DEI insights

Employee mobility under the influence of the EU 

  
   
With the increasing complexity of global regulations, organizations are prioritizing compliance and risk management in their mobility programs as well as a need for increased equality and transparency.
This includes ensuring compliance with local labor laws, tax regulations and immigration requirements as well as future requirements by the EU. In particular employers should be aware of the Posted Workers Directive and its implications for global mobility, as well as paying attention to the incoming EU Directive on pay transparency. While the latter is still being specified through its implementation into national law, the Posted Workers Directive was launched in 1996 and has gained significance, particularly with the Enforcement Directive in 2014 and its update in 2018.  An increased focus on transparency and equal pay is also top of mind for employers with the pending EU Pay Transparency which will be transposed in to national law in June 2026.

EU Posted Workers Directive

The EU Posted Workers Directive is designed to protect the rights of workers who are temporarily posted by their employer to another EU member state. The key requirements of the Directive include:
  • Minimum terms and conditions
    Posted workers must receive at least the minimum terms and conditions of employment that are applicable in the host country. This includes, but is not limited to, provisions related to pay, working hours, rest periods and annual leave.
  • Notification requirements
    Employers are required to notify the relevant authorities in the host country before posting workers. The notification should include, but is not limited to,  information about the identity of the employer, the duration and nature of the posting.
  • Duration of posting
    The Directive sets a maximum duration for posted work of 12 months, after which the host country's labor laws and regulations fully apply to the posted worker(s).
  • Enforcement and cooperation
    The Directive establishes mechanisms for cooperation between member states to ensure effective enforcement of the rules. This includes sharing information, conducting inspections and imposing penalties for non-compliance.

EU Pay Transparency Directive

Meanwhile, the EU Pay Transparency Directive aims to promote gender pay transparency and address the gender pay gap by requiring employers to provide information on pay levels and gender pay disparities. The Directive requires companies with 100 or more employees to disclose information on the gender pay gap, including average salaries and benefits, broken down by gender. It also prohibits employers from retaliating against employees who inquire about or disclose pay information. Additionally, the Directive encourages employers to conduct pay audits to identify and address any unjustified gender pay disparities. The goal of the Directive is to increase transparency, promote equal pay for equal work and empower employees to challenge pay discrimination. This Directive applies to all employees, including expatriates.

Navigating the path to pay transparency requires careful consideration of key questions

Transparency is important in mobility packages to build trust and fairness within the organization — while ensuring legal compliance. When employees have a clear understanding of their compensation and benefits, they feel valued and are more likely to be engaged and motivated. In Mercer’s 2024 Global Pay Transparency Survey, 59% of companies responded that pay transparency was an expectation of employees. Transparency also helps to mitigate the risk of misunderstandings or disputes regarding compensation, which can lead to dissatisfaction and potential legal issues.

Organizations need to proactively address these challenges and ensure compliance while also leveraging the opportunities for transparency and fairness in compensation practices.

To comply with current requirements based on the Posted Workers Directive  and to be prepared for the EU Pay Transparency Directive, organizations can take the following steps:

  • Understand the Directives: Gain a thorough understanding of the requirements and implications of both Directives. Familiarize yourself with the specific provisions, compliance obligations and timelines associated with each Directive. Stay informed about any updates or changes to the Directives and related legislation. Monitor developments at the national level, as each EU member state may have its own implementation and enforcement measures.

  • Conduct a readiness assessment: Assess your current policies, processes and practices to identify any gaps or areas that need improvement to align with the Directives. Determine what changes need to be made to ensure compliance.

  • Solidify your mobility policies: Review your mobility policies, particularly those related to posted workers and equal pay. Ensure that your policies align with the requirements of the Directives and make any necessary updates or revisions.

  • Data inventory: Evaluate your data collection and reporting mechanisms to ensure that you can effectively track, value and report on relevant information required by the Directives. This may include data on posted workers, pay gaps and other relevant metrics.

  • Use technology: Use tools to support the analysis and compliance requirements creating efficiencies and improving consistency across the organization. Tools like Mercer’s Travel Tracking Tool enhance compliance with the Posted Workers Directive by allowing you to track employee’s trips and supporting HR with notification obligations.

  • Engage stakeholders: Involve key stakeholders, such as HR, legal, finance and mobility teams, in the preparation process. Collaborate with these teams to ensure a comprehensive understanding of the Directives and to develop a coordinated approach to compliance. Have a clear roadmap for your company to follow.

  • Train and educate employees: Provide training and education to employees, managers and relevant stakeholders on the requirements and implications of the Directives. Ensure that they understand their roles and responsibilities in complying with the Directives. Create branded communication assets. 

  • Measure impact: Regularly review and assess your compliance efforts to ensure ongoing adherence to the Directives. Create clear KPIs to measure and provide feedback loops to process.
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