Correctly Define Temporary Employment with Posted Workers in Europe: Where Does the Risk Begin?
Posted worker and temporary employment: Two variables in the same equation
A posted worker means sending an employee of a company to provide services in another EU country temporarily. The employee maintains their relationship with the sending company; the host country applies basic working conditions. Temporary employment covers fixed-term contracts and temporary job relationships. When these two models combine, you gain speed; however, the scope of risks also widens.
In 2025, the EU will explicitly enforce the host country rules regarding equal pay for equal work, working hours, rest, leave, and occupational health and safety. The duration starts at 12 months; a justified extension can go up to 18 months. You can summarize the details on the European Commission page: EU Posted Workers – European Commission.
- Sending country: Employment contract and social security (A1) responsibility
- Host country: Wages, overtime, holidays, health-safety, housing standards
- Time limit: 12 months + 6 months extension with concrete justification
- High-risk sectors: Construction, logistics, manufacturing, facility assembly
The cost of speed: Why does the risk grow?
When the laws of two countries intersect, the definition and scope shift. National notification processes differ. When the supply chain extends, subcontractor control weakens. At this point, errors turn into administrative fines, tax and social security risks, and even criminal sanctions.
Legal and Administrative Compliance: Notification, A1, and Duration Management
Notification and local representation: First contact, first risk
Each country requires a different notification platform, document set, and series of dates. For example, the Netherlands requires digital notification and a local contact person from the sending company. You can check the process and exceptions through the official portal: Netherlands Posted Workers Portal.
- Notify before sending; update if there are changes.
- When starting work, keep the notification reference and work plan ready at the workplace.
- Authorize the local contact; respond immediately to audits.
A1 and duration: Bind the calendar to the law
The A1 document proves which country you are paying social security contributions to. If the team goes to the field without an A1, the host country demands contributions, resulting in retroactive costs. As you approach 12 months, prepare the extension justification in writing.
- Fix the A1 application before sending.
- Monitor the duration based on assignments; do not miss the 12/18 month threshold.
- If you plan rotation for the same role, prevent the perception of “artificial rotation”; document the job description and continuous work need.
Wages, Working Conditions, and Social Security: Establish Equality in Practice
Equal pay for equal work: Correctly match payroll items
The host country considers all binding elements of wages beyond the minimum wage. Seniority, night shifts, field compensation, housing, and travel policies are shaped according to local rules. Misclassification leads to violations of equal pay.
- Reflect the host country’s collective agreements and mandatory additional payments on the payroll.
- Clarify expenses; do not substitute accommodation for wages.
- Prove overtime and equipment use with workplace records.
Occupational health and safety and housing: Bring safety to field reality
Temporary teams experience site-specific risks more frequently. Language differences, training gaps, and rapid setup accidents trigger issues. Implement the host country’s occupational health and safety training and equipment standards; control the contractor chain.
- Provide local occupational health and safety briefing upon entry; document it.
- Keep housing, service, and cafeteria conditions compliant with local legislation.
- Evaluate past violations and accident records when selecting subcontractors.
Taxes, Permanent Establishment, and Penalties: Read the total cost accurately
Taxes and permanent establishment (PE): Keep the operation profitable
Extending presence in the field, combined with sales and project authorities, increases the risk of permanent establishment. This situation creates implications for corporate tax, VAT records, and transfer pricing.
- Limit job descriptions and signature authorities in the project plan.
- Align invoices, contracts, and resource usage with economic reality.
- Consolidate multi-country wage payments in payroll and accounting.
Penalties and audits: Take digital compliance seriously
Authorities have accelerated with notification portals and field audits. Missing notifications, working without an A1, incorrect wage items, and working hour violations lead to high penalties. A visible violation in the media amplifies reputational loss.
- Simultaneously update notifications with contracts and shift records.
- Respond to audits with a single document package; keep access in a centralized folder.
- Create an annual internal audit plan; close findings with an action list.
Compliant Posted Worker Program: Design a sustainable operation
Policy, role, and decision tree: Reduce uncertainty
When HR, legal, tax, and operations teams converge under a single policy, speed and accuracy increase. Clarify criteria, approval flows, and responsibilities for each type of posting.
- Types of postings: Short visit, service contract, assembly/installation, agency work.
- Decision tree: Duration, nature of work, workplace address, customer contract.
- Role distribution: Notification (HR), A1 (social security team), wage matching (payroll), PE analysis (tax).
Technology and evidence set: Be audit-ready at all times
Duration, location, wage items, and contracts flow on a single screen. IMI/national notification outputs, A1, shift schedules, and housing records reside in a single folder. You reduce the language barrier with bilingual documents.
- Establish a task-based file template; track obligations item by item.
- Guide the 12/18 month thresholds with calendar alerts.
- Periodically update wage comparisons with local collective agreements and minimum standards.
Risk Management with Corpenza: End-to-End Approach in Temporary Employment
Service matrix: Multi-country compliance in a single file
Corpenza consolidates mobility, corporate structuring, and workforce needs in Europe and globally under a single roof. The team operationalizes every step of posted workers and temporary employment.
- Personnel leasing and posted worker: Manages postings as a temporary employment agency; takes on notification and local contact.
- Payroll and international accounting: Accurately processes salaries of remote or contracted employees in the correct country; the company writes these payments off as expenses.
- Company formation and PE solution: Establishes a local company if necessary; optimizes tax permanent establishment risk.
- Residence/work permit and investment with citizenship: Structures permanent residence and work permit arrangements for extended projects; evaluates golden visa options.
- Tax optimization: Adapts contracts, invoicing, and transfer pricing to multi-country architecture.
Implementation scenarios and measurement: From risk to value
Different setups are required for project assembly, maintenance downtime, and software rollouts. Corpenza provides a clear roadmap for each scenario.
- 6 months of assembly work (within the EU): Notification, A1, wage matching, occupational health and safety briefing, shift and accommodation documentation.
- 12+ months of commissioning: 12/18 month duration plan, extension justification, PE analysis, local company if necessary, and long-term permits.
- Multi-country maintenance tour: Multi-notification management, travel days and working hours separation, expense/wage breakdown.
- KPI approach: Compliance completion rate, number of audit findings, wage deviation rate, duration breach warning rate, penalty amount = 0 target.
- Governance: Monthly compliance report, quarterly tax/PE review, annual internal audit.
The team remains human-focused throughout the process: Language support, local culture briefing, safe accommodation checklist, and complaint channel protect employees; the employer brand strengthens.
