International Assignments in light of the Revised Posting of … · 2018. 7. 12. · Employment contract; letter of assignment; payroll books; document attesting payment of salaries,

International Assignments in light of the Revised Posting of Workers Directive 96/71/EU:

Why registration obligations matter

Webinar—April 2018

2© 2018 KPMG Law Rechtsanwaltsgesellschaft mbH, associated with KPMG AG Wirtschaftsprüfungsgesellschaft, a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The name KPMG and the logo are registered trademarks of KPMG International.

Host Countries


Contents

Scenario: Business Traveller “Dual Role”c)Scenario: Business Traveller “Project”b)

Summary of Mandatory Labour Law Requirements 1Scenarios2

Impact of the Revised Posting of Workers Directive3

Scenario: Business Traveller “Classic”a)

Practical Recommendations4

Italy

Pierluigi Zucchelli

KPMG Fides Servizi di Amministrazione S.p.A.—April 2018


Mandatory Labour Law Requirements: OverviewITALY

Mandatory Labour law Requirements

According to the 96/71/UE directive and the Italian Decree n° 136/2016 mandatory requirements are:— A mandatory communication to the Ministry of Labour

to be filled in and submitted— One representative to be appointed (domiciled in Italy)

who is in charge of caring such documents during the secondment and for 2 years after its end

— Respect of Italy's minimum working conditions (working time, holidays and salary)

Responsibility for Compliance & Sanction for Non-Compliance

The Employer, i.e. the home company, is entirely liable of all obligations according to the Italian Decree.— Non-compliance with mandatory notification requirement: € 150 – €

500 per Employee (fines cannot exceed € 150,000)

— Non-compliance with document retention obligations: € 500 – €3,000 per Employee (fines cannot exceed € 150,000)

— Non-compliance with the obligation to have a representative domiciled in Italy: € 2,000 – € 6,000

— Non-compliance with the secondment rules: € 50 per Employee and per day of work; fine between € 5,000 and € 50,000

— The difference of retribution must be paid if the required conditions have not been respected

Documentation Obligations

Relevant documents are:— employment contract— letter of assignment— payroll books— document attesting payment of salaries — official document related to the hiring abroad of

Employee— certificate of coverage

Risk of Detection/Auditing Mechanisms

— The Italian Labour Inspectorate can perform detections and on-site checks. They can verify the correctness and authenticity of the assignment conditions (registration requirements included). It can control all the documents related to the employment relationship as well as the corporate documents.

— Registration to the Labour Authorities is aimed at tracking the presence of foreign Employees in Italy. Only in case of checks, the Authorities will examine the above documents.

— Checks are performed on samples. The obligation of communication exists for all the sectors.

Scenarios


a) Scenario: Business Traveller “Classic”ITALY

EU citizen (no third-country national)

external meetings, sales meetings, conferences or negotiations

Responsibility for Compliance & Sanctions for Non-Compliance: Not applicable

Overview of Mandatory Regulations and Exemptions?This scenario is not considered as work activity, so there is no registration obligation and no following duties.

Risk of Detection/Auditing Mechanisms:No sanctions, if no work activity is performed.

Documentation Obligations:Not applicable

up to 4 days; contract in home country


Excursus: Business Traveller “ClassicITALY




Overview of Mandatory Regulations and Exemptions?This scenario is not considered as work activity, so there is no registration obligation and no following duties.

Risk of Detection/Auditing Mechanisms:No sanctions, if no work activity is performed.


For 1 month; contract in home country

Vorführender

Präsentationsnotizen


b) Scenario: Business Traveller “ProjectITALY


8 month; contract in home country

work on a construction site of a client of the A GmbH

Responsibility for Compliance & Sanctionsfor Non-Compliance: — The Employer is entirely liable. — Fines are up to € 150,000 depending on the extent and gravity of

the non-compliance.

Risk of Detection/Auditing Mechanisms:— Detections and on-site checks by Italian authorities Inspectorate — Verification of correctness and authenticity of the assignment

conditions (registration requirements included)— Possible audit of documents related to employment relationship

and corporate documents

Overview of Mandatory Regulations and Exemptions:— One representative must be appointed in charge of keeping all

necessary documents.— Respect of all working conditions as requested by the Italian Law.

Documentation Obligations: Employment contract; letter of assignment; payroll books; document attesting payment of salaries, official document related to the hiring abroad of Employee; certificate of coverage to be kept for two years from the end of the posting by the appointed representative.


Excursus: Business Traveller “Project” ITALY – Scenarios


26 months; contract in home country

Responsibility for Compliance & Sanctions for Non-Compliance: — The Employer is entirely liable. — Fines are up to € 150,000 depending on the extent and gravity of

the non-compliance.

Risk of Detection/Auditing Mechanisms:— Detections and on-site checks by Italian authorities— Verification of correctness and authenticity of the assignment conditions

(registration requirements included)— Possible audit of documents related to employment relationship and

corporate documents; additional social security documents

Overview of Mandatory Regulations and Exemptions: — At the end of the current maximum period of posting possible the

social security contribution authorities of home and host countries will agree on where and how contribution must be paid.

— Respect of all the working conditions as requested by the Italian Law.

Documentation Obligations: In addition, to all documents to be kept during the initial maximum possible period of posting of two years, further documents must be submitted to the authorities for a longer additional period of three years to avoid paying the social security contribution in the host country. Documents are to be agreed between the authorities of the two countries.



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Excursus: Business Traveller “Project” ITALY

For 8 months; contract in home country

work as IT specialist and help implementing specific systems with a client of the A GmbH

Responsibility for Compliance & Sanctions for Non-Compliance:— The Employer is entirely liable. — Fines are up to € 150,000 depending on the extent and gravity of

the incompliance.

Risk of Detection/Auditing Mechanisms: — Detections and on-site checks by Italian authorities Inspectorate.— Verification of correctness and authenticity of the assignment conditions

(registration requirements included).— Possible audit of documents related to employment relationship and

corporate documents.

Documentation Obligations:Employment contract; letter of assignment; payroll books; document attesting payment of salaries, official document related to the hiring abroad of Employee; certificate of coverage to be kept for two years from the end of the posting by an appointed representative.

Overview of Mandatory Regulations and Exemptions:— One representative must be appointed in charge of keeping all

necessary documents.— Respect of all the working conditions as requested by the Italian

Law.



ITALY



Responsibility for Compliance & Sanctions for Non-Compliance:— The Employer is entirely liable. — Fines are up to € 150,000 depending on the extent and gravity of

the non-compliance.

Risk of Detection/Auditing Mechanisms:— Detections and on-site checks by Italian authorities Inspectorate— Verification of correctness and authenticity of the assignment conditions

(registration requirements included)— Possible audit of documents related to employment relationship and

corporate documents; additional social security documents

Overview of Mandatory Regulations and Exemptions: — At the end of the current maximum period of posting possible the

social security contribution authorities of home and host countries will agree on where and how contribution must be paid.


Documentation Obligations: In addition, to all documents to be kept during the initial maximum possible period of posting of two years, further documents must be submitted to the authorities for a longer additional period of 3 years to avoid paying the social security contribution in the host country. Documents are to be agreed between the authorities of the two countries.

Excursus: Business Traveller “Project”

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The Head of Finance from A GmbH is also the Head of Finance of the subsidiary in Italy

Head of Finance –EU citizen (no third-country national)

to travel regularly (days or weeks): attending internal meetings, project work; contract in home country

c) Scenario: Business Traveller “Dual Role” ITALY

Responsibility for Compliance & Sanctions for Non-Compliance: — The Employer is entirely liable. — Fines are up to € 150,000 depending on the extent and gravity of the non-

compliance.

Risk of Detection/Auditing Mechanisms:— The Italian Labour Inspectorate can perform detections and on-site checks on

samples — Verification of correctness and authenticity of the work relationship and law fulfilments — Review of all the documents related to the employment relationship as well as the

corporate documents— Additional documents can be those to be compliant considering the dual-role of the

person

Overview of Mandatory Regulations and Exemptions: — The present case is being discussed by the Italian authorities to define the

scope of applicability, due to the non-temporary aspect of the dual-role. As for the current law about registration requirements it is highly suggestable to perform the registration as there is no difference nor exception for any sectors.


Documentation Obligations:All documents regarding the person having a dual role also in Italy should be kept for the entire period of the activity of the person and also after it ends. In particular, all documents concerning the employment relationship as well as the corporate documents.

Impact of Revised Posting of Workers Directive


SummaryITALY

Impact of the revised Directive

— The Italian Decree 136/2016 provides posted Employees with better conditions than the minimum ones requested by the 96/71/UE Directive as far as the applicability of the same remuneration (not only the minimum granted by law) for the posted Employees and the local Employees.

— At the end of the maximum possible period of posting as foreseen by the revised EU directive, social security contribution will be paid in Italy (as host country).

— Any potential change might include in the remuneration for posted Employees further parts of the salary that are planned by eachcompany (secondary-level bargaining agreement- additional to National Collective bargaining agreements that are mandatory).

— Any bonuses to be given to posted Employees will depend on the structure of the bonuses themselves as agreed in the company.

— Thirteenth monthly salary: always provided to posted Employees as included in the National Collective Bargaining Agreements.

— The applicable regulations for the posted Employees in the home company have no impact on the Italian Law. Relevant is solely the compliance with all aspects of law/remuneration applicable to the posted Employees in Italy.

Practical Recommendations


Practical RecommendationsITALY

Auditing/checks cannot be avoided as they are on samples. Compliance will prevent problems in case of audits through authorities.

A local host contract could be advisable after that the EU maximum covered period is expired, so that it is no longer possible to be exonerated from paying the social security contribution to the home country.

Please be always up-to-date as far as new amendments and labour law specifications are concerned about this matter.

Compliance with the law is inevitably to prevent sanctions.

Poland

Renata Kulpa

D.Dobkowski LP Warsaw, Poland (affiliated withKPMG in Poland)—April 2018


Mandatory Labour Law Requirements: OverviewPOLAND


According to the Act of 10 June 2016 on posting of Employees within provision of services and the Labour Code, the mandatory requirements are:— Standards and time of work as well as daily and weekly rest periods— The amount of annual leave— The minimum remuneration for work determined on the basis of separate

provisions— The amount of remuneration and supplement for overtime work— Occupational health and safety— Protection of Employees during pregnancy and during maternity leave— Employing youthful and performing work or other by a child— The principles of equal treatment and the prohibition of discrimination in

employment — Perform work in accordance with the provisions on the employment of

temporary workers


— Notification obligations are imposed on the Employer posting Employees towards the National Labour Inspectorate.

— The contractor entrusting the execution of works related to construction works or maintenance of a construction object to an Employer is liable to the posted Employee jointly and severally with the Employer for his obligations arising from the performance of these works due to the remuneration.

— Penalty sanction for the Employer for non-compliance with notification and documentation obligations range from PLN 1,000 (€ 240) to PLN 30,000 (€ 7,200) per violation.


The Employer is obliged to:— Store during the posting in paper or electronic form the

following documents:- a copy of the employment contract- documentation on the working time on a given day- documents specifying the remuneration with the amount

of deductions and proof of payment to the Employee— To make available, if requested, the documents referred

above, and their translations into Polish during the posting and for a period of 2 years after the completion of posting.


— The control is performed by the National Labour Inspectorate (usually ad hoc controls).

— The Inspector may verify all documents regarding posting Employees.

Scenarios


a) Scenario: Business Traveller “Classic”POLAND



Responsibility for Compliance & Sanctionsfor Non-compliance:Not applicable

Overview of Mandatory Regulations and Exemptions?Not applicable

Risk of Detection/Auditing Mechanisms:Low.Radom controls performed by the National Labour Inspectorate.

Documentation Obligation:Not applicable



Excursus: Business Traveller “Classic”POLAND



Responsibility for Compliance & Sanctionsfor Non-compliance:Not applicable

Overview of Mandatory Regulations and Exemptions:— No specific obligation is required for business meetings. — There is no minimum time but it is more difficult to justify the

presence of an Employee for a period of 1 month for purposes of business meetings.

Risk of Detection/Auditing Mechanisms:Low.Radom controls performed by the National Labour Inspectorate.

Documentation Obligation:Not applicable

for 1 month; contract in home country


b) Scenario: Business Traveller “Project”POLAND




Responsibility for Compliance & Sanctionsfor Non-compliance: — Notification obligations of the Employer towards the National

Labour Inspectorate.— Penalty sanction for the Employer for non-compliance with

notification and documentation obligations range from PLN 1,000 (€ 240) to PLN 30,000 (€ 7,200) per violation.

Risk of Detection/Auditing Mechanisms:High.Radom controls performed by the National Labour Inspectorate.

Overview of Mandatory Regulations and Exemptions:An Employer must provide posted Employees with terms of employment no less favourable than those resulting from the Polish labour law regulations. Particular attention should be paid to the occupational health and safety requirements.

Documentation Obligation:If the work on a construction site is performed in connection with the implementation of the contract concluded by the Employer with an entity operating in Poland, this scenario is subject to the following obligations:— Notification of the Labour Inspectorate (before beginning of work)— Appointment of a representative in Poland— Obligation of keeping documentation regarding posted Employees and presenting the

required documents to the Labour Inspector during the period of posting and during 2 years after the completion of work


Excursus: Business Traveller “Project”POLAND




Responsibility for Compliance & Sanctionsfor Non-compliance:— Notification obligations of the Employer towards the National









for 8 months; contract in home country









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for 26 months; contract in home country

Overview of Mandatory Regulations and Exemptions:An Employer must provide posted Employees with terms of employment no less favourable than those resulting from the Polish labour law regulations.

Documentation Obligation:If the work in a client workplace is performed in connection with the implementation of the contract concluded by the Employer with an entity operating in Poland, this scenario is subject to the following obligations:— Notification of the Labour Inspectorate (before beginning of work)— Appointment of a representative in Poland— Obligation of keeping documentation regarding posted Employees and

presenting the required documents to the Labour Inspector during the period of posting and during 2 years after the completion of work



Labour Inspectorate— Penalty sanction for the Employer for non-compliance with

notification and documentation obligations range from PLN 1,000 (€ 240) to PLN 30,000 (€ 7,200) per violation


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The Head of Finance from A GmbH is also the Head of Finance of the subsidiary in the country X



c) Scenario: Business Traveller “Dual Role”POLAND

Overview of Mandatory Regulations and Exemptions:— Registration obligations apply if the current Employer directs the Employee

to work in Poland and perform the work described above. — If such works are done due to the function performed by the Employee in

the Polish entity, no mandatory obligations apply.

Documentation Obligations:If such work is treated as posting an Employee to Poland the following obligations apply:— Notification of the Labour Inspectorate (before beginning of work)— Appointment of a representative in Poland— Obligation of keeping documentation regarding posted Employees and presenting the



Labour Inspectorate— Penalty sanction for the Employer for non-compliance with

notification and documentation obligations range from PLN 1,000 (€ 240) to PLN 30,000 (€ 7,200) per violation

Risk of Detection/Auditing Mechanisms:Medium. Radom controls performed by the National Labour Inspectorate.



SummaryPOLAND


— Poland was among the countries insisting on postponing the date of entering into force the new regulations in order to enableEmployers to become acquainted with the labour laws of host countries.

— Significant changes are expected in the areas of transportation. — The necessity of applying collective labour law agreements to posted Employees will ensure applying comparable

remuneration within given groups. However, in the private sector, collective labour law agreements are not usual. — Due to shortening the time of posting of Employees, it will be urgently necessary to review the secondment agreements in

advance.



Practical RecommendationsPOLAND

During the inspection, special attention is to be paid to compliance with the provisions on working time, good hours and health and safety at work (valid certificates).

Particular attention should be paid to the fact that there are no discrepancies in the documents, in particular regarding the date of commencement of work, remuneration, etc.

Due to the fact that an Employer is obliged, at the request of the National Labour Inspectorate, to make available during the posting the required documents and their translations into Polish not later than within 5 working days from the date of receipt of the request, it is recommended to have all documentation in Polish language as well.

Any information which are covered by the notification submitted to the Labour Inspectorate before beginning of work should be updated within 7 days from the date of their occurrence.

If possible – it is recommended that any violations revealed during the inspection are remediated before the completion of the inspection.

France

Antoine Jouhet

Fidal law firm - France—April 2018


Mandatory Labour Law Requirements: OverviewFRANCE


— Obligation for the Employer to declare the posting and to appoint a legal representative in advance on a specific website. Specific provisions exist for construction work and transportation activities.

— List provided under Art. 1262-4 of the FLC (Discrimination, professional equality, maternity protection and leave, leave for family events, right of strike, hours of work, overtime, holidays, minimum wage, illicit work, health and safety, etc.).

— In case of postings of more than a month, one should add provisions of Art. R. 1262-1 of the FLC (absences for illness or accident), Art. R. 1262-4 of the FLC (bank holidays), Art. R. 1262-7 of the FLC: right to receive equal monthly payment for the same schedule (irrespective of the days effectively worked during the month).


— The Employer and the host company may be ordered jointly to pay taxes and contributions, penalties, reimbursement of public subsidies, payment of remunerations, indemnities relating to the employment.

— Temporary suspension of activity, administrative fine (€ 2,000 per Employee maximum € 500,000), criminal sanctions (3 years of prison and fine up to € 225,000 for legal entity). Potential exclusion from public procurement (“blacklist”).


— The Employer or its legal representative in France must keep various documents available in case of control: immigration documents (if any), document confirming a medical examination (in home country or in France), when assignment lasts more than a month, a document with working time and remuneration, a working time schedule, the letter of appointment of the legal representative in France, documents showing that the Employer carries out a real activity in home country, social security documents. All documents must be translated in French (Art. R. 1263-2 of the French Labour code).


— Not all posted Employees are controlled. Labour Inspection and social security authorities make random controls.

— Specific focus exists on construction work.— Obligation for the welcoming entity to verify that proper

declarations were made. If not, obligation to inform the Labour administration.

Scenarios


a) Scenario: Business Traveller “Classic”FRANCE



Responsibility for Compliance/Sanctions for Non-Compliance:Temporary suspension of activity, administrative fine (€ 2,000 per employee maximum € 500,000), criminal sanctions (3 years of prison and fine up to € 225,000) for legal entity. Potential exclusion from public procurement (“blacklist”).

Overview of Mandatory Regulations and Exemptions: List provided under Art. 1262-4 of the FLC (Discrimination, professional equality, maternity protection and leave, leave for family events, right of strike, hours of work, overtime, holidays, minimum wage, illicit work, health and safety, etc.).

Risk of Detection/Auditing Mechanisms:Low.Random controls by labour inspection and police or social security authorities (“URSSAF”).

Documentation Obligations:No specific obligation (except in case of fraud) is required for business meetings, but it is recommended to be able to demonstrate dates of arrival/return and purpose of presence in France to justify it is only for a very short period of time and for business meetings only (no “productive work”).



Excursus: Business Traveller “Classic”FRANCE


Responsibility for Compliance/Sanctions for Non-Compliance:Temporary suspension of activity, administrative fine (€ 2,000 per Employee maximum € 500,000), criminal sanctions (3 years of prison and fine up to € 225,000) for legal entity. Potential exclusion from public procurement (“blacklist”).

Overview of Mandatory Regulations and Exemptions:List provided under Art. 1262-4 of the FLC (Discrimination, professional equality, maternity protection and leave, leave for family events, right of strike, hours of work, overtime, holidays, minimum wage, illicit work, health and safety, etc.).

Risk of Detection/Auditing Mechanisms:Low.Random controls by labour inspection and police or social security authorities (“URSSAF”).


Documentation Obligations:There is no minimum time but it is more difficult to justify the presence of an Employee for a period of 1 month for purposes of business meetings. If the Employee is effectively posted in France, obligation to declare (via official website) containing specific information before the commencement of work, to appoint a representative in France and record keeping obligations.


Vorführender



b) Scenario: Business Traveller “Project”FRANCE




Risk of Detection/Auditing Mechanisms: High.Random controls by labour inspection and police or social security authorities (“URSSAF”).

Overview of Mandatory Regulations and Exemptions:List provided under Art. 1262-4 of the FLC and Art. R. 1262-1 of the FLC (absences for illness or accident), Art. R. 1262-4 of the FLC (bank holidays), Art. R. 1262-7 of the FLC: right to receive equal monthly payment for the same schedule (irrespective of the days effectively worked during the month).

Documentation Obligations:— Notification online (via official website) before beginning of work— Appointment of a representative in France— Order an individual card for the Employee— Display applicable rules on site with translation for posted Employees — List of documents specified at Art R. 1263-1 of the FLC translated into

French

Responsibility for Compliance/Sanctions for Non-Compliance:Temporary suspension of activity, administrative fine (€ 2,000 per Employee maximum € 500,000), criminal sanctions (3 years of prison and fine up to € 225,000 for) legal entity. Potential exclusion from public procurement (“blacklist”).


Excursus: Business Traveller “Project”FRANCE



Risk of Detection/Auditing Mechanisms:High.Random controls by labour inspection and police or social security authorities (“URSSAF”).

Overview of Mandatory Regulations and Exemptions:Same as previous scenario but the Labour Inspection will verify that the posting is temporary and for a specific project. When the posting lasts more than 24 months, unless otherwise authorised by the administration, the Employee should be subject to French social security regime.


Documentation Obligations:— Notification online (via official website) before beginning of work— Appointment of a representative in France— Order an individual card for the Employee— Display applicable rules on site with translation for posted Employees — List of documents specified at Art R. 1263-1 of the FLC translated into

French







Overview of Mandatory Regulations and Exemptions:List provided under Art. 1262-4 of the FLC and Art. R. 1262-1 of the FLC (absences for illness or accident), Art. R. 1262-4 of the FLC (bank holidays), Art. R. 1262-7 of the FLC: right to receive equal monthly payment for the same schedule (irrespective of the days effectively worked during the month).

Documentation Obligations:— Notification online (via official website) before beginning of work— Appointment of a representative in France— List of documents specified at Art R. 1263-1 of the FLC— List of documents specified at Art R. 1263-1 of the FLC translated into

French— Host company must add info to the Employee’s ledger


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Overview of Mandatory Regulations and Exemptions:Same as previous scenario but the Labour Inspection will verify that the posting is temporary and for a specific project . When the posting lasts more than 24 months, unless otherwise authorised by the administration, the Employee should be subject to French social security regime.

Documentation Obligations:— Notification online (via official website) before beginning of work— Appointment of a representative in France— List of documents specified at Art R. 1263-1 of the FLC— List of documents specified at Art R. 1263-1 of the FLC translated into

French— Host company must add info to the Employee’s ledger



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c) Scenario: Business Traveller “Dual Role”FRANCE


Overview of Mandatory Regulations and Exemptions:Depending on many factors such as:— Who is the Employer? — Where the Employee lives?— Who gives instructions for the job in France?— Are the Employee’s services invoiced by the German entity?

Documentation Obligations:Depends on many factors (see above).

Responsibility for Compliance/Sanctions forNon-Compliance:Temporary suspension of activity, administrative fine (€ 2,000 per Employee maximum € 500,000), criminal sanctions (3 years of prison and fine up to € 225,000) for legal entity. Potential exclusion from public procurement (“blacklist”).



SummaryFRANCE


— It is difficult to assess what will be the main changes but France was at the initiative of the Directive revision.

— It is likely that France will have an extensive conception of the equal pay principle.

— It can be ensured by application of Collective Bargaining Agreements provisions on minimum wages (which often increase the legal minimum wage) and also by comparison with other Employees of the company/group working in France.

— France has an extensive conception of mandatory provisions.

— There is no exhaustive list but for example is generally admitted that CBA and termination rules are in the list.

— However, as regards equal pay, are included only mandatory items specified by the applicable collective bargaining agreement. Annual bonus are generally not mandatory. Collective bargaining agreement also often provide for a seniority condition for the payment of a Christmas allowance.



Practical RecommendationsFRANCE

Carry out online registration and appoint a local representative.

If the Employee works in the construction area, order the individual card in advance.

Prepare and check a folder with documents with free translation in French on a case by case basis.

Communicate guidelines to the Employee to verify he/she knows how to react in case of control.

Prepare a specific document for any situation other than business trips.

Prepare a French “shadow” payroll for any job posting of more than a month.

Anticipate posting situations which could last for more than 12 months after new directive entry in force.

Denmark

Pernille Paisen Daida Hadzic

KPMG Acor Tax, Denmark—April 2018


Mandatory Labour Law Requirements: OverviewDENMARK


— The Employer must notify and register their services and posted Employees in Denmark with in the Register of Foreign Service Providers (RUT) before the start of work in Denmark.

— When registered in RUT, the Employer will be requested the payment of a minor contribution to the Labour Market Fund for Posted Workers (AFU) on quarterly basis.

— Employers must meet the minimum requirements with the respect to working environment (including maximum working hours, rest period, etc.).

— No general statutory minimum wage— Prohibition against discriminatory treatment with respect to age, disability,

race.— Equal payments to men and women — 25 days paid annual holidays if the Employee has been employed in the

previous calendar year and payment of holiday allowance.


— Employers located in EEA area are responsible to uphold the requirements. However, Danish companies that receive the services by the posted Employees can be held responsible for Employees’ obligations and responsibilities.

— Failure to register in RUT can cost DKK 20,000 (€ 2,700) per violation.

— Sanctions for failure to uphold the other required stipulations under the Employment Law are decided upon individually.


— RUT registration entails the registration of the following information electronically:- company information - information about each Employee - information about social security coverage for each Employee

(optional: upload of A1-certificate)- duration of workplace of work

— The Employer must provide assignor with the documentation for the registration in RUT.

— The Labour Inspectorate may require other forms of documentation, if they decide to check other conditions, e.g. maximum working hours, etc.


— The Labour Inspectorate monitors the compliance with the Law regarding posted workers.

— The Ministry of Employment is the responsible authority for the implementation of the EU Posting Directive etc.

Scenarios


a) Scenario: Business Traveller “Classic”DENMARK




Risk of Detection/Auditing Mechanisms:Not applicable

Overview of Mandatory Regulations and Exemptions:None




Excursus: Business Traveller “Classic”DENMARK


Overview of Mandatory Regulations and Exemptions:None







b) Scenario: Business Traveller “Project”DENMARK




Responsibility for Compliance & Sanctionsfor Incompliance:— The Employer is responsible. — Failure to comply with registration obligation in RUT is fined with

up to DKK 20,000 (€ 2,700).

Risk of Detection/Auditing Mechanisms:High.The Labour Inspectorate tends to focus on inspecting constructing sites more than other working sites.

Overview of Mandatory Regulations and Exemptions: — Respect of minimum working conditions (working hours, payment,

annual leave, non-discrimination, equal pay). — No general statutory minimum wage, but collective agreement in

certain branches.

Documentation Obligations:— The Employer must comply with the registration obligations (RUT)

and pay a contribution to AFU. — The registration in RUT is digital and it is not mandatory to submit

documentation, unless upon request.


Excursus: Business Traveller “Project”DENMARK





up to DKK 20,000 (€ 2,700).

Risk of Detection/Auditing Mechanisms:High.The Labour Inspectorate tends to focus on inspecting constructing sites more than other working sites.



certain branches.


and pay a contribution to AFU. — The registration in RUT is digital and it is not mandatory to submit






up to DKK 20,000 (€ 2,700).

Risk of Detection/Auditing Mechanisms:High.The Labour Inspectorate increases a focus on IT sector, due to high number of foreign Employees in this sector.



certain branches.


pay a contribution to AFU. — The registration in RUT is digital and it is not mandatory to submit



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Responsibility for Compliance & Sanctions for Incompliance:— The Employer is responsible. — Failure to comply with registration obligation in RUT is fined with

up to DKK 20,000 (€ 2,700). — Failure to comply with Danish employment law is sanctioned

individually.

Risk of Detection/Auditing Mechanisms:The risk is high as the Labour Inspectorate increases a focus on IT sector, due to high number of foreign workers in this sector.

Overview of Mandatory Regulations and Exemptions:— Respect of minimum working conditions (working hours, payment,


certain branches.

Documentation Obligations:— The Employer must comply with the registration obligation in RUT

and pay a contribution to AFU.— Information submitted in RUT must be supported by

documentation if the Labour Inspectorate requests it. In order to comply the Danish employment law, the Employer must have contracts, payslips, calendars available.

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c) Scenario: Business Traveller “Dual Role”DENMARK

Responsibility for Compliance & Sanctions for Incompliance:The Danish company.

Risk of Detection/Auditing Mechanisms:Moderate.However, the Tax Authorities might request a detailed review.

Overview of Mandatory Regulations and Exemptions:Individual assessment of the connection to the home country and Denmark respectively.

Documentation Obligations:Contracts, payslips, calendars.



SummaryDENMARK


— Minimum wage in Denmark is not regulated by law.

— The equal payments are therefore compared on the basis of the collective agreements for that specific type of business and position.

— It is uncertain which other elements of a collective agreement will fall under payments and will therefore be guaranteed to the posted Employees, too.



Practical RecommendationsDENMARK

The registration in RUT must be properly done and in time (before the commencement of work and at the beginning of the work at the latest) .

To prevent auditing, make sure to be compliant with regulations before commencement of work. Be transparent towards authorities.

It is important to notify RUT of any changes.

Postings under two years would imply a closest connection to the home country, postings over two years will fall completely under local employment law. Make an assessment of whether local employment law applies in full for posting over 1 year.

Spain

Elisabeth Fernández Canseco

KPMG Spain—April 2018


Mandatory Labour Law Requirements: OverviewSPAIN


According to the Law 45/199 of November 29, the main legal requirements are:— Communication to the Labour Authority prior to the provision

of services— Additional requirements for companies in the construction

sector— Notification to the Labour Authority of the Autonomous

Community about any health damage suffered by the Employee

— Minimum working conditions— Special consideration to Temporary work agencies

Responsibility for Compliance & Sanction for Incompliance

— Any Employer located in an EU country or in any country which is part of the European Economic Area is responsible.

— The sanctions depend on the severity of the infringement ranging from € 60 to € 187,515.

— A Employer located in Spain that posts Employees to any other EU country cannot be sanctioned for an infringement that has already been sanctioned in the host country.


— Communicate to the Labour Authority: (i) identification of the companies posting Employees will work for; (ii) initial date and length of the posting; (iii) the services to be provided by the posted Employees; (iv) an Employer’s representative in Spain for notification purposes; and (v) an Employer’s representative for the management of those issues that affect posted Employees.

— Keep available in the work place: the employment contracts, the payrolls and payment receipts and the working hours record.


— The Labour Inspectorate is entitled to carry out whatever checking activities in order to ensure the compliance with the Law.

— For guidance purposes, the Ministry of Employment and Social Security has issued a communication on the criteria to assess a posted Employee situation (Technical Criteria 97/2016).

Scenarios


a) Scenario: Business Traveller “Classic”SPAIN



Risk of Detection/Auditing Mechanisms:The Labour Inspectorate is entitled to carry out whatever checking activities in order to ensure the compliance with the Law. In addition, the Ministry of Employment and Social Security has issued a communication on the criteria to assess a posted Employee situation (Technical Criteria 97/2016).

Documentation Obligation:The Employer has the obligation to keep available in the workplace or in electronic form the employment contracts, the payrolls and payment receipts, the working hours record and the work permits.

Responsibility for Compliance & Sanctions for Non-Compliance:— Any Employer located in an EU country or in any country which is part of

the European Economic Area is affected and responsible. — The sanctions depend on the severity of the infringement ranging from €

60 to € 187,515.

Overview of Mandatory Regulations and Exemptions:— Except in the case of temporary work agencies, as the length of the

posting is less than 8 days, there is no registration obligation.— Regarding working conditions, the Employer must comply with the working

conditions except with the wage and minimum annual paid holidays obligations.



Excursus: Business Traveller “Classic”SPAIN




60 to € 187,515.

Overview of Mandatory Regulations and Exemptions:— As the length is more than 8 days the Employer has registration

obligations. — In fact, the Company must comply with all mandatory regulations

(registration obligations, working conditions, etc.).

Documentation Obligations:The Employer must comply with: — The communication obligation— Keep available in the workplace the employment contracts, the

payrolls and payment receipts, the working hours record



for 1 month; contract in home country


b) Scenario: Business Traveller “Project”SPAIN






60 to € 187,515.


Overview of Mandatory Regulations and Exemptions:The Employer must comply with all mandatory regulations (registration obligations, working conditions, etc.) and, in addition, if the Employer is a subcontractor, it must comply with the specific regulation for construction services of subcontractors.

Documentation Obligations:— The Employer must comply with the communication obligation and keep

available in the workplace the employment contracts, the payrolls and payment receipts, the working hours record.

— In addition, the Employer must comply with the additional requirements for construction services for subcontractors including the register in the Accredited Company Registry.


Excursus: Business Traveller “Project”SPAIN






60 to € 187,515.


Overview of Mandatory Regulations and Exemptions:— The Employer must comply with all mandatory regulations (registration

obligations, working conditions, etc.) and, in addition, if the Employer is a subcontractor, it must comply with the specific regulation for construction services of subcontractors.

— In addition, after two years of posting, the Employee will lose the social security protection of home country.

Documentation Obligations:— The Employer must comply with the communication obligation and keep

available in the workplace the employment contracts, the payrolls and payments receipts, the working hours record.

— In addition, the Employer must comply with the additional requirements for construction services for subcontractors including the register in the Accredited Company Registry.







60 to € 187,515.


Overview of Mandatory Regulations and Exemptions:The Employer must comply with all mandatory regulations (registration obligations, working conditions, etc.).

Documentation Obligations:The Employer must comply with all documentation obligations:— The communication obligation— Keep available in the workplace the employment contracts, the


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Responsibility for Compliance & Sanctions for Non-Compliance:— Any Employer located in a EU country or in any country which is part of


60 to € 187,515.


Overview of Mandatory Regulations and Exemptions:— The Employer must comply with all mandatory regulations

(registration obligations, working conditions, etc.). — In addition, after two years of posting, the Employee will lose the

social security protection of home country.

Documentation Obligations:The Employer must comply with all documentation obligations:— The communication obligation— Keep available in the workplace the employment contracts, the



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c) Scenario: Business Traveller “Dual Role”SPAIN


the European Economic Area is affected and responsible. — The sanctions depend on the severity of the infringement ranging from

€ 60 to € 187,515.


Overview of Mandatory Regulations and Exemptions:The Employer must comply with all mandatory regulations (registration obligations, working conditions, etc.) provided that the posting has a length of more than 8 days.

Documentation Obligations:The Employer has the obligation to keep available in the workplace or in electronic format the employment contracts, the payrolls and payment receipts, the working hours record and the work permits. If the length is more than 8 days, the Employer must comply with all documentation obligations.



SummarySPAIN


— The Spanish regulation is quite limited as no Bylaw has been elaborated. Mandatory regulations to be applicable are those related with the working conditions and those related to fundamental rights such as non-discrimination. Those regulations apply to all posted Employees as of the first day of work carried out in Spain.

— In addition, those Employers which work in construction area as subcontractors must comply with additional regulations. Moreover, temporary work agencies must comply with additional legal requirements and with the specific regulation on temporary work agencies.

— The principle of equal pay will be ensured by the mandatory application of the Workers Statute and the different Collective Bargaining Agreements regarding minimum working conditions.

— As Spain usually has lower salaries than other European countries, those posted Employees with a higher salary (or better working conditions) in the home country will be entitled to maintain such remuneration instead of the corresponding to Spanish regulations.

— It is expected that the revision of the Directive will lead Spain to the elaboration of a specific Bylaw.— Regarding bonuses and extraordinary payments, it is expected to be paid depending on the accrual periods. A bonus which accrual period is the whole

year it is expected to be paid on a pro rata basis as both concepts are part of the remuneration. However, for other benefits such as Christmas pack it is expected that the Employee will only be entitled to them if he/she remains as an Employee at the date of payment.

— The above working conditions applicable in Spain to posted Employees apply regardless of whether they are applicable in home country unless they are less favourable.



Practical RecommendationsSPAIN

The communication to the Labour Authority must be properly done and ensured. It is important for the Employer to implement a control mechanism in order to ensure the requirements.

It is advisable to be as much as guarantee-oriented as possible with the most favourable working conditions.

As there is no Bylaw on posting of Employees in Spain, in the case of usually posted Employees for a variable period of time (Scenario C), it is advisable to make the communication to the Labour Authority every time the Employee is posted for more than 8 days.

In order to decide to which Labour Authority the Employer has to send the communication, it is important to determine the Autonomous Community where the Employee will work with special consideration of the autonomous cities of Ceuta and Melilla.

Despite there is no specific regulation, it is advisable to formalise a local host contract after a year of service according to the Social Security European Regulations.

Austria

Martin Huger

GARGER SPALLINGER HUGER Rechtsanwälte GmbHApril 2018


Mandatory Labour Law Requirements: OverviewAUSTRIA


— LSD-BG, AÜG, GewO, MeldeG, FPG/NAG, AuslBG— Reporting (only in electronic form) prior to commencement of

work to Central Coordinating Agency (ZKO 3/ZKO 4)— Mandatory entitlement to remuneration determined by law,

ordinance or collective agreement— Mandatory entitlement to paid annual leave— Maximum working times and minimum rest periods, including

the respective provisions in collective agreements


— The Employer is responsible for compliance (in case of a legal entity: managing directors are personally liable).

— Special responsible representative may be appointed.— Possible Sanctions in case of non-compliance:

- Administrative fines up to € 50,000 for each Employee- Prohibition of services up to 5 years- Risk to be set on a “blacklist”- Provisional security deposit- Payment freeze – security deposit- Claim to applicable minimum wage


— Obligation to keep certain documents ready for presentation (in German: A1, ZKO 3/ZKO 4, working time records, pay slips, wage records, proof of payment, documents relating to the pay categorisation; in English sufficient: employment contract).

— The Employer is in charge of documentation obligation; in case of cross-border temporary agency work the Austrian user is in charge of the documentation obligation.

— Contact person (either a person among the posted Employees or a person established in Austria and authorised to professionally represent the parties) has to be named in ZKO.


Competent authorities audit the compliance with the provisions of the LSD-BG:— during the registration process— ad hoc audits on site by the finance police— during social security audits by the State social security

fund

Scenarios


a) Scenario: Business Traveller “Classic”AUSTRIA



Responsibility for Compliance & Sanctions for Non-Compliance: Not applicable if an exemption applies.

Overview of Mandatory Regulations and Exemptions?Exemption applies if cross-border activity involving few hours for a brief period (business meetings without rendering any other services); approx. 5 days maximum and only in allowed exceptional cases. Whether exemption applies must be assessed on case by case basis.

Risk of Detection/Auditing Mechanisms:Not applicable if an exemption applies.Documentation Obligation:

Not applicable if exemption applies.



Excurses: Business Traveller “Classic”AUSTRIA


Responsibility for Compliance/Sanctions for Non-Compliance: — Liability of the Employer— Administrative fines (see overview)

Overview of Mandatory Regulations and Exemptions:— Exemption for small temporary tasks does not apply— Remuneration (by law or collective agreement), paid annual leave

(see entitlements in overview)— Reporting obligation ZKO 3 / ZKO 4

Risk of Detection/Auditing Mechanisms:Medium.Auditing mechanisms (see overview).

Documentation Obligations:In German language: A1, ZKO 3/ZKO 4, working time records, pay slips, wage records, proof of payment, documents relating to the pay categorisation; in English sufficient: employment contract.




AUSTRIA





Risk of Detection/Auditing Mechanisms:Very High.Auditing mechanisms (see overview).

Overview of Mandatory Regulations and Exemptions:Remuneration (by law or collective agreement), paid annual leave, max. working hours and minimum rest periods. (see overview: entitlements and mandatory provision).Reporting obligation ZKO 3 / ZKO 4

Documentation Obligations:In German language: A1, ZKO 3/ZKO 4, working time records, pay slips, wage records, proof of payment, documents relating to the pay categorisation; in English language sufficient: employment contract.

b) Scenario: Business Traveller “Project”


AUSTRIA



Responsibility for Compliance/Sanctions for Non-Compliance: — Liability of the Employer.— Administrative fines (see overview)

Risk of Detection/Auditing Mechanisms:Very High.Auditing mechanisms (see overview).



Excurses: Business Traveller “Project”

Overview of Mandatory Regulations and Exemptions:Remuneration (by law or collective agreement), paid annual leave (see entitlements in overview).Reporting obligation ZKO 3 / ZKO 4


Excursus: Business Traveller “Project”AUSTRIA







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Excursus: Business Traveller “Project”AUSTRIA



Responsibility for Compliance/Sanctions for Non-Compliance: — Liability of the Employer.— Administrative fines (see overview)




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The Head of Finance from A GmbH is also the Head of Finance of the subsidiary in Austria



c) Scenario: Business Traveller “Dual Role”AUSTRIA

Responsibility for Compliance/Sanctions for Non-Compliance: Not applicable if an exemption applies

Risk of Detection/Auditing Mechanisms:Not applicable if an exemption applies

Overview of Mandatory Regulations and Exemptions:— Exemption may apply, if

- Small, temporary tasks in Austria and monthly gross remuneration of at least 125% of thirty times the maximum contribution base per calendar year (2018: € 6,412.50); or

- Group-internal temporary posting of particularly skilled worker if the total posting does not exceed a length of two months within a calendar year and take place for the purpose financial controlling

— Each case to be clarified individually.

Documentation Obligations:Not applicable if an exemption applies



SummaryAUSTRIA


— Austrian law provides already for entitlement to at least the remuneration determined by law, ordinance or collective agreement (including overtime payments, etc.).

— If a law, ordinance or collective agreement provide for special payments, posted Employees are entitled to such special payment on a pro-rated basis.

— Reform of the Directive may only require minor amendments of Austrian law.

— Once the Directive is implemented in Austrian law, it should be considered concluding local contract in case of longer postings (after a maximum period of 18 months).



Practical RecommendationsAUSTRIA

Identify temporary activity in Austria or posting/transfer before coming to Austria.

Under current legal situation a local employment contract may be considered to avoid procedures and risk of wrong qualification (posting/temporary employment).

Comply with registration obligations (only in electronic form) prior to the commencement of work to the Central Coordinating Agency (ZKO 3/ZKO 4).

After implementation of the revised Directive local employment contracts may be particularly recommended in case of longer postings (e.g. more than 18 months).

Comply with documentation obligation ready for presentation.

Belgium

Soetkin Lateur

K law - Belgium—April 2018


Mandatory Labour Law Requirements: OverviewBELGIUM


Act of 5 March 2002 on the labour, wage and employment conditions in case of posting of Employees to Belgium: — Compliance with labour, wage and employment conditions of

which non-compliance is criminally sanctioned (e.g. remuneration including benefits granted at a sectorial level, working time, health and safety, etc.)

— As of the first day of work carried out in Belgium (save exception for first installation of goods)

— Conclusion of an addendum to the employment contract— Appointment of a person who liaises with the competent

authorities

Responsibility for Compliance & Sanction for Incompliance

— Employer (posting company) is solely liable— Criminal and administrative sanctions as determined

by the Social Penal Code in breach of labour, wage and employment conditions

— Specific sanctions related to posting of Employees (non-compliance with obligation to appoint representative and non-compliance with obligation to keep documents: criminal fine of € 400 to € 4,000 or administrative fine of € 200 or € 2,000 per Employee involved


— Copy of the employment contract, time sheets indicating the beginning, end and duration of the daily working time of the posted Employee, proof of payment of the salary of the posted Employees

— Translation in Dutch, French, German or English upon request of the social inspection


— Combatting international social dumping is a top priority of the Belgian social inspection. In this context, posting of Employees is often subject to controls. Sectors that are controlled more due to sector-specific measures: construction, cleaning, security, transport, agriculture, electro-technical.

Scenarios


BELGIUM



Responsibility for Compliance/Sanctions for Non-Compliance: Employer (home company).

Overview of Mandatory Regulations and Exemptions?— Mandatory rules apply as of the first day of work carried out in

Belgium.— Appointment of representative.

Risk of Detection/Auditing Mechanisms:Low.Taking into account the short duration and of the meeting does not take place in one of the risk sectors.

Documentation Obligation:Exempted insofar maximum 60 working days per calendar year in Belgium and insofar maximum 20 consecutive working days in Belgium

a) Scenario: Business Traveller “Classic”



BELGIUM



Overview of Mandatory Regulations and Exemptions:— Mandatory rules apply as of the first day of work carried out in


Risk of Detection/Auditing Mechanisms:Low. Insofar the posting does not concern one of the risk sectors.

Documentation Obligations:Copy of employment contract, etc.

Excurses: Business Traveller “Classic”



Vorführender



BELGIUM




Responsibility for Compliance/Sanctions for Non-Compliance: — Employer (home company).— But: joint liability for main contractor for payment of remuneration.

Risk of Detection/Auditing Mechanisms:High.In the construction sector.


Belgium— Appointment of representative.






Responsibility for Compliance/Sanctions for Non-Compliance: — Employer (home company).— But: joint liability for main contractor for payment of remuneration.

Risk of Detection/Auditing Mechanisms:High:In the construction sector.




BELGIUM







Risk of Detection/Auditing Mechanisms:Low.Insofar the posting does not concern one of the risk sectors.




BELGIUM


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Risk of Detection/Auditing Mechanisms:Low.Insofar the posting does not concern one of the risk sectors.





BELGIUM


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The Head of Finance from A GmbH is also the Head of Finance of the subsidiary in Belgium



BELGIUM

Responsibility for Compliance/Sanctions for Non-Compliance: Employer


Overview of Mandatory Regulations and Exemptions:Employment in multiple countries. Not a temporary situation/posting, hence, mandatory Belgian labour law applicable as of first working day.

Documentation Obligations:Partial employment in Belgium, hence all mandatory documentation obligations apply.

c) Scenario: Business Traveller “Dual Role”



SummaryBELGIUM


— Mandatory Belgian labour law will apply entirely to postings exceeding 12 months (with possibility to extend this to postingsexceeding 18 months).

— Procedures, formalities and conditions of the conclusion and termination of the employment contract, including non-competition clauses, will continue to not apply, neither will complementary pension schemes.

— The notion of “remuneration” will not have an impact in Belgium, as currently the non-payment of any remuneration element is subject to criminal sanctions and therefore needs to be paid as of the first day of work carried out in Belgium.

— As currently, mandatory Belgian labour law applies as of the first day of work carried out in Belgium insofar subject to criminal sanctions, and as to a large extent non-compliance with Belgian labour law is criminally sanctioned, the impact of the revised Posting of Workers Directive is expected to be minor in Belgium.




Be aware that most requirements apply as of the first day of work of the posted Employee and that therefore it is recommended to seek advice prior to the posting.

Contacting a local labour law and social security law expert to ensure compliance with both labour law and social security law requirements.

Draft an addendum to the employment contract with regards to the posting, setting forth notably the remuneration conditions during the posting.

BELGIUM

United Kingdom

Dorothée Giret

KPMG United Kingdom —April 2018


Mandatory Labour Law Requirements: OverviewUK


— No employment law registration requirements in relation to posted worker status – general employment law principles apply

— Working time (Working Time Regulations 1998)— Minimum wage (National Minimum Wage Act 1998)— Health, safety and hygiene at work (Health & Safety at Work

etc Act 1974)— Non-discrimination (Equality Act 2010)— Protection of pregnant workers (Management of Health &

Safety at Work Regulations 1999 and Employment Rights Act 1996)


— Not applicable in relation to posted worker status –general employment law principles apply

— Employers are responsible for their compliance with mandatory requirements.

— Employees may bring a claim in the employment tribunal to seek compensation.


— Generally speaking, an Employer is required to provide UK Employees with a statement of terms of employment within 2 months of the start of their employment.


— The Tax Authorities (HMRC) will enforce national minimum wage compliance.

— The Health & Safety Executive may enforce health and safety breaches.

— No specific authority in relation to posted workers

Scenarios


a) Scenario: Business Traveller “Classic”UK



Overview of Mandatory Regulations and Exemptions?No employment law registration requirements in relation to posted worker status Unlikely to be engaged – see home country rules on applicable law, jurisdiction and statutory employment law rights. Employment law position is separate to any tax obligations and rules in relation to Short Term Business Visitors

Documentation Obligation:We recommend that the Employee’s home country employment contract references international travel.

Responsibility for Compliance/Sanctions for Non-Compliance: Unlikely to be applicable in this scenario but otherwise Employer and Employee, HMRC and HSE.

Risk of Detection/Auditing Mechanisms:— Low risk— The Tax Authorities (HMRC) will enforce national minimum wage

compliance. — The Health & Safety Executive may enforce health and safety

breaches.



Excursus: Business Traveller “Classic”UK


Responsibility for Compliance/Sanctions for Non-Compliance: Unlikely to be applicable in this scenario but otherwise Employer and Employee, HMRC and HSE.

Overview of Mandatory Regulations and Exemptions:No employment law registration requirements in relation to posted worker status Unlikely to be engaged or unlikely to be a risk in practice – see home country rules on applicable law, jurisdiction and statutory employment law rights (minimum mandatory rights probably likely to already be provided).Employment law position is separate to any tax obligations and rules in relation to Short Term Business Visitors Risk of Detection/Auditing Mechanisms:

— Low risk— The Tax Authorities (HMRC) will enforce national minimum wage


breaches.

Documentation Obligations:Recommend that the Employee’s home country contract deals with international travel requirements and what terms apply during travel.




UK




Responsibility for Compliance & Sanctionsfor Non-Compliance: Employer and Employee, HMRC and HSE.

Overview of Mandatory Regulations and Exemptions:— No employment law registration requirements in relation to posted worker

status — UK employment law mandatory provisions apply plus specific

provisions for construction workers. — Additional protections (i.e. unfair dismissal) may apply –

dependent on the circumstances.

Documentation Obligations:We recommend that an assignment letter confirms the terms that apply to the employment while the Employee is based in the UK.


Risk of Detection/Auditing Mechanisms:— The Tax Authorities (HMRC) will enforce national minimum wage


breaches.


UK




Responsibility for Compliance & Sanctions for Non-Compliance: Employer and Employee, HMRC and HSE.



breaches.

Overview of Mandatory Regulations and Exemptions:— No employment law registration requirements in relation to posted

worker status — UK employment law mandatory provisions apply plus specific

provisions for construction workers. — Additional protections (i.e. unfair dismissal) may apply –


Documentation Obligations:We recommend that a more detailed assignment letter confirms the terms that apply to the employment while the Employee is based in the UK.



UK





breaches.


worker status — UK employment law mandatory provisions apply. — Additional protections (i.e. unfair dismissal) may apply –


Documentation Obligations:We recommend that a more detailed assignment letter confirms the terms that apply to the employment while the Employee is based in the UK, as well as an inter-company agreement between A GmbH and its client.



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Excursus: Business Traveller “Project”UK




worker status — UK employment law mandatory provisions apply. — Additional protections (i.e. unfair dismissal) may apply –


Documentation Obligations:We recommend that a more detailed assignment letter confirms the terms that apply to the employment while the Employee is based in the UK, as well as an inter-company agreement between A GmbH and its client.




breaches.

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The Head of Finance from A GmbH is also the Head of Finance of the subsidiary in the country UK



c) Scenario: Business Traveller “Dual Role”UK

Risk of Detection/Auditing Mechanisms:— Low risk— The Tax Authorities (HMRC) will enforce national minimum wage


breaches.

Overview of Mandatory Regulations and Exemptions:— No employment law registration requirements in relation to posted worker

status— UK employment law mandatory provisions may apply when individual is in

the UK — Additional protections (i.e. unfair dismissal) may apply while she/he is in

the UK– dependent on the circumstances.

Documentation Obligations:We recommend that the Employee’s home country contracts deals with international travel requirements and what terms apply during travel. We also recommend inter-company agreements are put in place for the re-charge of costs.


Any Expected Changes to the Current Legal Regime


SummaryUK

Summary

Impact of Brexit

— Unlikely to be any changes in future (including in relation to Brexit) – not a priority area for change and any requirements arealready incorporated in UK employment law.

— Greater impact may come from changes to immigration rules (rather than employment laws).



Practical RecommendationsUK

Check your home country employment contract terms.

Always double check that the template contract you are using is appropriate.

Inform the Employee in writing as to what terms apply during any period spent abroad.

Don’t forget to obtain tax and social security advice at the same time as employment law advice.

For extended stays in the UK (i.e. more than business traveller), obtain advice on UK employment law rights and obligations.

Think about tax and employment issues (including what happens on termination of employment) before the start of the international travel.

Switzerland

Sebastien Jauslin

KPMG Switzerland—April 2018


Mandatory Labour Law Requirements: OverviewSWITZERLAND


— The Employer must comply with the working and salary conditions required by Swiss federal acts, Federal Council ordinances, standard and collective agreements which have been declared generally applicable.

— The Swiss reference salary, work and rest periods (45-50 hours depending on industry), minimum annual paid holiday and occupational health and safety conditions must be observed.

— On top of the Swiss reference salary, the Employer must pay the Employee the expenses for travel, housing and meals effectively occurring (against receipts) or monthly lump sums depending on the canton of work.

— An authorisation for Sundays, night shifts and continuous work is required (if applicable and necessary for the concrete working scheme).

— Non-discrimination namely equal treatment for women and men are to be observed.


— The Employer is responsible for compliance.— Sanctions have recently increased.— Administrative fines: CHF 5,000 (€ 4220) to CHF

30,000 (€ 25,280).— Bans/prohibitions to post Employees to Switzerland in

the worst case scenarios (1 to 5 years).— State Secretariat for Economy (SECO) publishes a

public list of the sanctioned companies (reputation).


— Valid Work Authorisation for the duration of assignment (Online notification/Work permit)

— Working time table (dates, times, breaks, etc.)— Proof of assignment allowances and reimbursement of

assignment costs (covered by Home or Host Company)


— Audits: random labour-market inspections on site— Business travellers without work authorisation and

under strict conditions (grey area)

Scenarios


SWITZERLAND



Responsibility for Compliance & Sanctions for Non-Compliance: The Employer needs to make sure the EU BT holds valid work authorisation if required for the activities to be preformed in Switzerland.

Overview of Mandatory Regulations and Exemptions?A “Business Visit” is generally a short-term trip taken to conduct business activities for which work authorisation is not necessarily required in Switzerland (grey area subject to interpretation).

Risk of Detection/Auditing Mechanisms:Based on random labour-market inspections Authorities have discretion to decide whether work authorisation is required or not for the specific business activities.

Documentation Obligation:— Valid work authorisation if required (i.e. Online Notification).— If not required: proof that activities are limited to what is allowed as

a “business visitor”.

a) Scenario: Business Traveller “Classic”



Excurses: Business Traveller “Classic”SWITZERLAND


Responsibility for Compliance/Sanctions for Non-Compliance: — The Employer needs to make sure the EU BT holds valid work

authorisation if required for the activities to be preformed in Switzerland.

— Sanctions: Employer obliged to provide evidence.

Overview of Mandatory Regulations and Exemptions:— Mandatory regulations— Exemptions: depending on activities performed in Switzerland

Risk of Detection/Auditing Mechanisms:— Work permit application or random labour-market inspections on

site.

Documentation Obligations:— Work authorisation if required (Online notification/Work permit).— Minimum salary requirements (i.e. CoA, pay slips, etc.).— Reimbursement of assignment costs (i.e. expense compensation

payment).




b) Scenario: Business Traveller “Project”SWITZERLAND



Responsibility for Compliance & Sanctionsfor Non-Compliance: — The Employer needs to make sure the EU BT holds valid work

authorisation for the activities to be preformed in Switzerland.— Sanctions: Employer obliged to provide evidence.

Risk of Detection/Auditing Mechanisms:Work permit application or random labour-market inspections on site.


Overview of Mandatory Regulations and Exemptions:— Mandatory regulations/Collective Labour Agreement— Exemptions: not applicable

Documentation Obligations:— Work authorisation (Online notification/Work permit)— Minimum salary requirements (i.e. CoA, pay slips, etc.)— Reimbursement of assignment costs (i.e. expense compensation

payment)— National Collective Agreement for the main construction sector in

Switzerland or any other applicable Collective Agreement


Excursus: Business Traveller “Project”SWITZERLAND




Responsibility for Compliance & Sanctionsfor Non-Compliance: The Employer needs to make sure the EU BT holds valid work authorisation for the activities to be preformed in Switzerland.




payment)— National Collective Agreement for the main construction sector in

Switzerland or any other applicable Collective Agreement








Documentation Obligations:— Work authorisation (Online notification/Work permit)— Minimum salary requirements (i.e. CoA, pay slips etc.)— Reimbursement of assignment costs (i.e. expense compensation

payment)— Collective Agreement on Telecommunication Installation or any

other applicable Collective Agreement

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payment)— Collective Agreement on Telecommunication Installation or any

other applicable Collective Agreement

123






c) Scenario: Business Traveller “Dual Role”SWITZERLAND

Responsibility for Compliance & Sanctionsfor Non-Compliance: Posting Employer needs to make sure the EU BT holds valid work authorisation for the activities to be preformed in Switzerland.


Overview of Mandatory Regulations and Exemptions:— Mandatory regulations/Collective labour Agreement— Exemptions: not applicable


payment)

Any Expected Changes to the Current Legal Regime


SummarySWITZERLAND

Expected changes to the current legal regime

— Cantonal practice with regard to the applicable Swiss Reference Salary may be subject to change (i.e. German-speaking Cantons usually use the Federal Online Tool whereas French-speaking Cantons usually use their own Cantonal Online Tool).

— Cantonal practice with regard to reimbursement of the costs that are directly related to the assignment (i.e. food, accommodation and travel) is always subject to change.

— Some Cantons apply specific thresholds (i.e. CHF 3,000 (€ 2525) per month in Canton Zürich).— Some Cantons require reimbursement of the effective costs (i.e. upon presentation of proof of payment in Canton Geneva).— Some Cantons apply the Federal Directives issued by the State Secretariat for Economic Affairs SECO (i.e. CHF 190 (€ 160) per day

must be paid to cover food and accommodation costs in Canton Vaud).



Practical RecommendationsSWITZERLAND

Employer to assess immigration/employment regulations in Switzerland before posting of Employees.

Answer requests from the Authorities in a timely manner to facilitate the approval process and avoid harming the Company’s reputation.

Make sure all immigration/employment requirements in Switzerland are in place before posting of Employees.

Protect Employees and brand reputation from warnings, bans, penalties, sanctions, fines and ensure business continuity by avoiding rejections or other actions from local Authorities .

Comply with immigration/employment requirements in Switzerland when requesting work authorisations as this will facilitate the approval process (i.e. Confirmation of Assignment structure).

Be prepared for immigration/employment random audits or inquiries from local Authorities and raise leadership awareness of immigration/employment compliance and risks.

Apply immigration/employment requirements in Switzerland from day 1 and throughout the entire assignment duration as this will avoid complications with the local Authorities.

Germany

Sachka Stefanova-BehlertKPMG Law Rechtsanwaltsgesellschaft mbH, Germany—April 2018


Mandatory Labour Law Requirements: OverviewGERMANY


— According to the AEntG, the mandatory working conditions regardless of the industry are: minimum wage, minimum paid-leave, max. working time, conditions for employee leasing, workplace safety and hygiene, safety regulations for pregnant women and children, anti-discrimination and equal treatment.

— There is a national minimum wage of currently 8,84 €. — In various sectors, generally binding collective bargaining agreements (CBAs)

exist with specific mandatory working conditions, e.g. higher minimum wages, overtime pay and holiday pay, etc.

— Two sources of notification obligations: they exist either with regard to the minimum wage or posting of employees and are only required in sectors qualified as “risky” or “sensitive”, in particular: (i) setup and dismantling trade fairs, (ii) construction sector, (iii) meat industry, (iv) forestry sector, (v) hotel and restaurant sector, (vi) cleaning services, (vii) transportation, (viii) exhibitor trades, (ix) waste management industry, (x) security services, etc.


— The Employer may be fined for non-compliance with mandatory working conditions as well as for a breach of retaining- and registration obligations. Various Acts lay down the applicable fees (e.g. MiLoG for non-compliance with minimum wage or ArbZG for non-compliance with working time rules).

— Sanctions are possible: up to € 30,000 per violation, up to € 500.000 for non-compliance with minimum wage, up to € 15.000 for non-compliance with maximum working hours.

— Further sanctions may apply in the case of Employee leasing.

— Employers fined with a sanction of € 2,500 or more may be excluded from participation in public tenders temporarily.


If the above sectors are concerned, — the Employer posting Employees must make an electronic

notification to the competent Labour Authority (“Zoll”).— the Employer must record the daily working time one week

after the particular work day at the latest and retain the records for 2 years.

— the Employer also needs to retain the following documents in German language: employment contract, time sheets, pay slips and proof of remitted remuneration. Upon request of the Authority, these documents must be presented at the place of work in Germany.


High:— Controls of compliance with minimum wage and any other

requirements within sensitive sectors (currently in the construction sector and hotel sector) or any other pay low pay sector.

Medium up to Low:— In any other sectors for the time being and in the course of

companies’ audits— Controls and sanctions are temporarily suspended within the

sector of transit transportation, due to the legal uncertainty if the national minimum wage is compliant with European law for sheer transits through Germany.

Scenarios


a) Scenario: Business Traveller “Classic”GERMANY



Responsibility for Compliance/Sanctions for Non-Compliance:Sanctions for non-compliance with working conditions: e.g. up to €500.000 for non-compliance with minimum wage, up to € 15.000 for non-compliance with maximum working hours.

Overview of Mandatory Regulations and Exemptions: — General mandatory regulations apply: minimum wage, minimum paid-

leave, max. working time, conditions for Employee leasing, workplace safety and hygiene, safety regulations for pregnant women and children, anti-discrimination and equal treatment.

— If generally binding CBAs exist in the industry, they shall apply (no exemptions for business travels).

Risk of Detection/Auditing MechanismsHigh:— In case of sensitive sectors (currently in the construction sector and hotel

sector) or any other pay low pay sectorMedium:— Further controls usually only in the course of host company’s audits

Documentation Obligations:No obligations, if the Employer is not related to any of the sensitive sectors.



Excursus: Business Traveller “Classic”GERMANY


Responsibility for Compliance/Sanctions for Non-Compliance:Sanctions for non-compliance with working conditions: e.g. up to €500.000 for non-compliance with minimum wage, up to € 15.000 for non-compliance with maximum working hours.

Overview of Mandatory Regulations and Exemptions:— General mandatory regulations apply: minimum wage, minimum paid-

leave, max. working time, conditions for employee leasing, workplace safety and hygiene, safety regulations for pregnant women and children, anti-discrimination and equal treatment.

— If generally binding CBAs exist in the industry, they shall apply (no exemptions for business travels).

Risk of Detection/Auditing Mechanisms:High:— In case of sensitive sectors (currently in the construction sector and hotel



Documentation Obligations:No obligations, if the Employer is not related to any of the sensitive sectors.



b) Scenario: Business Traveller “Project”GERMANY




Risk of Detection/Auditing Mechanisms: High:Random controls by the Labour Authority are carried out.

Overview of Mandatory Regulations and Exemptions:— CBAs most likely exist, e.g. specific rules for reimbursement and vacation

apply such as higher minimum wages (currently € 11,75-14,95).— Likely obligation for the Employers to participate in the national

construction sector paid-leave fund (“SOKA-BAU”). An exemption is under certain terms possible.

Documentation Obligations:— Electronic notification required (“Meldeportal Mindestlohn”).— Record obligations with regard to the daily working time one week after the

particular work day at the latest and retained for 2 years. — Retention obligation (in German language) with regard to the following

documents: employment contract, time sheets, pay slips and proof of remitted remuneration; upon request presentation at the place of work.

Responsibility for Compliance/Sanctions for Non-Compliance:— The Employer and the host company may each be fined for non-

compliance with mandatory working conditions as well as for a breach of retaining- and registration obligations.

— Sanctions: penalty fees and risk of exclusion from public tenders.


Excursus: Business Traveller “Project”GERMANY



Risk of Detection/Auditing Mechanisms:High:Random controls by the Labour Authority are carried out.

Overview of Mandatory Regulations and Exemptions:— CBAs most likely exist, e.g. specific rules for reimbursement and vacation

apply such as higher minimum wages (currently € 11,75-14,95).— Likely obligation for the Employers to participate in the national

construction sector paid-leave fund (“SOKA-BAU”). An exemption is under certain terms possible.

— Application of any other German employment law requirements is likely.


Documentation Obligations:— Electronic notification required (“Meldeportal Mindestlohn”).— Record obligations with regard to the daily working time one week after the

particular work day at the latest and retained for 2 years. — Retention obligation (in German language) with regard to the following

documents: employment contract, time sheets, pay slips and proof of remitted remuneration; upon request presentation at the place of work.

Responsibility for Compliance/Sanctions for Non-Compliance:— The Employer and the host company may each be fined for non-

compliance with mandatory working conditions as well as for a breach of retaining- and registration obligations.

— Sanctions: penalty fees and risk of exclusion from public tenders.







Overview of Mandatory Regulations and Exemptions:— General mandatory regulations apply: minimum wage, minimum

paid-leave, max. working time, conditions for employee leasing, workplace safety and hygiene, safety regulations for pregnant women and children, anti-discrimination and equal treatment.

— No sector-specific rules, no generally binding CBAs


Responsibility for Compliance/Sanctions for Non-Compliance:Fines for non-compliance with the minimum wage: up to € 500.000; fines for non-compliance with maximum working hours: up to € 15.000.

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leave, max. working time, conditions for employee leasing, workplace safety and hygiene, safety regulations for pregnant women and children, anti-discrimination and equal treatment.

— No sector-specific rules, no generally binding CBAs.— Application of any other German employment law requirements is likely.




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c) Scenario: Business Traveller “Dual Role”GERMANY

Risk of Detection/Auditing Mechanisms:Low


leave, max. working time, workplace safety and hygiene, safety regulations for pregnant women and children, anti-discrimination and equal treatment.

— Application of any other German employment law requirements is likely.





SummaryGERMANY


— Local Agreements are strongly recommended for postings longer than 18 months due to: (i) matters of applicable law under Rome I EU Regulation and the revised Directive, (ii) employee leasing matters in international context as well as (iii) tax consideration.

— Under the revised Directive, posted Employees are obligated to be paid equally to comparable German Employees, including any compensation components (e.g. bonuses etc.). The payment of compensation components in the home country are expected to be takeninto account for the purpose of the comparison only if they serve the same purpose as the payments to be guaranteed during the posting in Germany.

— An expansion of registration obligations to all sectors is unlikely. Nonetheless, mechanisms to control the compliance with mandatory working conditions pursuant to the current legal regime and the future one may be introduced.

— The implementation of the revised Directive in Germany is likely to increase the costs for posting of Employees to Germany.



Practical RecommendationsGERMANY

Investigate in advance whether the activities of your Employees fall into the scope of the sensitive sectors pursuant to MiLoG, SchwarzArbG and AEntG.

Retain documents related to the posting (employment contract, posting contract, pay slips, time sheets) in a bilingual version.

If applicable, make sure to register any postings in advance. If a timely registration is not possible, make sure to register at the soonest possible point of time thereafter.

Acquire social insurance certificates (A1-Certificate) for each posted Employee regardless of the duration of the posting.

Be aware of generally binding CBAs that may apply.A contact person who retains the documents and carries out the communication with the German authorities is not required, but recommended.

Record the traveling activities of each Employee, e.g. by completing a travelling calendar.

Thank you

Your contacts

Dr. Thomas WolfAttorney at Law, PartnerT +49 30 [email protected]

KPMG LawRechtsanwaltsgesellschaft mbHKlingelhöferstr. 1810785 Berlin

Sachka Stefanova-BehlertAttorney at Law, ManagerT +49 30 [email protected]

KPMG LawRechtsanwaltsgesellschaft mbHKlingelhöferstr. 1810785 Berlin

www.kpmg-law.deThe information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. Our services are provided subject to our verification whether a provision of the specific services is permissible in the individual case.

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