The posting of workers to Germany has become a regular feature of the operations of many Polish construction, manufacturing, transport and IT companies, as well as firms involved in research and development projects. At the same time, this is an area fraught with significant regulatory risk. Errors in the structure of the posting model and in documentation result in administrative penalties in Germany, additional social security contributions and taxes, disputes with employees, and the loss of contracts.
Below is a practical step-by-step guide to help you plan the posting of an employee to Germany in a manner that complies with Polish, German and EU law, whilst minimising the risks for the employer.
Step 1: When an employee is posted to Germany
The first step is to establish the legal position. Not all work carried out in Germany constitutes posting. The outcome of this assessment determines the subsequent obligations regarding social security, the minimum wage and taxes.
Posting applies where an employee remains employed by a Polish employer and their assignment to Germany is of a temporary nature. The employer carries out genuine business activities in Poland, and the work in Germany is performed on behalf of a specific client or an entity within the group. The place of work abroad must not become the employee’s natural and permanent centre of activity.
Where the posting involves third-country nationals, it is necessary to take into account an additional layer of regulation relating to visa law. In such cases, the concept of the Vander Elst visa and the current case law of the Court of Justice are relevant. For more on this topic:
https://bktkancelaria.pl/czy-tsue-zakwestionuje-procedure-wizy-vander-elst/
Step 2: Choosing the basis of employment when posting staff to Germany
The next step is to make an informed choice regarding the legal framework under which work is carried out in Germany. The three most common models are: an employment contract, a contract for services, and working with a self-employed person.
An employment contract offers the highest level of protection to the employee and is most readily accepted by the regulatory authorities. At the same time, it imposes a wide range of obligations on the employer regarding working hours, leave, notice periods, health and safety, and documentation. However, this model is the most predictable in terms of disputes and inspections.
A contract for services offers greater flexibility when the actual manner in which the work is carried out does not constitute an employment relationship. Otherwise, there is a high risk that the relationship will be reclassified as an employment relationship, resulting in the need to pay back-dated contributions and taxes and to rectify the documentation retrospectively.
Cooperation with self-employed individuals must be structured with particular care. Polish and German authorities pay particular attention to elements of subordination, fixed working hours, the obligation to provide services in person, and integration into the company’s organisational structure. If these elements are too pronounced, the B2B arrangement may be regarded as an attempt to circumvent employment law.
Step 3: Social security and the A1 certificate for posted workers
In order for an employee to remain covered by the Polish social security system whilst working in Germany, they must meet the requirements set out in EU regulations, in particular Regulation 883/2004, and obtain an A1 certificate.
The employer must demonstrate that it carries out „normal business activities” in Poland, rather than merely ancillary activities. The assessment criteria include, in particular, the structure of turnover, the number of employees, the nature of contracts and the scope of actual operations in Poland. In addition, the employee must be covered by the Polish social security system for the required period prior to the start of the posting.
On this basis, an application is submitted to ZUS for an A1 certificate covering a specific period of employment in Germany. This document confirms the jurisdiction of the Polish social security system. It should be kept by the employee and presented in the event of an inspection in Germany.
Step 4: Reporting obligations for employers posting workers to Germany
Posting workers to Germany entails a number of obligations towards the German authorities. In many sectors, such as construction, the cleaning industry, the meat industry, security and transport, prior notification of the posting to the relevant customs office is required. This is usually done via a dedicated online portal.
The notification must include details of the employer, the employees, the place of work, the duration of the posting and the nature of the business. It is also necessary to specify a contact person and the location where documents relating to employment, pay and working hours are kept.
In sectors covered by mandatory collective agreements, membership of industry-specific holiday funds is also important.
Step 5: Remuneration and working hours for employees posted to Germany
Posting an employee to Germany means that at least the minimum employment standards applicable in Germany must be applied. This includes both the general minimum wage and minimum sectoral rates, if these have been recognised as generally applicable. This applies in particular to the construction industry, painting work, scaffolding work, the meat industry, cleaning services and care work.
The remuneration paid to a posted worker should correspond to the current rates applicable in the relevant sector and region of Germany. In many cases, this means a level higher than the statutory minimum wage. The employer should always check the applicable collective agreements and their rates before the contract begins.
German working time regulations must also be observed, including the maximum daily working hours, daily and weekly rest periods, and the minimum annual leave entitlement. These aspects are subject to scrutiny on a par with pay levels.
Step 6: Allowances, supplements and costs associated with posting to Germany
The structure of additional benefits associated with secondment, in particular daily allowances, lump-sum payments, accommodation and travel expenses, is of crucial importance from the perspective of employment law, social security and taxation.
The reimbursement of documented costs for accommodation, travel or meals does not constitute remuneration for work. It therefore does not increase the rate compared with the German minimum wage. Lump sums that are not directly linked to specific receipts but are payable by virtue of the secondment itself should be treated differently. Some of these, if structured appropriately, may be classified as remuneration, which is relevant when assessing compliance with minimum wage requirements.
In Poland, daily allowances and certain business travel benefits are subject to tax and social security contribution relief; however, these rules do not fully reflect the realities of secondment, particularly long-term secondment. They require a separate analysis in terms of PIT, ZUS and the implications in Germany.
Step 7: Documentation of the posting and preparation of the employee
Posting workers to Germany requires properly prepared documentation and ensuring that the employee is informed of their rights and obligations. German inspection authorities expect basic documents relating to employment, pay and working hours to be available at the place of work. This includes the contract (or contract of mandate), annexes concerning the posting, time sheets, payroll records and pay slips.
Documents should be drawn up, or at least available, in a language that a German official can understand, in particular in German. The business owner must be prepared to provide copies of documents at short notice upon request by the authorities.
At the same time, the posted worker must be properly prepared. They should be aware of the basic details regarding the employer, the terms and conditions of employment, their remuneration, and the rules governing the payment of daily allowances and other allowances, and should know who to contact for support in the event of an inspection or any issues on site.
Step 8: Tax implications of posting workers to Germany
The final point is an analysis of the tax implications of posting an employee to Germany. It is necessary to determine where the employee’s remuneration will be taxed. Key factors include the double taxation agreement between Poland and Germany, the length of stay, the location of the employee’s centre of vital interests, and the method of remuneration.
From the employer’s perspective, posting workers may result in the establishment of a permanent establishment in Germany. This risk is particularly pronounced in the case of long-term construction contracts, the maintenance of permanent infrastructure or offices, and the gradual development of a permanent presence on the German market. The establishment of a permanent establishment entails an obligation to set aside a portion of profits and tax them in Germany, as well as to fulfil separate registration and reporting obligations.
At this stage, it is essential to take a strategic view of the company’s market presence in Germany. In other cases, it proves more advantageous to set up a branch or subsidiary, or to make use of R&D support schemes on both sides of the border. We have discussed this in greater detail in an article comparing R&D support schemes in Poland and Germany:
https://bktkancelaria.pl/prawne-i-podatkowe-aspekty-dzialalnosci-br-w-polsce-i-w-niemczech-porownanie-systemow-wsparcia/
Summary – the safe posting of workers to Germany
Posting workers to Germany requires taking into account a number of regulatory aspects simultaneously. This includes labour law, social security, taxation, sector-specific requirements and dealings with German authorities. At the same time, it is a tool which, with the right preparation, allows businesses to expand into one of Europe’s most important markets whilst maintaining an acceptable level of risk.
An entrepreneur who plans their business operations abroad with foresight gains a competitive advantage. They can calculate costs responsibly, anticipate regulatory burdens and build lasting relationships with partners and employees on both sides of the border.
Support from our law firm regarding the posting of workers to Germany
BKT International Law Firm offers support at every stage of this process. Contact us to ensure your posting is safe and compliant with the law.
https://bktkancelaria.pl/kontakt/
