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December 2, 2022

KPMG releases new edition of Guide on Posting of Workers 2020

KPMG has released the fifth edition of its Guide on Posting of Workers. “2020 is the year of important changes for the labor market. Brexit, the revised Posting of Workers Directive, the new principle of equal pay for equal work and the establishment of a European Labor Authority are just some of the factors which will reshape labor mobility as we know it.

Not to mention the COVID-19 crisis, which has brought almost overnight huge changes in the way international workers carry out their activity”, explains Mădălina Racovițan, Tax Partner and Head of People Services, KPMG in Romania.

Posting of workers is a normal part of enterprises’ cross-border activities, even though, in this period, postings may be structured differently from how they used to be. The emergence of atypical jobs and new forms of work in the digital economy are contributing to the general feeling of uncertainty surrounding this transformation.

Racovițan continues: “The KPMG guide on posting of workers first appeared in 2016 and since then we have been monitoring corporate obligations related to mobile workers throughout the EU, from the applicable minimum wage levels to the necessary registration procedures in each member state.


What have we learnt from looking at this year’s data?


  • Out of the 31 member states only 21 have a minimum wage set at national level.
  • Luxembourg is the member state with the highest minimum wage (EUR 2.142) and Bulgaria the one with the lowest (EUR 312). This is, however, no surprise as this ranking has remained the same since 2016 when we first started monitoring it. Romania ranks 19th with a minimum wage of 466 EUR.
  • The European Parliament is proposing a minimum wage target of at least 60% of the respective national average wage, “to avoid excessive wage disparities, to support aggregate demand and economic recovery and to underpin upward social convergence”. All of the 17 member states analyzed , had a minimum wage in 2019 below the threshold of 60% of the corresponding average wage. In Romania, the minimum wage represents 40% of the average wage. The increases in the minimum wage needed for it to reach 60% of the respective average national wage range from 18% in Portugal to 58% in Slovakia, the Romanian minimum wage needing an increase of approximately 49%.
  • Countries with low minimum wages have higher employee tax costs. While Ireland, the country with the highest net salary (for the scenario considered), has a tax burden related to the minimum wage of 20.46% for the employee, countries with the lowest minimum salaries, like Hungary and Bulgaria, have tax costs for the employee of 33.5% and 22.4%, respectively. The highest cost for the employee is actually in Romania, which has an effective tax rate of 40.85% for the minimum wage applicable in the construction industry.
  • Currently, in most member states, the home entity is legally required to inform the labor authorities in the host member state about the employee’s activity in that country. Usually, this does not apply in the case of business travelers.
  • This notification can be made online or by e-mail in most member states. However Latvia and the Czech Republic still require the notification to be made in written form directly with the relevant authorities. There are no employment law registration requirements in relation to posted workers in Iceland, Norway, Switzerland and the UK.
  • The EU Commission adopted the proposal for a revision of the Posting Directive on 28 June 2018 and the Directive must be implemented in each Member State’s national legislation no later than 30 July 2020. Most Member States are currently working on this. Some early adopters include Belgium, France, Poland and Slovakia.”

The main purpose of this guide is to help companies understand the general principles around posting of workers as well as potential costs and additional obligations, in order to be able to properly plan the activity of their workforce.

“We hope you will derive both interest and benefit from reading this year’s edition of the KPMG Guide on Posting of Workers,” reads a press release issued by the company.;


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