• Ministerial Decree to Extend Posted Workers’ Rights
  • March 15, 2019
  • Law Firm: - Office
  • The situation

    The French Minister of Labor has published a Decree to extend posted workers’ rights and tackle unfair competition and fraud related to posted workers.

    A closer look

    The Decree covers the following key aspects:

    • Equal treatment of posted workers. Under the Decree, the foreign employer must guarantee that posted workers are treated equally to employees working in the same branch of activity in France in terms of remuneration; occupational health and safety; accommodation conditions; and allowances or reimbursement of expenses to cover the cost of travel, accommodation or food.
    • Equal definition of remuneration. The Decree aligns the definition of remuneration for posted workers with the definition of remuneration used for French employees, which includes the basic/minimum/ordinary salary, as well as any other benefits and accessories, paid directly or indirectly, in cash or in kind, by the employer to the employee by reason of his employment. Specifically, this includes premiums or bonuses based on collective bargaining agreements, applicable to the branch of activity in France.
    • Application of French labor law after 12 months. Under the Decree, the entire French labor law will apply to foreign employers after 12 months of assignment when related to a specific position under certain conditions.
    • Duty of information for client companies. The client company (the company that uses an employment agency to hire workers) based in France or outside France bears an obligation to provide information related to remuneration and posted worker rules according to French law to an employment agency.
    • Fines apply to client companies. Client companies that violate the posted worker rules can be subject to fines (EUR 4,000 per posted worker, or EUR 8,000 in case of repeated offences, up to a total amount of EUR 500,000). Though these fines already existed, the Decree confirms that they apply to client companies.

    The road transportation sector is not affected by the Decree, as this sector remains under a separate labor law regime.

    Impact

    • Stricter requirements. Under the Decree, foreign employers will be required to ensure equal treatment, and therefore a higher standard of work conditions and remuneration applicable to posted workers. If these benefits were not previously granted, this may increase the cost of employing workers in France.
    • Equal responsibility for client companies. Client companies located in and outside France now bear the same level of responsibility.

    Background

    • Increased compliance efforts. The Decree is part of a broader government policy to reduce differences in employment conditions (known as 'social dumping') and to prevent illegal and unauthorized work. According to the announcement that accompanied this Decree, the French government plans to conduct 24,000 employer audits in 2019 to ensure compliance with posted worker rules, and to grant authorities the right to temporarily shut down worksites if rules are violated. This is also related to the French government’s continued efforts to keep a close watch on compliance, with amended rules on compliance checks for posted workers expected to take effect on July 30, 2020, and a package of laws aimed at preventing illegal and unauthorized work in France still under discussion.
    • Coordination of labour laws in European Union. These new rules are part of a wider EU effort to coordinate EU countries’ application of labour rules through the implementation of a European Labour Authority. The European Labour Authority aims to provide better access to information, promote cooperation, and facilitate joint inspections for compliance among EU countries in the fields of labour mobility (including posted workers) and social security.

    Looking ahead

    The Decree will become effective on July 30, 2020. Fragomen will monitor further developments and report on relevant changes as they occur.