EU seeks to stem rising tide of cheap foreign workers

EU seeks to stem rising tide of cheap foreign workers

BRUSSELS - Reuters
EU seeks to stem rising tide of cheap foreign workers

French Labor, Employment and Social Dialogue Minister Michel Sapin gives a press conference following an Employment, Social Policy, Health and Consumer Affairs Council meeting at the EU Headquarters in Brussels on Dec 9. AFP PHOTO

EU labor ministers gave initial approval Dec. 9 to tougher rules on employing cheap temporary workers from eastern Europe and elsewhere, responding to political unease at a time of record joblessness.

Ministers agreed to curtail abuses of European Union law that enable companies to move cheaper, foreign workers from one EU country to another, but which trade unions say prevent locals from getting work.

Tightening the law would force companies to provide more documentation, proving that the contracts for workers are bona fide.

But not all EU ministers in Brussels gave their whole-hearted support for tightening the rules.

While France championed the case for stricter enforcement, eastern European countries such as Hungary, whose workers benefit, are reluctant to toughen them up.

That means it will now fall to negotiations between EU countries and the European Parliament, which also has a say in lawmaking, to flesh out the broad deal agreed by labour ministers. It could be several months before a final accord is reached.

"There is an urgent need to reinforce the safeguards in EU rules," EU Employment Commissioner Laszlo Andor told reporters.

Each year, more than a million workers are moved by employers across EU borders to work chiefly in construction, farming, hospitality and transport.

The French government says the number of so-called posted workers in France - mainly from Poland, Portugal and Romania - rose 23 percent this year to more than 200,000. Officials estimate that many more go unregistered. Companies shift workers across Europe to high-wage centers to take advantage of cheap employment taxes in their home countries.

Social security charges in France can be two, three or four times higher than those in Britain, Poland or Slovakia, meaning companies can cut their labor costs significantly by moving staff there from countries with lower charges.

But EU officials say many foreign sub-contractors do not respect pan-European rules that govern pay and working time for such staff.

Under EU rules, workers may be posted abroad for up to two years for a specific purpose. Their contracts must respect the labor law of the host country, but social security charges remain those of the home state.

In France, that means they must be paid the gross minimum wage of about 1,400 euros ($1,900) a month for a 35-hour week, with five weeks annual holidays. But they are not liable to French payroll levies, which are the highest in Europe.