Tuesday, October 24, 2017

Mobility of labour - Or exported wage-slaves?

Some companies based in Western Europe create subsidiaries in Eastern Europe to take advantage of lower labour costs. They then hire local workers at cheap Eastern European wage rates, and then bring them to work in Western Europe on short-term contracts. This saves on companies' labor bills, but it reduces the jobs and income available to western European workers, whose wage rates under their regional negotiated wage bargaining agreements are much higher. It also reduces western governments' employment tax income.

Such workers are called "posted workers."

These are employees sent by their employers to carry out a service in another EU member state on a temporary basis. Posted workers are different from EU "mobile workers" in that posted workers remain in the host member state temporarily and do not integrate in its labor market. Some posted workers were cheated by employers that subtracted their food and lodging costs from their wage packet. That's an abuse the Parliament would like to put an end to.

Mobile workers are those who go to live and work in another EU country long-term. They're entitled to equal treatment, including equal pay and benefits, to citizens of their new host countries. Paying posted workers on temporary contracts wages and benefits at the rates of their home country, rather then their host country, is a practice that is not illegal under existing European Union rules, but it's a loophole that Western European governments would like to close.  New draft EU rules stipulate that employees working at the same location must be paid the same wages and benefits, regardless of where their home address is located or where their employment contract was agreed. A Polish worker in Belgium, for example, would get paid in accordance with Belgian sectoral wage rates, not Polish wage rates. Paris and Berlin argue this reform is needed to prevent wage dumping. Poland and the Czech Rep., however, worry that fewer Eastern European workers would get hired if the reform goes through. The Czech and Polish governments want to keep wage income associated with the loophole flowing inward, so they're opposing any change in the existing rules. In Polish media, there have even been fake-news stories that incorrectly claim that Brussels is planning to end the right to work on temporary assignments across borders.

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