Posted workers are still a problem in Luxembourg. These are employees who are sent by their employer to carry out a service in another EU member state on a temporary basis, in the context of a contract of services, an intra-group posting or a hiring out through a temporary agency, the European Commission. Last year, two-thirds of the fines imposed by Luxembourg’s Labour and Mines Inspectorate--almost €8.9m--were due to offences linked to this issue, with companies operating in Luxembourg abusively exploiting differences in pay and social regulations to gain a competitive advantage over local companies.

“On this subject of social dumping, we are positioning ourselves as defenders of local companies against unfair competition and protectors of employees with regard to their working conditions,” insisted labour minister  (CSV), in the ITM’s annual report for 2023, while the government’s ambitions were only--according to the coalition agreement--to analyse the situation in order to adopt legislation.

In the , the European executive has several objectives:

- to reduce the administrative burden for companies and the competent national authorities by reducing the number of data points to be filled in by companies from the current 300 to 30;

- to make it easier to submit posting declarations in a user-friendly way, remotely and electronically;

- to facilitate administrative cooperation between member states and effective monitoring of compliance with the obligations set out in directives 2014/67/EU and 96/71/EC;

- and to contribute to the protection of posted workers by making it easier for member states to carry out effective and adequate checks on their territory.

A standard multilingual form

Participation in this interface will be voluntary for member states. It will offer a standard multilingual form containing the relevant information that may be needed to enable concrete checks to be carried out at the workplace; service providers will use the public interface to submit a posting declaration to the competent national authorities of the host member state; national, regional and local authorities will be able to communicate quickly and easily with their counterparts in the EU; a repository will enable the competent national authorities to check the details of posting declarations submitted by service providers.

Last year, more than 145,000 posted employees from 5,000 companies [compared with 5m employees in Europe] worked in Luxembourg. This figure should be compared with the 482,000 employees, residents and cross-border commuters, who work in Luxembourg.

Lower wages and social protection

The problems associated with seconded workers include:

- Posted workers are sometimes paid less than local workers, despite European legislation requiring compliance with certain conditions in the host country.

- Working conditions may be less advantageous for posted workers, who do not always have access to the same benefits (social protection, job security).

- Some companies abuse the system by practising ‘abusive posting,’ where they send workers from countries with low labour costs to avoid paying local social security contributions.

- There are also cases of ‘letterbox companies,’ which are set up in another country simply to post workers without any real activity on the ground, thus circumventing the posting rules.

- Authorities find it difficult to monitor the working conditions and wages of posted workers, given the mobility of these workers and the growing number of postings.

- Posted workers often remain affiliated to the social security system of their country of origin, which can complicate access to healthcare and social benefits in the host country.

- They may also have limited access to local trade unions and their support services, making it more difficult to defend their rights.

- Local companies may find themselves competing with companies that employ posted workers at lower cost, creating a competitive imbalance. This can lead to downward pressure on wages and working conditions for resident workers.

- Posted workers often come for limited periods and are sometimes isolated from the rest of the company, which can complicate their integration and create tensions with local workers. Language barriers and cultural differences can also make it difficult for them to adapt.

This article was originally published in .