April 04, 2020

Labor Law: Posting of workers to EU

One of the fundamental freedoms on which the European Union’s internal market is based, is the freedom to provide services and movement of persons throughout the European Union. Since the Republic of Croatia became a member state of the EU, Croatian employers can post their workers to work abroad for them (posting workers). In practice, the most common question is how to carry out the process of posting workers and what conditions must be met. Below are brief guidelines and an overview of the essential elements for transnational posting of workers and some examples of posting under national legislation.

I. GENERAL CONDITIONS

Posting of workers is a situation where an employer sends his employees from one country to another to work there for a certain period of time. For posting of workers several conditions must be fulfilled, some on the side of employer and some on the side of worker. Below is an overview of the essential elements for posting of workers to another country.

1. Posting contract

The basis for posting is a business cooperation contract between the posting company (the employer) and the foreign business entity (recipient of the service), which defines the description of the services to be performed, the time and place, the estimated duration and commercial conditions (price, method of payment, etc.). Therefore, posting of workers does not mean that the worker is working for another, foreign employer, but rather that the worker performs tasks assigned to him by a Croatian employer, which tasks the Croatian employer has taken over by a business cooperation contract.

2. Certificate A1

Prior to posting of workers the employer should inform the competent institution in the home state of his intention to post workers, which will issue him an A1 certificate, if all the conditions are met. That certificate will be used in the state of posting as evidence of health insurance, and so that the worker will remain covered by the social security of his home state and that he is exempted from paying social security contibutions in the posting country.

An application for obtaining an A1 certificate is submitted by the employer to the competent authority of its state which then communicates with the competent authority in the state of posting. In the Republic of Croatia, an application for A1 certificate is submitted to the Croatian Pension Insurance Institute (HZMO). Each member state determines its conditions for issuing A1 certificates.

3. Administrative requirements and measures

Each EU member state has the right to impose on the employer certain administrative requirements and control measures necessary for the effective monitoring of the fulfillment of obligations towards the employees concerned. These controls and requirements are:

  1. an obligation to submit a simple posting declaration before the commencement of a posting containing the relevant information necessary for the control at the place of work,
  2. an obligation to keep records, i.e. a copy of the employment contract, payrolls, work orders, hours of work and proof of payment of salary, in a clearly designated and accessible place in the country in which the work is being carried out,
  3. and obligation to deliver the documentation referred to in paragraph (2) above at the request of the state of posting,
  4. an obligation to provide a translation of the documents referred to in (2) above into the official language of the state of posting,
  5. an obligation to appoint a liaison officer for the competent authorities in the country of posting,
  6. an obligation to appoint a contact person and a employer’s representative in the country of posting.

4. Conditions of employment

Employers, i.e. employers who post workers, are obliged to ensure that workers have equal working conditions as well as workers in the state of labor, ie are obliged to ensure compliance with:

  • the longest working time and the shortest rest period,
  • minimum paid vacation,
  • all work bonuses, plus overtime,
  • conditions for assigning workers to third employers,
  • health, safety and hygiene at work,
  • equal treatment for men and women,
  • conditions for the accommodation of workers,
  • allowances and compensation for travel, food and accommodation costs for workers who, due to the official route, leave their place of residence.

Posted worker will be subject to the legislation of the country from where he was posted – home state – under condition that:

  1. posting does not exceed 24 months,
  2. person is not sent to replace another posted person,
  3. the law of the home state has been applied to the posted person for at least one month prior to the posting,
  4. The employer regularly carries out his activity in his home country,
  5. there is a direct connection between the worker and the employer during posting of worker.

The competent authorities of the country to which worker is posted, and of the home state, may during posting, control the existence of all necessary conditions for posting.

Procedure after posting

After completion of posting, the same worker may be sent back to work abroad only after a period of two months has expired. Exceptionally, it may be possible for the same worker to request an extension of the period of posting (longer than 24 months) if there is a justified reason, e.g. that it is foreseen that the contracted work cannot be completed within 24 months).

II. POSTING EXAMPLES

In addition to all the above, each Member State can elaborate on specific details of the posting procedure. As an example, here are some instructions for posting workers to Italy, Germany, Hungary and Croatia.

1. Posting to Italy

Upon receipt of the A1 certificate, prior to posting of the employee, a posting declaration must be sent to the competent authorities through the following pages: www.lavoro.gov.it.

It is necessary to ensure compliance with all obligations from paragraph 3. above. (2) to (6) and point 4., with the particular need to pay attention to the minimum wage and working hours.

A copy of the posting declaration should be sent to the contact person in Italy referred to in point 3. (6). All correspondence can be done by e-mail.

Depending on the duration of the posting, it is necessary to check with the Italian Human Resources Department what is the required residence registration and the documentation.

2. Posting to Germany

Upon receipt of the A1 certificate, prior to posting of the employee, a posting declaration must be sent to the competent authorities through the following pages: meldeportal-mindestlohn.de.

It is necessary to ensure compliance with all obligations from paragraph 3. above. (2) to (4) and point 4. with the particular need to pay attention to the minimum wage and working hours.

A copy of the posting declaration should be sent to the contact person in Italy referred to in point 3. (6). All correspondence can be done by e-mail.

Depending on the duration of the posting, it is necessary to check with the German Human Resources Department what is the required residence registration and the documentation.

3. Posting to Hungary

Upon receipt of the A1 certificate, prior to posting of the employee, a posting declaration must be sent to the Hungarian competent authorities. The posting declaration can be found through the following pages: http://ommf.gov.hu/index.php?akt_menu=547.

On this link can be found all the explanations and operating instructions (“EXPLANATORY INSTRUCTIONS”) and you must first register.

While working in Hungary, workers are subject to the Hungarian minimum working conditions, which means that their wages cannot be below the minimum Hungarian wage, so such financial differences should be taken into account with the Hungarian supplier when concluding the contract.

4. Posting to Croatia

Upon receipt of the A1 certificate, prior to posting of the employee, a posting declaration must be sent to the competent authorities. The posting declaration can be found through the following pages: http://www.mrms.hr/posting/instructions-for-foreign-companies/

Once the declaration is completed, it is necessary to send it to the following e-mail address:

postingdeclaration.inspektorat@mrms.hr

It is also necessary to ensure that all obligations under point I. 3. above are respected, (2) to (4) and points I. 4.

All documentation on the work of posted workers should be made available to the competent authorities of the Republic of Croatia for a period of 5 years from the end of the posting. In the case of an inspection, the translation into Croatian must be provided.

A copy of posting declaration must be provided to the contact person in Croatia in point 3 (6). All correspondence can be done via electronic mail.

Authors:

elena.musak@odvjetnik-bistrovic.hr

mislav.bistrovic@odvjetnik-bistrovic.hr

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