HOUR RATES FOR POSTINGS IN THE EU WITH A1 CERTIFICATE

Hour Rates for Postings in the EU with A1 Certificate

As many readers might think, long-term postings in the EU (up to 2 years) with an A1 certificate from the NRA is our favorite topic. In fact, this is not far from the truth. At Vesta Consult Accounting Firm, we highly respect and love our clients; we want to be as useful as possible to them and give them as much as possible. We are often asked questions on the topic of long-term postings with the A1 certificate in the EU, which is why we often publish articles on this topic. This way, everyone can read at their convenience and find exactly what interests them when needed.

Today's topic is about the hourly rates for posting staff within the EU with an A1 certificate for a period of up to 2 years.

The Role of the Collective Labor Agreement in Determining Hourly Rates for Postings in the EU

First of all, we all know that in many EU countries, trade unions and employers' associations have quite a bit of authority and a number of privileges. For this reason, it often leads to the signing of so-called collective labor agreements. I will not go into detail about what a collective labor agreement is, but I will outline it briefly for those who may not be familiar.  Parties to a collective labor agreement are the employers’ association of a certain or selected industrial organizations on one side and a union that serves the interests of the workers and/or employees in a given professional direction on the other. An example of this may be an agreement signed between (this is fictional) the Chamber of Builders in Finland (for employers) and the employers’ association of plasterers, again in Finland. Most often, the  subject matter of such collective labor agreements is the conditions of labor and the remuneration for this labor. These conditions set work conditions in 100% of cases such as:

• shorter working hours, for example, instead of a 40-hour work week, it is limited to 35 or
• higher pay (hourly rates) for certain professions or upon reaching some experience altogether, respectively reaching some experience with this employer;
• additional requirements for professional insurance or
• increased requirements for professional clothing, which must be provided by the employer, among many other things.

Economic and Administrative Effect in Determining Hour Rates during Posting in the EU with A1

It is crucial  before sending your staff long-term to the EU, to be well-acquainted with these regulations (collective labor agreements). The reason is that the social services of EU countries are particularly strict in exercising their control powers and monitor whether the collective agreements and conditions set by them are being observed. They will hold your foreign client accountable for their observance and you as the employer. You have no right to put your workers in a more unfavorable position than local specialists according to either European or Bulgarian legislation. For this reason, if a violation is found, it is almost certain that you will be fined. Still, due to the violation committed, it is possible that your client may be forced to terminate their contract with you.

Another effect of the obligation to comply with collective labor agreements is related to the hourly rates for paying your workers’ compensation. They cannot receive less pay than local workers in the same professional direction. This payment  does not include daily allowances. You owe regular payment of allowances regardless of the hourly rates owed.

The third effect of this arrangement is your obligation as an employer to carefully comply with holidays and non-working days in the host country where you send your team, and to carefully record your books for periodic instructions. Some collective agreements may state that periodic instructions must be conducted every day! Social services abroad, as well as the labor inspection in Bulgaria, have the right to check your documents and impose sanctions when you fail to comply with the local legislation in the host country.

Vesta Consult Accounting Firm advises that to avoid being in a non-compliance scenario, you should fix the monthly rates and pay them on the payroll, while allowances should be calculated and paid on a separate allowance sheet.

Regularly send not only the payrolls but also schedules and attendance sheets to your accounting or payroll company (that handles your posted staff documentation). There should be no discrepancies between what is declared to the NRA and what is written on the other listed documents.

I hope we have been helpful with this information and have spared you possible unpleasantness in the future!

If you find this article interesting and useful and its content is of interest to you, please share it on social networks. If you want to read more of our materials on the topic of long-term staff postings in the EU with an A1 certificate from the NRA, you can also have a look at the following titles:

"On the Question of Insurance for Posted Workers with A1 in the EU"

"A1 Certificate for Germany and France"

"Joint Committee for Construction, Belgium Labor law "

"My Health and Insurance Rights in the EU"

Author: Marina Muchakova