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Improvement of the Regulation on Posting of Workers (the Posting of Workers Enforcement Directive)

Improvement of the Regulation on Posting of Workers (the Posting of Workers Enforcement Directive)

Latvia
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The free movement of persons, freedom of establishment, and freedom to provide services are fundamental principles of the European Union.

The 1996 Posted Workers Directive (96/71/EC) provided a framework so that both businesses and workers could take full advantage of the opportunities offered by the single market. However, in 2003 the European Commission evaluated the implementation of the 1996 Posted Workers Directive and identified several problems. 

In order to rectify these problems and to reduce the uncertainty existing in the field of labor law, especially concerning the posting of workers, and as a response to the verdict of the Court of Justice of the European Union in Viking, Laval, and Ruffert, the European Union drafted and adopted Directive 2014/67/EU (the “Posting of Workers Enforcement Directive”), requiring its members to implement it into national regulatory enactments before June 18, 2016.

The aim of the Posting of Workers Enforcement Directive is to strengthen the social dimension of the common market, to protect workers, to improve the conditions of work in cases of posting of workers, and to promote administrative cooperation and exchange of information between the institutions of the EU Member States.

Amendments to the Labor Law of the Republic of Latvia (hereinafter referred to as the “Labor Law”) were drafted in order to transpose certain provisions of the Posting of Workers Enforcement Directive and came into force on June 9, 2016.

Latvia is among those EU Member States that had already included in their Labor Law the obligation on the part of an employer posting workers to Latvia to inform the State Labor Inspectorate (SLI) of the posting in writing. However, this obligation has been supplemented by a requirement that the information be provided to the SLI in the Latvian language. In addition, henceforth, employers will have to submit more information to the SLI in terms of their own identification and contact information, the duration of the posting, the start and end of the working period, etc.

The amendments also transposed the requirements of the Directive relating to the obligation on the part of the employer to ensure that all concluded employment contracts; pay slips; time-sheets indicating the beginning, end, and duration of the daily working time; and proof of payment of wages be kept by the employer’s representative in Latvia. At the request of the responsible authority, the documents must be translated into Latvian. 

Moreover, the Labor Law has been supplemented by a regulation providing that the provisions regarding business trips shall be applicable to postings of workers. Thus foreign employers, when posting workers to Latvia, shall be obliged to pay daily allowances for the business trip in addition to the minimum wage and reimbursement of the expenses in order to ensure equal treatment between Latvian and foreign (posted) workers. In addition to this supplement, amendments to the Labor Law affect subcontracting chains and contractor liability by providing that posted workers who are employed by a subcontractor are entitled to claim unpaid waged from the contractor. Such rights are limited to the minimum wage of the country where the worker is posted. The contractor will have regressive rights towards the subcontractor. This liability currently is only implemented towards contractors in the field of construction (i.e., construction of buildings and specialized construction work). 

Further, amendments to the Labor Law include the previously contested principle that has now been clearly formulated in the Directive, namely, that the employer has to comply with the administrative requirements and submit to the requirements of the supervisory and control institutions of the state where he or she has posted a worker. 

Finally, pursuant to the requirements of the Directive, each state has an obligation to create an Internet database where the employees and employers can find all the necessary information with regard to the laws and regulations in the field of labor law, including the amount of minimum wage in each state. Thus, each employer will have to read through the labor requirements of other states, which will also be shared with the European Commission and other Member States. Currently, this Internet database has not been created in Latvia.

By Andra Rubene, Partner, and Ivita Samlaja, Senior Associate, Tark Grunte Sutkiene

This Article was originally published in Issue 3.4 of the CEE Legal Matters Magazine. If you would like to receive a hard copy of the magazine, you can subscribe here.