatory implementation of the Directive. allowances and fees stated in AFU is an attempt to establish the the relevant collective bargaining rights of posted workers to receive agreement. However, it will depend on correct wages from their employers the content of the specific collective while working in Denmark. AFU is a bargaining agreement. In the case of joint fund financed by both Danish and non-compliance with the minimum foreign employer contributions. Aall wage requirements, the penalties foreign enterprises registered in the will depend on the relevant collective Register of Foreign Service Providers bargaining agreement. (RUT) must pay contributions to AFU. An EU citizen/ EEA national is eligible The aim of AFU is to make sure that for a registration certificate, if she/he: is posted workers receive correct wages in paid employment, is self-employed, if the enterprise fails to meet its wage provides services in Denmark, is a obligations. retired worker, retired self-employed person or service provider, has Estonia has a national minimum gross salary, as published in the latest edition wage requirement. From 2017 the level of Statistics Estonia. (The new annual of the minimum gross wage applicable average gross monthly salary will be to blue collar workers and other EU published in March 2017). nationals for full time employment is set The maximum legal working hours are at EUR 470 per month. This represents 8 hours per day / 40 hours per week. an increase from EUR 430 per month Besides the regular salary received during which was the level during 2016. an assignment, per diems, cost of living The current minimum gross wage for allowances, foreign service premiums highly skilled workers, whether they are and bonuses are not considered as part EU or non-EU citizens who are holders of of the minimum wage. the European Union blue card, is currently Estonia has implemented Directive EUR 1,598 per month. However, an 67/2014/EU and changed the law of employer is required to pay a holder of working conditions of employees posted an EU Blue Card at least the equivalent to Estonia. The Working Conditions of 1.5 times the annual average gross of Employees Posted to Estonia Act Estonia monthly salary, as published in the latest says that employers must ensure that edition of Statistics Estonia. (The new the working conditions, which are annual average gross monthly salary will established in Estonia are applied to be published in March 2017). a posted employee. In addition The In the following cases, the minimum Occupational Health and Safety Act must gross wage for an EU Blue Card holder be applied to a posted employee (even currently may be EUR 1,321. However an when it is less favorable to the posted employer is required to pay a foreigner employee than the provisions of a foreign at least the equivalent of 1.24 times the law). The employer of a posted annual average gross monthly salary, as The employer of a posted employee published in the latest edition of Statistics employee must provide the must provide the Labour Inspectorate Estonia (the new annual average gross with information concerning the posting, Labour Inspectorate with monthly salary will be published in March but no later than on the day the posted 2017): information concerning the employee commences work in Estonia. posting, but no later than on • Employment as a top specialist or a If an employee posted to Estonia junior administrator. performs work which is connected the day the posted employee with construction work (involving the • Employment as a top specialist in construction, renovation, maintenance, commences work in Estonia. natural or technical science. alteration or demolition of buildings, • Employment as a top specialist in including excavation work, earthmoving the health service. work, actual construction work, or the assembly and demolition, connection • Employment as a specialist in and installation, modification, renovation, pedagogics. repair, disassembly, demolition, • Employment as a specialist in maintenance, painting, cleaning or repair business or administration. of prefabricated components) and the employer does not pay the employee • Employment as a specialist in wages, the wages must be paid by the information or communication, or person who ordered the service from • Employment as a specialist in the the employer of the posted employee. legal, cultural or social sphere. A posted employee has the right of recourse to a labour dispute resolution The current minimum gross wage for body for the protection of his/her rights. a foreigner working as a top specialist, with appropriate professional training or In Estonia the Labour Inspectorate is experience for employment in the field, the implementing authority for Directive is EUR 2,130 per month. However, the 96/71/EC of the European Parliament employer is required to pay remuneration and of the Council concerning the to a foreigner working as a top specialist posting of workers in the framework of the equivalent of at least 2 times the the provision of services and Directive annual average gross monthly salary, as 67/2014/EU of the European Parliament published in the latest edition of Statistics and of the Council on the enforcement Estonia. (The new annual average gross of Directive 96/71/EC concerning the monthly salary will be published in March posting of workers in the framework of 2017). the provision of services. The Labour Inspectorate must make information The minimum gross wage for a foreigner available and reply to reasoned requests working as an expert, adviser, consultant for information concerning Acts, other or skilled worker is EUR 1,065 per month. legislation and extended collective However, an employer is required to pay agreements that apply to a posted a foreign worker at least the equivalent employee. of the annual average gross monthly
25 Minimum wage requirements within Europe in the context of posting of workers Finland does not have a minimum The penalty system has radically wage set at national level. However, changed. The previous criminal the minimum wage requirement sanctions have been replaced by is determined under the collective the new administrative negligence agreements concluded between the fee to be applied. The amount of Finnish employers’ unions and trade the negligence fee ranges from unions. EUR 1,000 to EUR 10,000 and is imposed by the occupational safety The minimum wage is determined and health authority. for different industry/occupational sectors based on the employee’s Under cross-border administrative professional skills, experience or cooperation a relevant authority other types of information such as of another EU member state the geographical position of the or the European Commission workplace. may send to a relevant Finnish authority a reasoned request for Finland There are also many industry/ information or to perform checks, occupational sectors without any inspections or investigations. binding collective agreement, which Finnish authorities may provide in practice means that there are no information to this authority or to minimum wage rules applicable. the European Commission for the In these situations, the wage level purpose of monitoring compliance should however, according to law, with legislation on posted workers, be the normal and reasonable wage notwithstanding confidentiality level, which is normally applied in provisions and other limitations similar work positions. In the case of assignments on the right to information. When to Finland, the employer The maximum legal working hours providing confidential information, in Finland are 8 hours per day or the Finnish authority must request might be required to submit a the equivalent of 40 hours per that the information be kept notification to the trade union week. However, different rules confidential. included e.g. in the Finnish collective A Finnish authority may also send about the use of foreign bargaining agreements might apply to an authority of another EU employees. for overtime work. member state a reasoned request In terms of administrative for information or to perform checks, requirements, in the case of inspections or investigations. For the assignments to Finland, the new purpose of monitoring compliance Act on Posting Workers entered with legislation on posted workers, into force on 18 June 2016 (except a Finnish authority may also request section 7 on the notification information that is confidential under obligation which is due to enter the legislation of Finland or another into force later this year). Directive EU member state or that is subject 67/2014/EU was implemented by to some other limitation on obtaining the aforementioned act. The main information. If so requested by changes to the previous act are an authority of another member mentioned below. state, the Finnish authority must keep confidential any confidential The posting undertaking is information it receives. required to submit a notification to the occupational safety and As in the previous Act on Posted health authority about the posting Workers, the posting undertaking of workers to Finland under an must have a representative in agreement on cross-border service Finland whom the posted worker provision. The contractor must and the authorities can contact at ensure that the posting undertaking all times during the posting. The submits the aforementioned representative may be a legal entity notification. However, the or an individual. aforementioned notification requirement is not yet in force, but is due to enter into force later this year. The current minimum wage level is the employer like travel expenses, applicable from 1 January 2017 and accommodation or meals, are not it can change once or twice a year, taken into account in the minimum usually in January and/or July. wage and cannot be supported by the employee. Minimum wages in France are defined: Directive 67/2014/EU concerning the posting of workers was 1. By legal provisions (there is transposed into French domestic a fixed amount for full time law in 2015. In this regard, prior employees working 35 hours to the beginning of a temporary per week and an hourly rate, for assignment to France, a specific part time employees). notification (déclaration préalable 2. By collective bargaining de détachement) should be sent agreements (CBAs). There by the home-country employer to are various CBAs, since there the French labour inspectorate. The France is usually one per industry. A home-country employer must also CBA applies mandatorily to appoint a representative in France. a company falling within its The French host company should scope. The CBA defines the verify that these requirements have minimum wages according to been fulfilled. the employee’s position within In the case of non-compliance with the company. the above requirements French From January 2017 the legal regulations provide for different minimum wage is EUR 1,480.27 penalties depending of the type of gross per month for a full time legal failure. They range from a fine employee working 35 hours per to criminal prosecution. The foreign week. During July–December 2016 company/French host company may the legal minimum wage was EUR also have to pay the employees 1,466.65 gross per month for a full additional amounts to respect the time employee working 35 hours minimum wage. Minimum wages in France per week. Hours worked above 35 Recent regulations have reinforced are defined as a fixed per week are regarded as overtime the penalties for non-compliance and should lead to additional amount or through collective with legal requirements when compensation. bargaining agreements which posting foreign employees to To be entitled to a European Blue France. are usually set per industry. Card, an employee should earn Generally speaking, the legal at least EUR 53,836.5 per year. working time in France is 35 hours/ According to French regulations, week. The maximum daily legal assignment related allowances can working time is 10 hours. The be part of the minimum wage (i.e. maximum working time/week is COLA, foreign service premiums, 48 hours. However, the average bonuses). However, the amounts weekly working time cannot exceed paid to the assignee to compensate 44 hours over any period of 12 for expenses actually borne, as well consecutive weeks. as the expenses directly borne by
27 Minimum wage requirements within Europe in the context of posting of workers Germany has a minimum wage employees, but not less than the requirement set at national level. minimum wage requirements. The next adjustment is due to take effect On 1 January 2015, Germany’s law from 1 January 2018. on the statutory minimum wage became effective. Consequently, In Germany, the standard working a general minimum wage hours are 8 hours/day, or the requirement has been implemented equivalent of 48 hours/six days per for all occupations and affects all working week. individuals working in Germany Besides the regular salary received regardless of their nationality and during an assignment, any payment the location of the employer. which is perceived as an equivalent The current statutory minimum for the normal performance of wage since 1 January 2017 services, but not for rewarding is EUR 8.84/working hour. In special purposes can be considered Germany addition, there are minimum as part of the minimum wage. wage requirements in collective Consequently, if bonus payments bargaining agreements which are fulfil this criterion, they can only be often higher than the nation-wide considered in the month in which minimum wage requirements and they are paid out. which, however, depend on the In terms of administrative industry and occupational group. In For third country employees requirements, in the case of addition, there are minimum wage assignments to Germany, there is a who need a work permit for requirements for agency workers formal notification which has to be which are as follows: Germany and apply for a Blue submitted to the Customs authority Card, the minimum wage • By the end of February 2017: in the case of employment in certain requirement is EUR 50,800 EUR 8.84/working hour in industries as well as in the case of the Eastern provinces and agency work. Generally, the home gross per year (2017) or EUR EUR 9.00/working hour in the employer has to file this notification 39,624 gross per year (2017) remaining provinces prior to the performance of work. However in the case of agency work • In the period between March for selected occupational from foreign lessors, the obligation and December 2017: EUR 8.91/ falls on the lessee of leased groups. working hour in the Eastern employees. provinces and EUR 9.23/ working hour in the remaining In the case of non-compliance with provinces the minimum wage or notification requirements there are certain There is no differentiation between penalties which are applicable: blue collar workers and highly qualified employees. However, • For non-payment or delayed for third country employees who payment of the minimum wage need a work permit for Germany – up to EUR 500,000 and apply for a Blue Card, the • For non-compliance with the minimum wage requirement is notification obligations – up to EUR 50,800 gross per year (2017) EUR 30,000. or EUR 39,624 gross per year (2017) for selected occupational groups Further penalties such as withdrawal (IT-specialists, doctors, engineers of business license are possible etc.). For any other third country depending on the degree of severity nationals who need a work permit, of the offence. but do not qualify for a Blue Card, Germany has transposed Directive the requirement is for their wages is 67/2014/EU into its local legislation. to be at least as high as the wages for comparable German or EU Greece has a national minimum Besides the regular salary received wage requirement. Before during an assignment, it seems that Greece’s recourse to International per diems, cost of living allowances, Monetary Fund (IMF) and European foreign service premiums and Commission funding, the minimum bonuses are not considered as part wage used to change on an annual of the minimum wage. In these or bi-annual basis. However, this cases. For assignments especially, no longer applies, and the current caution should be paid to the salary minimum wage is expected to package granted in order to ensure remain unchanged during the period that the Greek minimum wage of Greece’s financial adjustment. requirement is met. Generally, minimum wages depend In terms of administrative on different factors. requirements, in the case of For certain occupations, there assignments to Greece, the home are Sectorial Collective Labour country employer must notify the Greece Agreements providing for the Greek Employment Authorities with minimum wages of the covered respect to the postings prior to the personnel (only a few Sectorial commencement of the activity. For Collective Labour Agreements are non-compliance with the notification currently in force). If the personnel and minimum wage requirements do not fall within any Sectorial the employer could face temporary Collective Labour Agreements, cessation of operations, monetary the minimum wages are provided penalties or even imprisonment in for by the General National CLA/ serious cases. Law 4093/2012 (if the employers In Greece, Presidential Decree are not members of trade unions 101/2016 transposed into Greek participating in the conclusion of the legislation the provisions of the National General Collective Labour Directive 67/2014/EU. The Decree’s Besides the regular Agreements) and depend on status main provisions are as follows: salary received during an (employee or worker), age, prior assignment, per-diems, term of service and/or marital status a) The supervision and (married/ single). control of compliance with the cost of living allowances, appropriate employment rules For example, under the National is vested with the employment foreign service premiums and General Collective Labour authorities together with the Agreements, the minimum monthly bonuses are not part of the police and social security gross salary of a single employee minimum wage. authorities. below the age of 25 with no prior term of service is EUR 510,95 b) The Greek authorities must per month whereas for a married co-operate with the authorities of employee working under similar the other member states to help circumstances the monthly gross them obtain any information or salary is set at EUR 562,05 per assistance needed. month. An employee below the age c) The authorities mentioned of 25 with no prior term of service above under (a) are also provided falling within Law 4093/2012 will with the power to assess be entitled to EUR 510,95 whether whether postings are genuine married or single (no marriage (this assessment is made on allowance is provided in Law the basis of various factors 4093/2012). The above minimum determined in the Decree). gross salary is increased to EUR 586.08 for single employees over d) The contents/details of the age of 25 with no prior term of documents required to be filed by service. the home country employer prior to the commencement of the The minimum wage for employees posting have been broadened. is determined as a fixed amount on a monthly basis, while the minimum e) Provision is also made for wage for workers is determined on the cross border execution of a daily basis. The maximum legal decisions on the imposition of working hours in Greece are 8 hours penalties. per day, or the equivalent of 40 hours per week.
29 Minimum wage requirements within Europe in the context of posting of workers The minimum wage in Hungary The following data are required to normally changes on an annual complete the registration: basis, in January of each year. • The foreign company’s data, The minimum wage is determined • Information relating to the work on a monthly, weekly and hourly activity, basis. An increased minimum wage is applicable to full-time employees • Details of foreign company’s who carry out certain physical work contact person. or work which requires secondary/ The registration must be filed by the higher education. foreign company by no later than As from January 2017 the the employee’s first working day in minimum wage is HUF 127,500 Hungary. (approximately EUR 411), compared Foreign companies (not just with 2016 when it was HUF companies located within the EEA) Hungary 111,000 (approximately EUR are required to apply the following 355). In Hungary only the base rules of the Hungarian Labour Code salary, as established through the to their employment relationships employment contract, may be with the assignee – unless the considered as part of the minimum law applicable for the assignee’s wage. employment is more favourable to In addition, the Hungarian labour the employees than the Hungarian inspectorate may also impose rules: penalties. The maximum legal • Maximum working hours, working time in Hungary is 12 hours per day and 48 hours per week. • Minimum paid annual holidays, Regarding postings to Hungary, • Minimum wage, form T104 must be filed with the • Health, safety and hygiene at Regarding postings to Hungarian tax authority within a work, maximum of 30 calendar days Hungary, form T104 must be from the start of the assignment. • Provisions on non- filed with the Hungarian tax The obligation falls with the host discrimination. authority within a maximum employer with respect only to Prior to the start of posting assignees who have foreign tax of 30 calendar days from the (assignment), the Hungarian residency status and are likely to company must inform the foreign start of the assignment. receive income taxable in Hungary. company about the above described For failure to submit the form, the labour rules applicable in Hungary. Hungarian tax authority may impose a fine of up to HUF 200,000. Furthermore, it is also required to keep and upon request disclose New provisions of the Hungarian to the authorities documentation Act on the Labour Code and the concerning the assignee (e.g.: Act on Labour Inspection entered employment contract, time-sheets, into force in order to introduce proof of payment) during the period into Hungarian legislation the of the employee’s Hungarian posting provisions of Directive 67/2014/EU. (assignment) and for a further 3 This amended legislation imposes year period following the end of the registration and reporting obligation posting (assignment). on companies located within the EEA and posting (assigning) their employee to Hungary in order to provide services. The obligations must be fulfilled electronically (in the Hungarian or in English language) via the labour inspectorate website of the Hungarian Ministry of National Economy. Iceland does not have a minimum The current minimum wage is wage requirement set at national applicable as from 1 May 2015 and it level. is revised when the collective wage agreements are updated. However, there are minimum wage requirements included within Currently, the minimum wage for the various collective bargaining the majority of Icelandic unions is agreements. ISK 260,000 (approximately EUR 2,170). It is expected that the All Icelandic employees must minimum wage will increase as contribute to a union of their choice, follows: each union applying a different minimum wage.
EUR Period ISK Iceland (approximately)
1 May 2016 260,000.00 2,170.00
1 May 2017 280,000.00 2,335.00
1 May 2018 300,000.00 2,500.00
Generally, the minimum wage compensation given to the is applicable to all categories employee) are considered part of of workers, with no difference the minimum wage. between blue collar workers and In terms of administrative highly skilled workers with an EU requirements, in the case of blue card. However, there may be All Icelandic employees must assignments to Iceland, a formal certain differences depending on the notification must be submitted to contribute to a union of their collective agreement that applies. the local authorities by the host choice, each union applying a Iceland has maximum legal working employer. The notification should be different minimum wage. time of 13 hours per working day submitted to the Iceland Registers and 48 hours per week, including within 7 days of the assignee’s overtime. arrival. Besides the regular salary Directive 67/2014/EU has not received during an assignment, been implemented into Iceland’s the Cost of Living allowance and legislation. bonuses (including any additional
31 Minimum wage requirements within Europe in the context of posting of workers Ireland’s minimum wage The minimum wage is stipulated in requirement applicable from 1 the National Minimum Wage Act. January 2017 is EUR 9.25 per hour, a The minimum wage is determined rise from EUR 9.15 applicable during as an hourly rate and is dependent 2016. on the age of the employee (trainee or seniors) as follows:
Age Minimum wage applicable
Under 18 years old 6.48 (70% of the minimum wage)
1st year of employment over the 7.40 (80% of the minimum wage) age of 18
Ireland 2nd year of employment over 8.33 (90% of the minimum wage) the age of 18
The National Minimum Wage Act of structured training or directed also provides sub-minimum rates study that is authorized or approved which apply to employees who are by the employer. The trainee over 18 and are undergoing a course minimum wage rates are as follows:
Stage of the training Minimum wage applicable
1st part of the course 6.94 (75% of national minimum wage)
2nd part of the course 7.40 (80% of national minimum wage) The minimum wage in Ireland is determined as an hourly 3rd part of the course 8.33 (90% of national minimum wage) rate and it depends on the age of the employee. Each part of the course must last at • A new subcontracting liability in least one month and no more than a the construction sector to guard year. against posted workers being paid less than their minimum Ireland considers per-diem, cost entitlements - where a posted of living allowance, foreign service worker in the construction sector premiums and bonuses as being part is not paid the applicable statutory of the minimum wage. rates of pay by their direct In the case of non-compliance with the employer, the contractor one step minimum wage requirements, criminal up the supply chain can also be proceedings, imprisonment or fines held liable; may be imposed. • creation of a right for a posted The maximum average legal working worker to refer a complaint to hours in Ireland are 9.6 hours per day the Director General of the WRC or 48 hours per week. naming both their employer and the contractor one step up as Directive 67/2014/EU was transposed respondents; into law in Ireland on 27 July 2016. The key measures which have been • introduction of a defence of due introduced, as a result of the Irish diligence for the contractor in regulations to implement Directive any claim before the WRC - the 67/2014/EU include: Regulations set out in detail the test or criteria which the • A new requirement on foreign contractor will have to satisfy in service providers when posting order to use this defence. workers to Ireland to notify the Workplace Relations Commission • measures which allow for the (WRC) - they must provide enforcement of cross border information which will allow the financial administrative penalties WRC to monitor posting activity and fines. and ensure compliance with posting rules. Italy does not have a minimum • All new secondments to wage set at national level. However, Italy starting on or after 26 the minimum wage is generally December 2016, should be established by the National notified to the Ministry of Collective Labour Agreements, Labour not less than 24 hours which are updated yearly for each before the secondment is due category of employee. to start, using the appropriate form UNI-DISTACCO on the The minimum wage is determined portal established by the Labour by negotiation between employers Ministry and different unions and depends on the industry, employees’ level, etc. • A registration requirement also applies for those assignments The maximum legal working hours which started on or after 22 in Italy are 8 hours per day or the July 2016 and which were still equivalent of 40 hours per week. ongoing on 26 December 2016. Italy Overtime is allowed up to 8h/ These were required to be week, 250 h/year, followed by a registered retroactively by 26 customised approach in relation to January 2017. the collective agreements, which are based on the employee’s status/ As well as the registration occupation within the company/ requirement, the Legislative Decree district. also imposes recordkeeping requirements and the requirement Besides the regular salary received for the translation of documents into during an assignment, the cost of Italian in order to ensure that the living allowance, foreign service posted workers Directive is being premiums (and reimbursement of enforced and employees seconded certain expenses) are considered as to Italy are being paid at least the part of the salary. minimum salary provided by the Italian legislative Decree 136/2016 Collective National Contract and that has now transposed Directive minimum contractual requirements 67/2014/EU into Italian Law. The law for holiday and working time are provides that: being upheld.
The minimum wage is determined by negotiation between employers and different unions and depends on the industry, employees’ level, etc.
33 Minimum wage requirements within Europe in the context of posting of workers Latvia has a minimum wage Assignment allowances such as requirement in place. The Latvian per-diems, cost of living allowances, Government reviews the minimum foreign service premiums or wage level each year. However this bonuses are not considered as part does not necessarily lead to it being of the minimum wage. increased. Changes in the minimum In the case of assignments to Latvia, wage depend on the economic host employers need to notify the situation in the country. tax authority about all new hired The Latvian minimum wage is employees one day before the a fixed amount of EUR 380 per employee starts working. For non- month (EUR 370 during 2016) and compliance with the minimum wage it does not depend on professional requirement, Latvian employers can expertise, industry or age. The face an administrative penalty of up minimum wage is the lowest salary to EUR 7,000. If the requirement Latvia that all employers must grant to is breached repeatedly within one their employees for work within year, the penalty increases to EUR normal working hours. 14,000. The maximum working time in Latvia is 8 hours per day or 40 hours per week. The Latvian Government reviews the minimum wage yearly, although this does not necessarily lead to an increase. Lithuania has a minimum wage set (equivalent of EUR 2.32 per hour), at national level. which applies to EU and non-EU nationals, both blue collar workers As from July 2016 the minimum and highly skilled workers. wage is EUR 380 per month
Monthly amount Hourly amount Level of the employee EUR EUR
Blue collar 380 2.32
Highly skilled (blue card) 380 2.32
Lithuania There are no general rules notification must be submitted no established in Lithuania to change or later than one working day prior review the minimum wage regularly, to the start date of activity of the e.g. annually or in January each year. assignees. Non-compliance with This is basically a political issue so the above mentioned requirement it is difficult to predict the particular can lead to various penalties for the upcoming changes in the future. posting employer. Besides the regular salary received If the stay of an assignee in during an assignment, per-diems are Lithuania exceeds 3 months during considered as part of the minimum a 6 month period, he/she needs to wage. obtain a certificate confirming the right to reside in Lithuania from the The maximum working time in migration authorities (applicable Lithuania is 8 hours per day or for EU/EEA/Swiss citizens only). the equivalent of 40 hours per Once the certificate is obtained, week. Various exceptions might the assignee will also need to be applicable in accordance declare his/her residence place with specific laws, government at the municipality. There are no resolutions and collective specific deadlines for migration agreements. The maximum working obligations. However, the necessary hours, including overtime, must not certificates (registrations) must be exceed 48 hours per 7 working days. obtained (completed) when relevant A new Lithuanian Labour code is obligations arise. expected to come into force from 1 July 2017 (or possibly at a later date) Directive 67/2014/EU was which could bring some changes implemented in Lithuania on 28 (e.g. to maximum working time, June 2016. As mentioned above, vacations etc.). the new Lithuanian Labour code should come into force starting from An employer who posts employees 1 July 2017 which could bring some to Lithuania is required to notify changes. (e.g. to maximum working the Lithuanian labour authorities time, vacations etc.). with respect to the postings. The
35 Minimum wage requirements within Europe in the context of posting of workers Luxembourg has a minimum wage to how often the update takes place. requirement. As from January 2017, The minimum wage is determined the minimum wage is EUR 1.998.59 as a fixed amount and depends on per month. However this is updated the worker’s age and skills. periodically, with no specific rule as
Age Skill Minimum wage (EUR)
1,498.94 (75% of the 15-16 Blue collar standard minimum wage)
1,598.87 (80% of the 17-18 Blue collar standard minimum wage) Luxembourg 1,998.59 (100% of the Over 18 Blue collar standard minimum wage)
2,398.30 (120% of the Over 18 Highly skilled standard minimum wage) Per diems, cost of living allowances and foreign Per diems, cost of living allowances compliance with the minimum service premiums may be and foreign service premiums salary range from EUR 251 to EUR considered as part of the may be considered as part of the 25,000 and this amount may double minimum wage, except from in the case of repeat offences within minimum wage. reimbursement of professional two years. expenses. Penalties for non-
Malta has a minimum wage set of the enterprise as stipulated in the at national level. However, the applicable Wage Regulation Order minimum wage requirement is and by the age of the employee. determined by the economic activity
2017 2016
Under 17 years EUR 160.14 per week EUR 158.39 per week
Age 17 years EUR 162.98 per week EUR 161.23 per week
Age 18 and over EUR 169.76 per week EUR 168.01 per week
Malta The minimum wage increases to certain types of employment annually and is expected to change covered by a particular Wage starting from 1 January each year. Regulation Order. In terms of legal working hours, Besides the regular salary received the general rule is that the average during an assignment, per diems working time, including overtime, (daily allowance, to cover food and must not exceed 48 hours for each incidental costs while travelling in seven day period, spread over a connection with one’s work or being reference period of seventeen employed at a distance from one’s weeks. It is, however, possible to home), cost of living allowance exceed this average provided that (amount paid by employers the employee consents in writing. to protect assignees while on Exceptions also apply in relation assignment from increased cost of goods and services in the host • the place where posted location as compared to those in workers are recruited and from the home country), foreign service which they are posted; premiums (assignment related • the law applicable to the allowances) and bonuses (additional contracts concluded with compensation given to an employee workers or with its clients; above his/her normal wage) are considered as part of the minimum • the place where the It is the responsibility of the wage. undertaking performs its substantial business activity and employer posting the worker In terms of administrative where it employs administrative requirements, in the case of to Malta to notify the Director staff; assignments to Malta, it is the of Labour of the intention to responsibility of the employer • the number of contracts post a worker to the country, posting the worker to Malta to performed and, or the size prior to the date of posting. notify the Director of Labour of the of the turnover realised intention to post a worker to Malta, in the Member State of prior to the date of posting. establishment. For non-compliance with this In order to assess whether a posted notification obligation, a fine worker temporarily carries out his between EUR 116.47 and EUR work in Malta, all factual elements 1,164.69 may be imposed. characterising such work and the situation of the worker shall In the case of non-compliance with be examined by the competent the minimum wage requirement, authority in Malta. Such elements penalties of between EUR 232.94 may include in particular: to EUR 2,329.37 may apply. In addition, the employer is liable to • the work is carried out for a pay the employee the amount due. limited period of time in Malta; Directive 67/2014 concerning the • the date on which the posting posting of workers in the framework starts; of the provision of services was • the posting takes place to Malta transposed into Maltese law by as a Member State other than means of Subsidiary Legislation the one in or from which the 452.82 in June 2016 and contains posted worker habitually carries the below, based on Article 4 of the out his work; Directive, with the aim of identifying a genuine posting and preventing • the posted worker returns to or abuse. is expected to resume working in the Member State from In order to determine whether an which he or she is posted after undertaking, which is the service completion of the work or the provider, genuinely performs provision of services; substantial activities, other than purely internal management and, • the nature of activities; or administrative activities, the • travel, board and lodging or competent authority in Malta shall accommodation is provided or make an overall assessment of all reimbursed by the employer factual elements characterising who posts the worker and, if those activities. Such elements may so, how this is provided or the include: method of reimbursement; • the place where the • any previous periods during undertaking has its registered which the post was filled by the office and administration, uses same or by another worker. office space, pays taxes and social security contributions, has a professional licence or is registered with the chambers of commerce or professional bodies;
37 Minimum wage requirements within Europe in the context of posting of workers Currently, the Netherlands has a age of the employee. The level of gross minimum wage set at national the minimum wage is determined level. However, the minimum monthly, weekly and daily as the wage is determined based on the table below:
Employees over the Employees over the Period age of 23* - 2016 age of 23* - 2017
Daily EUR 70.37 EUR 71.61
Weekly EUR 351.85 EUR 358.05
Monthly EUR 1,524.60 EUR 1,551.60
* Employees between 15 and 22 years old are granted a different minimum wage. In the Netherlands survey, only employees over the age of 23 were taken into consideration
A new provision has applied since payments for special events, January 2016 stating that the entitlements to receive payments minimum wage should be paid to in the future, reimbursements a bank account. Furthermore, a which are supposed to cover mandatory holiday allowance of 8% necessary expenses as a result of the gross wage is applicable. Blue of the employment, special collar workers can only work in the reimbursements for wage-earners Netherlands for the minimum wage and heads of families, year-end mentioned above if they are EU/EEA payments, employer’s contributions or Swiss nationals. Special salaries, to health insurance, etc. The service provider higher than the minimum wage, The European Posting of will have a notification apply to non-EU/ EEA and Croatian Workers Directive (96/71/EC) highly skilled migrants who apply for obligation, while the Dutch and accompanying Enforcement residence work authorizations and Directive (67/2014/EU) were recipient should verify the for blue card holders. transposed into a single new notification. The maximum legal working Dutch national law. This Act took schedule in the Netherlands is 12 effect on 18 June 2016. The Act hours per day or 60 hours per week. has consequences for foreign enterprises that deploy personnel Besides the regular salary received for the cross-border provision of during an assignment, every services and for clients that engage monetary payment qualifies foreign contractors. as a wage for the purposes of the minimum wage legislation What are the implications for the except the following: income for service provider and the recipient of overtime, holiday allowances, the service? profit sharing payments, • Every worker posted from recipient of the service, the abroad is entitled to a basic set posted worker and the person of employment and working responsible for the payment conditions; of wages; proof of payment of wages to the posted worker. • At the request of the Inspectorate SZW, the service • The service provider will have provider must provide all the a notification obligation, which information necessary to must be made before the work enforce the Act. begins. Such obligation has not yet taken effect. • The service provider must designate a contact person • The recipient of the service who the Inspectorate SZW can will be required to verify the approach and who will liaise notification that they receive with the Inspectorate. from the service provider (such obligation has not yet taken • The service provider must have effect). If it contains errors certain documents available or has not been made, the at the workplace, such as the recipient of the service must employment contract of the inform the Inspectorate SZW posted worker; documents of this. showing how many hours the posted worker has worked; Fines may be imposed for violations. documents showing the social If the notification and verification security contributions (e.g. the obligations are not complied with, A1 Statement), the identity the recipient of the service may also of the service provider, the be fined.
39 Minimum wage requirements within Europe in the context of posting of workers Norway is one of the Nordic minimum wages for certain groups countries which does not have a of employees. statutory fixed minimum wage The minimum wage can change requirement in place. Generally, at different times for different remuneration is negotiated between industries. However, generally, it the parties, either individually or changes annually, during spring. collectively. The minimum wage depends on However, in certain industries or education, experience etc. business sectors there are generally Below you can find some examples applicable collective bargains in of the current mandatory minimum place which provide mandatory pay in certain industries
Mandatory minimum Industry Qualifications Norway wage per hour Skilled employees NOK 193,00
Unskilled employees NOK 174,00 Building sites Unskilled, min. 1 year NOK 181,50 work experience
Skilled workers NOK 169,44 Generally applicable collective bargaining agreements are Shipping and Semi-skilled worker NOK 161,72 in place in the following shipbuilding industry industries: electro, fishing and Unskilled worker NOK 154,09 transport (both the transport In addition various increments to wages of freight and of persons). apply
Unskilled employee NOK 131,05
NOK 131,05 + NOK Agriculture and Skilled worker horticulture 10,00 In addition various increments to wages apply.
Cleaner NOK 169,37
In addition the employer must pay provisions on minimum wages. travel costs and lodging. Moreover, enterprises participating in public procurement will have Generally applicable collective a contractual obligation to apply bargaining agreements are in place minimum pay according to either in the following industries: electro, a national applicable collective fishing and transport (both the bargaining agreement or a generally transport of freight and of persons). applicable collective bargaining It is important to determine agreement, which should be whether the work is covered by assessed prior to the submission of an agreement which contains the tender. Mandatory normal working time collective bargaining agreement. is a maximum 9 hours a day and a Before average calculation of maximum 40 hours a week. Thus, working hours can be adopted, most employees work 8 hours a mandatory procedure must be a day Monday-Friday. Shorter followed, and some authorizations working hours may apply according are required from the Norwegian to generally applicable collective Labour Inspectorate. bargaining agreements or national In addition the Norwegian Annual applicable collective bargaining Holiday Act applies. The minimum agreements. The working hours wage is considered as remuneration should be stated in the employment for labour, and may not include contract. allowances which come in addition If the conditions are fulfilled, the to wages. employer may apply an average Assignees to Norway must be calculation of normal working hours. registered with the Central Office Average calculation of normal for Foreign Tax Affairs using a working hours means that the specific form (RF-1199). employees may work longer hours Directive 67/2014/EU does not as per day and week for a specific such apply in Norway. However, period, provided the extra hours Norway is adopting similar rules. It put in are taken out in free time. is uncertain when such rules will On average the employee must be adopted, but may be some time not work more than the maximum during 2017. normal working hours according to the legislation or the applicable
41 Minimum wage requirements within Europe in the context of posting of workers Poland has a minimum wage set at • Whether the company sending national level. the employee to work in Poland actually carries out genuine The level of the minimum wage business activity in the country is usually published in September where its headquarters are and is applicable from 1 January of located, and the following year. The minimum wage is a fixed amount determined • That the assignment is of a based on the increase in the price temporary nature. of goods. Moreover, employers sending As from January 2017 the level of assignees to work in Poland will be the minimum wage is PLN 2,000 obliged to: (approximately EUR 460) fixed for 1. File a declaration to the Labour both blue collar workers and highly Inspectorate, at the latest by skilled workers, corresponding the day the employee starts Poland to full time employment, based work in Poland. on an employment contract only (i.e. it is not applicable to civil law 2. Appoint a person to act as based contracts). In 2016, the a point of contact with the minimum wage was PLN 1,850 Labour Inspectorate (“contact (approximately EUR 420). person”). This individual should be based in Poland during the The maximum legal working time period of the assignment. in Poland is 8 hours per day, or the equivalent of 40 hours per week. 3. Maintain and upon request make available to the authorities Besides the regular salary received documentation concerning the during a posting, per diems, assigned individual during the cost of living allowances, foreign period of assignment and for service premiums and bonuses are two years following the end of considered as part of the minimum the assignment. Penalties of between PLN wage as long as they are paid in 1,000 and PLN 30,000 apply monetary form. The foreign employer is obliged to meet the above obligations (filing Penalties of between PLN for non-compliance by an the declaration and nominating a 1,000 and PLN 30,000 apply for employer with the minimum contact person) no later than the noncompliance by an employer with first day the employee works in wage requirements in Poland. the minimum wage requirements. Poland. In the case of assignments The employer is also responsible already underway on the date the for paying the missing amount and new regulations came into force interest to the employee. (18 June 2016), the employer has to On 18 June 2016, Poland’s meet the above obligations within Seconded Persons Act entered three months, i.e., by 18 September into force. The new rules aim to 2016. introduce the provisions of Directive Penalties of between PLN 1,000 67/2014/EU into Polish legislation. and PLN 30,000 (approx. EUR 200 The most important changes – EUR 6,500) can be imposed for brought by this Directive concerns failure to meet the new obligations. new processes under which the Polish Labour Inspectorate will be able to verify whether rules regarding assigned individuals have been followed, in particular: Portugal has a minimum wage Assignment related allowances requirement which is updated such as per-diems, cost of living as needed by the economic allowances, foreign service environment, with no specific premiums, bonuses or other similar timetable. payments are not considered as part of the minimum wage. The current level of the minimum wage, applicable from January In the case of assignments to 2017, is EUR 557 per month and Portugal, neither the assignee, the there is an intention to proceed home nor the host entities have any with a gradual increase in the special notification obligations to the amount during the next few years. local authorities. Previously, as from January 2016, The maximum legal working time in the minimum wage was set at EUR Portugal is 8 hours per day and 40 530 per month. hours per week. Portugal The minimum wage does not No specific information is available depend on occupation, industry about the implementation status of or age. It is also applicable to all Directive 67/2014/EU, in Portugal. employees irrespective of their professional background (e.g. blue collar workers, highly skilled workers or other categories).
The national minimum wage is Under the Romanian labour code, established by Government decision wages are defined as basic wages, (generally on an annual basis) or after allowances, benefits, as well as consultation with trade unions and other additional payments. At employers. the same time the base wages cannot be lower than the national As from 1 February 2017 the minimum wage. Consequently, it is minimum gross wage is RON 1,450 thus considered that the Romanian lei per month (approximately 322 minimum wage cannot include cost EUR). of living allowances, foreign service For foreigners, the same minimum premiums, bonuses or per diems. wage applies in the case of local A home-country employer posting employment or assignment to workers to Romania is required Romania. However, in the case of to notify the Romanian labour highly skilled employees, who hold authorities, at least five days before EU blue cards, the minimum wage Romania the start of the activity of the posted requirement is the equivalent of 4 worked. For non-compliance with times the average gross wage in the requirement to notify the labor Romania. Currently this would mean authorities, fines may be imposed on 4x RON 2,681, i.e. RON 10,724, but the employer. legislation is currently planned to raise the legally determined average gross Setting a base salary below the wage to 3131 RON. minimum national wage constitutes a civil offence and is penalised by a fine In Romania the standard working Romania has a minimum of between RON 300 and RON 2,000 time is 8 hours per day and 40 hours for each employment contract where wage set at national level. per week. the base salary is set below the Collective Bargaining Where the normal working hours minimum wage. Repeatedly setting Agreements can also set are, by law, less than 8 hours/day, the wages below the national minimum minimum hourly wage is calculated wage may constitute a criminal minimum wages for certain by reference to the minimum gross offence. categories of employees, wage and the average number of Directive 96/71/EC was transposed hours worked per month. however not lower than the into Romanian legislation through national minimum wage. Minimum wage rates are also Law 344/2006. Directive 67/2014/ established by the applicable EU was supposed to have been collective agreements. However transposed into Romanian law in these amounts cannot be lower than June 2016. However a draft law to the national minimum gross wage. do this was only issued on 4 October 2016, and has yet to be passed.
43 Minimum wage requirements within Europe in the context of posting of workers Slovakia’s minimum wage is wage is at least EUR 870 (EUR 810 determined annually through during 2016) per month. government regulation. The Slovak The Slovak minimum wage includes government passes the regulation in cost of living allowances, foreign October each year and it enters into service premiums, bonuses and force starting from 1 January of the payment for work on professional following year. or personal anniversaries (unless The minimum wage is determined this is provided from the net profit as a fixed, monthly amount, for or from the social fund). However, employees who are paid monthly per-diems are not considered part of and have a regular weekly working the minimum Slovak wage. time. For other employees an hourly For non-compliance with the Slovak rate is applicable. The level of the labour regulations on employment, minimum wage does not depend on the employer may face fines of up the occupation, but on the type of Slovakia to EUR 200,000. work (i.e. complexity, responsibility and level of work difficulty). Each In the case of postings to Slovakia, position must be classified in one of the host employer must inform the six levels of work difficulty. the relevant Office of Labour, Social and Family Affairs in relation The minimum wage for each level to the start/termination of the of work difficulty is determined by assignment within 7 days of the multiplying the minimum wage by commencement/termination of the the index stated for the relevant assignment. The host employer level of work difficulty. Below you faces fines of up to EUR 33,193.91 can find examples of the six levels In the case of postings to if it fails to notify the assignment of work difficulty: Slovakia, the host employer or employment to the Slovak must inform the relevant • Level 1 – e.g. Cleaner authorities. Office of Labour, Social and • Level 2 – e.g. Administrative In general, the maximum legal worker working time in Slovakia is 8 hours Family Affairs in relation to per day or 40 hours per week. • Level 3 – e.g. Nurse the start/termination of the Special rules apply for working hours • Level 4 – e.g. Chief accountant of youth workers (under 18 years of assignment within 7 days age), workers carrying out activities of the commencement / • Level 5 – e.g. Production manager in an environment with a high risk termination of the of contracting cancer and healthcare • Level 6 – e.g. Managing director workers. assignment. As the minimum wage level Directive 67/2014/EU was depends on the level of work implemented via Slovak Act No. difficulty, the type of work must 351/2016 Coll. on cross border be taken into consideration. Highly cooperation in assignment of skilled workers are generally employees for performance of classified in the fifth and sixth level work in the provision of services as of work difficulty. For example, for amended, which became effective blue collar workers the minimum on 18 June 2016. This act primarily wage is at least EUR 435 (EUR 405 sets forth rules for identification during 2016) per month, while for of the assigning employer and highly skilled workers in the sixth assigned employee as well as level of work difficulty (e.g. workers obligations of the host employer with a blue card), the minimum towards the public authorities. Slovenia has a minimum wage For non-compliance with the requirement and the level of the minimum wage requirements, the minimum wage is generally updated general penalty is between EUR every year in January. As from January 3,000 and 20,000. For employers 2017 the level of the minimum with 10 or fewer employees, the wage was set at EUR 804,96 and it penalty is between EUR 1,500 and remains unchanged irrespective of EUR 8,000. A penalty between EUR the individual’s professional expertise 1,000 and EUR 2,000 is also payable (e.g. blue collar workers, highly skilled by the individual who represents the workers or others). employer, who is responsible for the non-compliance. The minimum wage is determined as a fixed amount and is based on The maximum legal working time in economic factors, such as growth Slovenia is 8 hours per day or 40 hours of retail prices, change in salaries, per week. economic growth and changes in Directive 96/71/EC has already been employment. The minimum wage Slovenia implemented into Slovene legislation, includes all salary elements according through the Employment, Self- to the Employment Relationships employment and Work of Aliens Act, Act, except additional payments for the Employment Relationship Act, night work, for work on Sundays, the Private International Law and for work on public holidays and Procedure Act, and the Employment work-free days determined by law. and Insurance Against Unemployment These supplements are added to the Act. amount of the minimum wage. Thus, assignment related allowances such Directive 67/2014/EU has not been as cost of living allowances, foreign implemented yet. However, the service premiums or bonuses may Posting of Workers Act is now in be considered part of the minimum preparation and will include both the wage. above mentioned Directives.
There is a minimum wage the most representative unions and requirement in Spain, which is set the management. However, the by the government. For 2017, the minimum wage set by the collective minimum wage is EUR 707.60/ bargaining agreements can consider month. However, collective bargaining other criteria such as occupation or agreements (national, regional position in the company, depending or sectional), usually set another on the sector. minimum wage requirement, The minimum wage set by the depending on the activity or government does not distinguish professional category, which is between blue collar, highly skilled always higher than the one set by the or other types of workers, as it is a government. fixed amount. However, collective The minimum wage set by the bargaining agreements usually set a government is applicable as from 1 level of minimum wage depending on January and is updated every year. the category of the employee. Spain Collective bargaining agreements set The minimum wage set by the the minimum wage for a fixed period government and the collective of time too, generally for one year. bargaining agreements may include The minimum wage set by the only the basic working hours in a government is a fixed amount. month and thus assignment related However, collective bargaining allowances such as cost of living agreements can determine other allowance, foreign service premiums, remuneration systems. Generally, and per diems are not considered part collective bargaining agreements of the minimum wage. set a fixed amount and, in addition, The Spanish Workers Statute cover other amounts that depend on establishes a maximum of 9h per productivity, seniority, etc. day and 40h per week. However, The minimum wage established by the duration of the working day or the government does not depend on week, may be different, depending the occupation, industry or the age of on the applicable collective bargaining the employee. It is set based on an agreement. agreement between the government,
45 Minimum wage requirements within Europe in the context of posting of workers Sweden does not have a as well as a contact person for the minimum wage requirement for employer. EU nationals. The notification can be filed The maximum legal working online, on the Swedish Work hours in Sweden are 8 hours environment Authority’s home per day or 40 hours per week. page. In the case of non- Overtime might be allowed under compliance with the notification certain limits. requirements, the tax authorities may impose penalties starting In terms of administrative from SEK 20,000. requirements, in the case of assignments to Sweden, The implementation of Directive the home country employer 67/2014/EU in Sweden is still must notify the Swedish Work in progress. New legislative Environment Authority no proposals are under discussion Sweden later than five days after the and the amendments to Swedish assignment has begun. The law are expected to come into notification should include certain force on 1 July 2017. Hence, no specific information such as both specific measures have been the home and the host employer taken in Sweden yet.
Switzerland does not have a documents is actually being paid minimum wage set at national (by providing pay slips, records of level. However, the minimum wage expense compensation payment, requirements are set out for specific etc.). industries in hundreds of collective All 26 Swiss cantons apply their labour schemes (some of which own standard salary levels, meaning mandatorily apply to all employees that when determining a relevant working in Switzerland whether or reference salary every case is not the employer or its Swiss host analysed individually. All cantons, group company is a party to the however, base their assessment on scheme). their statistical reference salaries Apart from the above and regardless for comparable Swiss employees in of the type of industry and work their geographical area. This means carried out in Switzerland, the that for all sorts of activities and Switzerland following applies without exception: groups of employees they apply a Employees who are employed statistical reference salary range outside Switzerland and are and usually request the assigning supposed to work in Switzerland employer to pay the average of as assignees must be paid a salary the statistical salary range to the for the time in Switzerland which employee. is in line with the regulations in the If a salary turns out not to be relevant Swiss canton, industry sufficient during the work and profession (so-called Swiss application process, time consuming reference salary).In this respect, negotiations with the authorities the Swiss immigration authorities on the adjustment payments always check on the salary and drafting and signing of new requirements when processing a supporting documents are required. work permit application. The minimum wage is determined In addition, in the event of labour either (i) based on the provisions inspections in Switzerland on site, of potentially applicable collective the employer may be required labour scheme(s) or (ii) in the case to provide evidence to the of assignees for whom no collective authorities that the salary (plus labour scheme applies, individually expenses) outlined in the work on a case by case basis. permit application and supporting Employees who are employed outside Switzerland and are supposed to work in Switzerland as assignees must be paid a salary for the time in Switzerland which is in line with the customs in the relevant Swiss canton, industry and profession (so-called Swiss reference salary).
For assignees for whom no In terms of administrative collective labour scheme applies, requirements, at least an online the following main criteria must be notification or even a formal taken into consideration: application must be submitted to the local authorities (depending on • Specific role/activities/ the location of the home company, responsibilities when working in nationality of the assignee, duration Switzerland. of assignment and total duration • Age. of all assignments of the same • Job grade. employer to Switzerland in the current calendar year). • Overall level of occupation (e.g. 50%, 80%, 100%). All 26 cantons apply different processes to the different permit • Weekly hours of work as per types. In the case of non-compliance employment/assignment with the above requirements the contract. employer may be liable to the • Qualification level (highest following: schoo and professional • Subsequent payment of the certificate). salary gap claimed. • Overall professional experience. • Obligation to pay the proceeding • Service for the applying fees. employer. • In the case of a minor breach • Number of employees (e.g. salary gap is small) a fine of employed by the Swiss group up to CHF 5,000. entity. • In the case of more material In Switzerland, the maximum legal breaches, a ban on providing working hours per day/week depend services in Switzerland for up on the specific activity and industry. to 5 years (this is imposed on In addition to the assessed Swiss more than 400 employers every reference salary, the employer must year and publicly disclosed on pay the employee expenses for the internet) in addition to the meals and housing, as well as for fine of up to CHF 5,000. travel related to the assignment in • In the case of a more material Switzerland. breach, which is committed Besides the regular salary, systematically and with intent received during an assignment the fine may be up to CHF to Switzerland, cost of living 1million. allowances and foreign service premiums may be considered salary components which count towards the reference salary.
47 Minimum wage requirements within Europe in the context of posting of workers The United Kingdom has a national The minimum wage in the UK is minimum wage (NMW) applicable. determined as an hourly rate. Historically, NMW rates used to For NMW purposes, the pay change annually on 1 October. allocated to a pay reference period in However, in April 2016, the the UK is any pay which is: Government also introduced the National Living Wage (NLW). From • received during that period, April 2017 onwards, NLW and NMW • earned in that period but not rates will be reviewed and increased received until the next pay at the same time. reference period. The NMW rate per hour depends The pay in the period will consist of on age and whether the employee the total eligible earnings for NMW United is an apprentice (see table below). purposes and it is not limited to the Currently, the NMW is £ 6.95 per hourly rate received by the individual. Kingdom hour for workers aged 21 to 24 and will be raised to £7.05 from April 2017. The NMW is calculated by dividing pay by the number of actual hours Since 6 April 2016, a new mandatory worked in the relevant pay reference NLW applies to workers aged 25 period. and over. All employers must pay employees aged 25 and over, £7.20 The level of the minimum wage is per hour (£7.50 from April 2017). The determined based on the age of the NMW will still apply for workers aged worker and whether the individual is 24 and under. employed as an apprentice. The NLW will operate in conjunction with the existing NMW Regulations.
As from April 2016, a new Under 21 to NLW 25 Year 2017 Apprentice 18 -20 National Living Wage 18 24 and over (NLW) was introduced for October 2016 £3.40 £4.00 £5.55 £6.95 £7.20 individuals over the age of (current rate) 25. All employers must pay Rate from employees aged 25 and over, £3.50 £4.05 £5.60 £7.05 £7.20 April 2017 £7.20 per hour (£7.50 from
April 2017). For instance, the NMW rates for Wage will depend on whether the Apprentices are based on age in the work experience offered makes following way: the individual a worker for National Minimum Wage purposes. Apprentices are entitled to the apprentice rate if they are either: • Under 19 Cases which are not eligible for the minimum wage: • 19 and above and in the first year of their apprenticeship • Government training schemes or European Union Programmes: Apprentices aged 19 or above who if a person is doing work have completed the first year of their experience in a government apprenticeship are entitled to the scheme to provide training, work minimum wage rate for their age. experience or temporary work. Work experience – refers to a • Work experience as part of an specified period of time that a education course – a person person spends in a business, during doing work experience which which they have an opportunity is a requirement of a higher or to learn directly about working life further education course for less and the working environment. The than one year is not eligible for nature and arrangements for work the minimum wage. experience vary and an individual’s entitlement to the National Minimum • Volunteers. The UK considers bonuses as part To enforce the National Minimum of the NMW/NLW. However some Wage and National Living Wage, employers pay workers special the government recently increased allowances over and above standard the financial penalty percentage pay (e.g. London weighting). These that employers pay for breaking allowances may not count towards minimum wage law from 100% to minimum wage pay unless they 200% of the unpaid wages owed are consolidated into the worker’s to workers. The increase came standard pay or they relate to the into effect on 1 April 2016 and will worker’s performance. This would apply to pay reference periods therefore apply to COLA and foreign commencing on or after this date. service premiums, unless they are The maximum penalty is £20,000. consolidated into the assignees’ The penalty can be halved if base pay. employers pay within 14 days. In the case of non-compliance with Anyone found guilty of non- the minimum wage requirements compliance may also be considered the employer might be required to: for disqualification from being a company director for up to 15 years. • Repay arrears of the minimum wage to each worker named on Directive 67/2014/EU was the notice. transposed into United Kingdom legislation on 18 June 2016. • Pay a penalty.
49 Minimum wage requirements within Europe in the context of posting of workers
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