Posting Workers in the EU: What the Posted Workers Directive Means for Staffing Agencies

A staffing agency that sends a contractor into an EU member state to deliver a service is caught by the Posted Workers Directive, and since Brexit a UK agency carries more obligations under it, not fewer. The same cross-border questions arise for a UK agency deploying contractors into the Gulf, though outside the EU the framework differs. The rules are widely misunderstood. They are often conflated with social-security paperwork, assumed to be a single EU-wide process, or treated as a way to sidestep local employment, and they are none of those things. This guide sets out what the Posted Workers Directive requires of a staffing agency, where the UK's third-country status changes the picture, and when posting is the wrong tool and an employer of record or local employment is the right one.

What the Posted Workers Directive is

The Posted Workers Directive decides which employment terms apply when a worker is sent to another EU state to provide a service. It is built from three layers that are read together: the original Directive 96/71/EC of 1996, the 2014 Enforcement Directive that made the rules enforceable, and the 2018 revision (Directive (EU) 2018/957) that applies from 30 July 2020. The 2018 revision is the substantive reform: it replaced the old guarantee of the host country's "minimum rates of pay" with full "remuneration," meaning all the pay elements made mandatory by host-country law or universally applicable collective agreements, including bonuses, allowances, and sectoral rates, not just the minimum wage. Its guiding principle is equal pay for equal work in the same place. Road-transport drivers are governed by their own separate posting rules and fall outside the general regime below.

When a staffing agency is "posting" a worker

A staffing agency is posting a worker when it hires that worker out to a user in another EU state. The directive recognises three posting situations: posting under a service contract, intra-group posting, and temporary agency work, and the third limb is the one that directly captures staffing and recruitment agencies. In every case the defining condition is the same: the posting is temporary, and an employment relationship between the agency and the worker must subsist throughout it. A posted agency worker is also entitled to the same terms a locally hired agency worker would receive in the host state, so host-country agency-worker parity applies. If a user then onward-deploys the worker to a third member state, the worker is treated as posted by the agency, which keeps responsibility with the employer.

The host-country terms you must apply

Posted workers are guaranteed the host country's core employment terms, regardless of which law governs their contract. This "hard core" covers working time and rest, minimum paid annual leave, remuneration including overtime rates, the conditions for hiring out workers, health and safety, protections for pregnant workers and young people, equal treatment and non-discrimination, accommodation standards where the employer provides it, and allowances or reimbursement for travel, board, and lodging. A specific rule on allowances matters for agencies: an allowance tied to the posting counts as part of remuneration unless it genuinely reimburses expenses actually incurred, and where the split is unclear the whole allowance is treated as reimbursement. That prevents a posting allowance being used to dilute the pay the worker is owed under host-country rules.

The 12-month rule: when host law takes over

Once a posting passes 12 months, almost all of the host country's employment law applies to the worker, not just the hard core. The period extends to 18 months where the agency files a reasoned notification with the host authority. Two narrow areas survive even then, namely the rules for concluding and terminating the contract, including non-compete clauses, and supplementary occupational pensions, but otherwise the worker is treated close to a local hire. For an agency, the threshold is a clear planning signal: a placement expected to run beyond a year is one where posting starts to lose its advantages, and local employment or an employer of record usually becomes the cleaner vehicle.

Social security is a separate regime: A1, and the UK's PDA1

Social security follows a separate set of rules from employment law, with a different time limit and a different document. Under the EU coordination rules, a worker posted within the EU, EEA, or Switzerland can stay insured in their home country for up to 24 months, certified by an A1 portable document, and the host state cannot demand local contributions while it is valid. This 24-month social-security limit is not the same as the 12-month labour-law threshold, and the two should never be merged. For a UK agency the position changed with Brexit: the EU regulations no longer apply, and coordination runs through the UK-EU Trade and Cooperation Agreement, whose "detached worker" rule keeps the worker in the UK system for up to 24 months where the member state has opted in. Per UK government guidance, all member states have done so. The document is a certificate of coverage, also called a PDA1, and it is not an "A1." Calling it an A1 is a common error. There is no discretionary extension beyond 24 months for new postings under the agreement, and UK-Ireland movements run under a separate bilateral convention.

Declarations, documents and a local representative

Before a posting begins, the agency must usually file a prior notification in the host state and keep documents available there. There is no single EU-wide declaration. Every member state runs its own system, so an agency posting into several states declares separately in each one. A single centralised EU posted-worker portal, sometimes described as a one-stop electronic declaration, is not yet live: it remains a legislative proposal still in trilogue between the EU institutions as of 2026, with no legally binding launch date, and it should not be relied on for any posting. The live, legally required obligation is per-country prior notification through each member state's own system before the worker starts work.

The host-country systems differ in name and detail, so an agency posting across several states tracks each one separately. The most frequently used national notification systems are set out below.

Host country	Notification system	Notes for posting agencies
France	SIPSI online declaration	Declaration filed before the posting starts; a representative in France must be designated for the posting period
Netherlands	Meldloket portal under the WagwEU posting law	Online notification required before work begins; the Dutch service recipient verifies the declaration
Belgium	LIMOSA declaration	Mandatory prior declaration; the LIMOSA-1 receipt may be requested by the Belgian client before work starts
Germany	Customs (Zoll) notification portal	Registration with the German customs authority for relevant sectors; documents kept available for inspection
Austria	ZKO notification forms	ZKO3 form for posted workers filed before the posting; pay and time records kept available in-country

The agency must keep the employment contract, payslips, timesheets, and proof of wage payment available in the host state, translated on request, and the social-security certificate should be on hand for inspections. Several states also require the agency to designate a local contact or liaison person to deal with the authorities, and France's required representative is the best-known example. These are obligations to plan for before the worker travels, not after.

Enforcement, liability and the UK third-country burden

Enforcement of posting rules is real, and a UK agency carries obligations an EU agency does not. Authorities apply a genuine-posting test to filter out "letterbox" arrangements: the agency must carry out substantial activity in its home state, and the worker must habitually work there and be expected to return, or the posting can be reclassified and full host-country law applied. In construction, a main contractor can be held jointly liable for a subcontractor's underpayment of posted workers, penalties imposed in one state can be recovered across borders, and individual states impose substantial fines. Germany, for instance, provides for administrative fines up to €500,000 for serious violations. The UK angle adds two burdens. A non-EU agency must not be treated more favourably than an EU one, so a UK agency is caught at least as fully; and because the UK no longer has free movement of services, a UK agency posting a non-EU national generally needs a host-country work permit as well. Prolonged in-country presence can also create a taxable permanent establishment for the agency, so long placements carry a corporate-tax question on top of the labour-law one.

Worked example

A short posting shows how the separate rules stack up in practice. A UK staffing agency employs an automation engineer in Britain and posts that engineer to a French client site for a four-month commissioning project, with the employment relationship and a genuine UK base kept throughout. Before the engineer travels, the agency files a SIPSI declaration in France, designates a French representative for the posting period, and applies for a PDA1 from HMRC so the engineer stays in the UK social-security system. During the posting the engineer must receive French "remuneration" for the work, including any sectoral collective-agreement rate and overtime terms, not the lower UK pay alone. The contract, payslips, timesheets, and proof of payment are kept available in France and translated on request. Because the posting runs to four months, it sits well inside the 12-month labour-law threshold and the 24-month social-security limit, so the host-country hard core applies rather than full French employment law. Had the same role been open-ended, or had the engineer been recruited specifically for France with no UK base, posting would no longer fit, and local employment through an employer of record would be the compliant route.

When posting is the wrong tool, and an EOR is the right one

Posting only works when there is a genuine, temporary, home-country employment to post the worker from. Where that is missing, an employer of record or local employment is the correct route, and posting is the wrong one. The clearest cases are a worker recruited to work in the host country with no real home-country base, which fails the genuine-posting test; a self-employed contractor, who is not a posted worker at all and carries the same contractor-status and misclassification risk that the UK off-payroll rules address; a long-term or open-ended placement that crosses the 12-month and 24-month thresholds; and hiring local host-country talent, to which posting simply does not apply. In each of these, an employer of record employs the worker locally, running host-country payroll, withholding local tax and social contributions, and providing a compliant local contract, while the agency keeps the client relationship. Local engagement also brings the worker under the host state's own classification rules, including newer regimes such as the EU presumption of employment for platform workers where the work is platform-organised. For placing workers in Europe without posting from a home-country payroll, see the contractor payroll services page.

About Aspirock

Aspirock is an Employer of Record and payroll provider operating across 70+ countries, with six global offices and over 22 years of experience supporting more than 5,000 workers. Every client works with a named account team that owns the deployment end to end, so contracts, payroll, visas, and compliance filings in each market are handled by people accountable for the outcome. For employer-of-record and payroll support, see the Employer of Record service page.

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