Every company sending teams to projects in the European Union faces the Posted Worker Directive. Construction, IT, industrial assembly, consulting, even temporary management assignments… All of these can create legal risks and unnecessary taxes/costs if misconfigured. The rules in effect as of November 25, 2025, clearly distinguish “temporary assignment” from classic business travel. This article provides a guide for Turkish and global companies working on a project basis in the EU on how to strategically manage compliance, costs, and workforce planning.
1. What is the Posted Worker Directive, and who does it cover?
1.1. Posted worker: What is the difference from business travel?
A posted worker arises when an employer in an EU/EEA country sends an employee to provide services in another EU/EEA country for a specific period. The employee retains their employment contract with the employer; they only perform their work temporarily in another country.
- The assignment is based on a specific project, service contract, or internal group assignment.
- The center of work is still in the “sending” country; there is no permanent transfer.
- The employee remains legally bound to the employer; they are not transferred to a local employer.
In classic short-term business travel, the employee typically does not integrate into the local labor market, and project-specific local labor law rules are not triggered. However, when the Posted Worker Directive comes into play, the host country’s basic working conditions and wage standards become mandatory.
1.2. Under what circumstances are you considered a posted worker?
The EU Commission focuses on three typical scenarios:
- Posting based on a service contract (for example, a company in Turkey or an EU country sending a team to a construction project in Germany)
- Intra-group assignment (temporary project support within the same group)
- Personnel rented through a temporary employment agency (agency/temporary work)
In this context, Corpenza particularly comes into play in the “staff leasing” and “posted worker” models. Companies that work with temporary employment agencies in Europe or send posted workers on their behalf can establish compliant payroll, contract, and tax planning through Corpenza.
1.3. The most up-to-date framework: 12–18 month rule
The directive was updated with 2018/957/EU and the new regime has been in effect since 2020. Accordingly:
- In the first 12 months: The host country’s “mandatory minimum working conditions” apply.
- After 12 months (which can be extended to 18 months with notification): Almost all labor law rules of the host country apply; the company assumes responsibility at the level of the local employer.
This threshold is critically important when planning. Corpenza designs business models that minimize risks from the outset, considering these timeframes in your global expansion strategy, from project design to contract architecture.
2. Employer’s basic obligations: Notification, wages, record-keeping, and representation
2.1. Host country notifications: You must be “visible”
In most EU countries, there is an obligation to make electronic notifications before the employee goes on site. The EU’s official “Your Europe” portal lists summary requirements by country:
EU Your Europe – Posting staff abroad
Generally, companies report the following information:
- Employer information and legal representative
- Identity and contract information of the assigned employee
- Project address, sector, and duration
- Wages, working hours, and start/end dates of the assignment
Some countries impose significant fines per employee on companies that do not make notifications. Corpenza manages these notifications centrally for multinational projects; it protects your company from both fines and the risk of work stoppage.
2.2. Wages and working conditions: The principle of “equal pay for equal work”
A posted worker benefits from at least the same wage components as local employees. This includes not only the minimum wage but also the fringe benefits determined by collective labor agreements:
- Minimum monthly/gross hourly wage
- Mandatory supplements such as shift, overtime, night work, and field bonuses
- Annual paid leave and official holidays
- Maximum working hours and daily/weekly rest
In this arrangement, the company cannot unilaterally determine the “home country salary + allowances” combination; it establishes a wage structure that is compliant with local law and clearly documented. Corpenza manages your teams in different countries through international payroll services; you create a structure that is compliant with local rules while integrating into your internal wage policy.
2.3. Record-keeping and local representative: Be ready for audits at any time
Many member countries require the following documents to be readily available on-site or electronically during workplace inspections:
- Employment contract and assignment letter
- Payrolls and payment records
- Records showing working hours (timesheet, shift schedule)
- Social security documents (e.g., A1 certificate)
Most countries require the appointment of a local representative. Corpenza takes on this representation function through its partnerships and local partner network in the EU; it manages notifications, audits, and correspondence end-to-end.
3. Tax and social security: How can you avoid double liability?
3.1. Social security: A1 certificate and 24-month limit
A posted worker primarily remains subject to the social security system of the sending country. For this, the company obtains an A1 certificate from the institution to which the employee is affiliated. A1 proves that the employee will continue to pay contributions to their home country for a maximum of 24 months.
If you do not do this:
- The host country may demand retroactive insurance premiums and penalties.
- The risk of double insurance and complex refund processes arises.
- The employee’s future retirement rights become contentious.
Corpenza’s international accounting and social security consulting service structures the social security aspect for companies running projects simultaneously in different countries within a single framework.
3.2. Income and corporate tax: Look beyond the 183-day rule
Many tax treaties are based on the 183-day rule; however, under the posted worker regime, merely counting days is not sufficient. The following factors affect the right to taxation:
- Which company is actually paying the employee’s salary?
- Which company’s balance sheet the expenses are written off on
- Whether a “permanent establishment” is created in the host country
Corpenza provides the following through its tax optimization service:
- Designs a contract architecture that is tax-efficient and suitable for the project.
- Establishes payroll solutions that can be written off as expenses, documenting salaries legally and transparently.
- Ensures that the costs of your remote and contracted employees are correctly written off in your parent company.
3.3. Balancing costs and compliance with payroll
Companies based inside or outside the EU need a unified payroll system for employees in different countries. Corpenza, with its payroll service:
- Tracks employees in different countries on a single platform.
- Your company shows its contracted employees and remote working teams as payroll through Corpenza.
- Establishes a structure in which you can write off these salaries as expenses in your accounts.
This way, you achieve a compliant and financially predictable structure without the need to establish a local company.
4. Staff leasing and posted worker: Setting up the temporary employment agency model correctly
4.1. Temporary employment + posted worker: A dual audit area
When you rent staff through a temporary employment agency, both the Temporary Employment Relationship Directive and the Posted Worker Directive come into play. In this case:
- The employment agency appears as the employer of the employee.
- The user company manages the actual working conditions and occupational health and safety.
- Both parties bear responsibility to local authorities (joint liability in most countries).
Corpenza offers staff leasing under the posted worker framework in Europe (following the temporary employment agency logic). Thus, your company meets the need for temporary personnel in different countries with a single framework contract; it does not have to deal separately with local licensing, payroll, and audit processes.
4.2. Contract design that reduces compliance risks
Contracts under the posted worker regime must be clear:
- The duration, location, and scope of the assignment of the project are clearly stated.
- Wage components; net/gross structure, bonuses, and fringe benefits are defined in detail.
- It is clarified who and how covers the employee’s travel, accommodation, and daily expenses.
Corpenza aligns your contracts with EU labor law practices; it reduces the risk of disputes in the triangle of parent company, local employer, and employee.
4.3. Sectoral differences: Construction, IT, and transportation
The sectors most frequently subject to audits in practice include:
- Construction and industrial assembly (highly unionized and collectively bargained areas)
- IT and engineering projects (long-term fieldwork, complex tax profiles)
- Transportation and logistics (especially special posting rules for drivers)
Each sector is subject to different collective agreements regarding minimum wage and working conditions. Corpenza tracks these differences on your behalf by country and sector; it conducts cost and risk analysis on a project basis.
5. Long-term assignments, permanent residency, and company formation strategy
5.1. What changes when assignments exceed 12–18 months?
When the assignment exceeds 12 months (which can be extended to 18 months with notification), almost all labor law rules of the host country apply. During this process:
- Rules regarding termination of the employment contract and severance/notice come into play.
- The employee’s integration increases; they approach the status of a local employee.
- Permanent arrangements are required on the tax and social security side.
At this point, companies decide between two strategies:
- Continue with the temporary project model
- Establish a company in the host country and build a permanent presence
Corpenza conducts feasibility studies from both legal compliance and cost perspectives in both scenarios and develops a roadmap.
5.2. Residency permits, permanent work, and golden visa options
Long-term assignments often open the door to planning for permanent residency and work permits. Corpenza, in Europe and globally:
- Residency and work permits for employees and senior executives
- Investment-based residency and citizenship programs
- Golden visa and similar investment-based residency programs
helps companies globalize their talent pool. Thus, you can transfer your critical personnel to different countries for each new project without experiencing visa/permit uncertainties.
5.3. Company formation and tax optimization: Considerations when establishing a permanent presence
When projects become permanent, it may be more efficient to establish a local company instead of indefinitely maintaining the posted worker model. Corpenza:
- Analyzes which type of company (limited, GmbH, SARL, etc.) is strategic in which country.
- Manages the processes of company formation, trade registry, tax registration, and bank account.
- Aligns intra-group billing and transfer pricing with tax optimization.
This way, you structure your corporate setup in a scalable and auditable manner, both under the posted worker regime and in permanent structure.
6. 2025 and beyond: Regulatory trends and your strategic action plan
6.1. Tightening audits and digitizing processes in the EU
The European Labor Authority (ELA) and national inspections now monitor cross-border assignments in a more coordinated manner. By 2025, in many countries:
- Notification systems will be fully digitized; missing/incorrect notifications will be quickly detected.
- Labor inspectors will have cross-access to databases of different countries.
- Some countries will include housing conditions and minimum housing standards in audits.
This scenario creates both financial penalties and reputational risks for companies that continue to maintain “old-fashioned” project management. Corpenza continuously monitors all these new regulations; it keeps your payroll, contracts, notifications, and tax processes up to date.
6.2. Hybrid work, platform economy, and new business models
In the post-pandemic period, hybrid and remote work have become permanent. This situation:
- Employees living in one country while providing services in another
- Project-based, cross-border work relationships through platforms
- New residency regimes with digital nomad visas
creates complex scenarios. Although the Posted Worker Directive focuses on classic fieldwork models, tax and social security authorities also discuss similar principles for hybrid models. Corpenza helps companies establish compliant and flexible structures in these gray areas.
6.3. Action list applicable to your company
Immediate actionable steps for any company sending or planning to send project-based teams to the EU:
- Inventory all current and planned assignments (country, duration, project, status).
- Analyze whether posted worker status arises for each assignment.
- Check the status of A1 and other social security documents.
- Update minimum wage, collective agreements, and working conditions by country.
- Simplify your payroll processes; structure your remote and contracted employees in a way that can be written off as expenses.
- Consider options for company formation, residency/work permits, and tax optimization for assignments approaching 12–18 months.
Corpenza transforms this action list into an operational project for you. It combines residency permits, company formation, golden visas, international accounting, payroll, staff leasing, investment-based citizenship, and tax optimization under one roof; thus, you open up to European and global markets in a secure, sustainable, and scalable manner.
