Are you posting your employees to Sweden: new rules for posted workers in the end of July 2020
In June 2018, a new revised European Directive on Posted Workers was adopted and all Member States will have to transpose the Directive into national laws by 30 July 2020. Momentius LPA will provide a short overview of the main changes approved by the Swedish Parliament in order to comply with the new European rules.
The current rules on posted workers across Europe
First of all, it should be important to remind that the first Posting Workers Directive (Directive 96/71/EC) as well as the amendments adopted during these last 20 years aimed to support the free movement of services within the European Internal Market. In other words, posted rules enable businesses with a contract with business partners in other EU countries to send their employees to that EU country for a specific period for the purposes of providing services.
The relevant element is always the employment relationship between the business and the worker.
There are also some special rules regarding the possibility to hire a worker through an agency providing temporary staff. In this case, an employment relationship must exist between the worker and the temporary or placement agency used by the company.
The current Posting Workers legislation was transposed into the Swedish system by the so called “Utstationeringslagen”. The foreign company posting the person to Sweden must guarantee that the worker will be treated with the same conditions and terms of employment as those in force - either by law or collective agreements - in Sweden. The main elements of the contract refer to:
minimum rest periods;
maximum working time;
minimum paid annual holidays;
minimum wage - allowances specific to the posting (such as daily allowances) are considered to be part of the minimum wage unless you pay these allowances in reimbursement of costs actually incurred by your posted staff (such as accommodation and travel and meal expenses);
protective measures for pregnant women, women who have recently given birth and young people (under the age of 18);
equal treatment between men and women.
The company can apply employment terms and conditions of its own country during the posting period where those are more favourable to the employees than those of the host country.
More social rights for posted workers: the Revised Directive
During the last 15 years, both the European Union Institutions and Member States (such as Sweden) have worked hard to introduce a better social protection for workers across Europe. The Posted Worker Directive was not considered as an adequate legal instrument for ensuring a level playing field for free cross-border service provision while at the same time delivering an adequate foundation for the social rights of workers.
As a result of a long negotiation process, a new enforcement Directive was adopted in 2014 (Directive 2014/67/EU) with the aim to provide better instruments for the practical application of the Posting Workers Directive by national authorities. Moreover, a revised Posted Worker Directive (Directive EU 2018/957) was adopted by the EU Institutions.
In order to implement the EU’s revised Posting of Workers Directive, the Swedish Government has adopted a bill (Prop.2019/20:150 ) with a number of proposals that are to result in more equal treatment of domestic workers and posted workers in the Swedish labour market and enhanced protection for posted workers. In June 2020, the Swedish parliament approved the above mentioned proposals into a new legislation that will represent the formal transposition of the new Posting Workers Directive into the Swedish legal system.
An important change introduced by the Revised Directive is that posted workers are now entitled to a salary, there is no reference to a minimum wage in the new legislation. Moreover, the revision introduces clearer rules for allowances, while travel, board and accommodation costs which are not deductible from workers’ salaries.
In addition, a new provision will be in force and it can be applied in situations where it is unclear whether or not a paid allowance constitutes wages under the posting directive.
The revised directive also provides extended protection for long-term posted workers. If a person has been posted for more than 12 months, Swedish working and employment conditions will apply to the posted worker, with some exceptions. The period of 12 months shall be extended to 18 months if the service provider submits a renewal notification.
New provisions will also ensure equal treatment of posted temporary agency workers. The same conditions applicable to national temporary employment agencies will also apply to those cross-border agencies hiring out workers.
Finally, businesses will have to notify the Swedish Work Environment Authority (Arbetsmiljöverket) regarding a new worker who has been posted to Sweden from the day one. The current legislation dos not require a notification if the worker has been posted for a period up to five days. The company who does not fulfill the above mentioned administrative formalities can be imposed an administrative penalty with an amount of SEK 20,000.
The new rules will come into force in Sweden by 30 of July 2020.
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