Posting of foreign workers: equal pay and what are the rules?

In mid-2020, a number of changes were made to the rules on the posting of workers within the European Union. An important change is that the maximum duration of posting is limited and there is now a right to equal pay for foreign workers posted to the Netherlands.

Until 1 March 2020, a posted worker was entitled to a number of minimum working conditions in the host country, but only the right to the minimum wage and holiday allowance. If these working conditions are more favourable in the host country than in the country from which the employee is posted, the employee is entitled to the most favourable conditions.

This right has now been extended, however, because the revision of the Posting of Workers Directive is based on the principle that 'equal work in the same workplace must be remunerated equally'. As a result, posted workers are now entitled to the minimum wage and holiday allowance in the 'most favourable' country, as well as, for example, supplementary allowances, bonuses and wage increases.

It is also important to bear in mind that necessary costs incurred in the context of the posting (e.g. travel expenses, meals and accommodation costs) should not be included in the minimum wage, but should be reimbursed separately to the posted worker. An employer's obligation to reimburse these costs is determined by the law of the country from which the worker is posted. Deduction of such costs below the minimum wage is, however, no longer permitted.

Furthermore, the maximum duration of secondment has been reduced from an unlimited period (previously) to 12 months (currently), with the possibility of an extension of up to six months. Extension is only possible, however, if it can be justified why the period of 12 months will be exceeded. Such a reasoned submission must be addressed to the Ministry of Social Affairs and Employment.

It is also important to know that after 12 months of secondment, the full labour law of the host country will apply, with the exception of dismissal rights and supplementary company pension schemes. However, this does include, for example, that an employer has an obligation to continue to pay wages for 104 weeks in the event of incapacity for work, and also that all provisions of, for example, collective agreements that have been declared universally binding, become applicable. The chain regulation will also become applicable after 12 months. Moreover, foreign employers must be aware of the obligation to report where and when and with which posted workers will be working in the Netherlands. This notification must be made on www.postedworkers.nl/online-melden. In addition, a personnel file/administration must be present at the workplace, containing at least salary specifications and employment contracts of the seconded employees. Non-compliance with the reporting obligation or other obligations is subject to fines.

If you have any questions or would like more information on this subject, please contact one of our employment lawyers.

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