The new EU directive on the posting of workers – what is changing and what needs to be taken into account

27 November 2019 – need2know

On 30 July 2020 the time has come! It will take a little more than half a year for the new EU directive on the posting of workers (2018/957/EU) to be transposed into the national law of the member states. This Directive, which amends the “old” Posting of Workers Directive of 1996, brings innovations and clarifications for the cross-border employment of workers.

Initial Situation – The Posting of Workers
The right of an undertaking to post employees to other EU member states follows from the freedom to provide services. A posting occurs when, for a limited period of time, a worker carries out his work in the territory of an EU Member State other than the State in whichhe normally works. During a posting, the employee, although working abroad, would in principle continue to be subject to the law of his or her country of origin. The European legislature recognised in the 1990s that this would open the door to the circumvention of national rules and adopted corresponding provisions against it. These have now been revised by the new Posting of Workers Directive.

Changes due to the new Posting of Workers Directive
Already in the past, posted workers were protected to the extent that compliance with a “hard core” of labour law regulations of the receiving state was required. This protection will be considerably strengthened in the future, above all, it will no longer be just the minimum wage rates that will be required, but all the components that make up the remuneration, including bonuses, surcharges and special payments, will have to be extended to posted workers from the first day of the posting. Regarding payment, workers who are posted should therefore be treated largely equally to local workers (“equal pay”). In addition, after a posting period of 12 or in some cases 18 months all terms and conditions of employment in the country where the work is carried out apply, with a few exceptions.

In Austria, the legislator has moved the provisions on posting in 2017 to the Wage and Social Dumping Control Act (LSD-BG) and in some cases has gone far beyond what EU law would require. A national implementation of the new Posting of Workers Directive is not yet in sight.

Outlook – incomplete implementation?
In practice, however, it has long been proven that Europe-wide competition is not only based on labour law regulations, but also on ancillary wage costs, such as social insurance in particular. The new Posting of Workers Directive does not change the relevant provisions of Regulation 883/2004 and its implementing regulation. For this reason, posted workers will continue to be subject to the social security system of their country of origin for a period of 24 months, as evidenced by their health insurance institution using Form A1. This means that – due to the different contribution levels – a completely legal competition with labour costs remains possible even under the new Posting of Workers Directive.

Therefore, there can still be no real talk of equal conditions for equal work. Recently, questions about the binding effect of false or even abusive A1 certificates have also been discussed by the European Court of Justice. It remains to be seen whether it will be possible to find a Europe-wide solution that reconciles all the various, ambivalent objectives of the posting rules – safeguarding the freedom to provide services, protecting the wage and social levels of the high-wage states, fair competition – without becoming an even more bureaucratic juggernaut, and it also remains to be seen how the Austrian legislator will ultimately implement the changes introduced by the new Posting of Workers Directive in national law.

For employers, the issue of posting – not least against the background of possible sanctions in the event of infringements – is and remains a problem not to be underestimated in the daily world of work. Despite the fact that the official website ( is now quite well prepared and also available in several foreign languages, finding the relevant collective agreement for foreign employers when posting to Austria in the Austrian jungle of collective agreements with hundreds of different collective agreements can present an insurmountable challenge and in any case requires detailed examination. It is therefore advisable to obtain separate legal advice in individual cases and also to update any existing regulations in the company (e.g. secondment policies, secondment agreements).

Walter Niedermüller
Philipp Bertsch

Questions? Please contact:
Walter Niedermüller
Florian Plattner

Pratice Group:
Labour Law

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