Consequences of incorrectly posting workers to Germany: What are the risks for entrepreneurs?

Posting of workers to Germany - what obligations do entrepreneurs have?

Posting employees to Germany opens up many opportunities for Polish entrepreneurs to develop their business in foreign markets. However, with this comes a number of legal obligations that must be met.

Non-compliance can lead to serious consequencessuch as high financial penalties, criminal liability or even a ban on doing business in Germany.

In this article you will learn:

• What are the legal grounds for posting workers to Germany.
• What minimum conditions of employment must be met.
• How to avoid sanctions and legal problems.

Legal bases for the posting of workers to Germany

The posting of workers within the European Union is regulated by the Directive 96/71/EC, which sets out the rules for the posting of workers in the framework of the provision of services. In Germany, these rules have been implemented through the Posting of Workers Act (Arbeitnehmer-Entsendegesetz, AEntG).

Minimum terms and conditions of employment that must be provided to posted workers:

1. Minimum wage: The employer must provide remuneration in accordance with German minimum wage legislation.
2. Work and rest times: Maximum working hours and minimum rest periods must comply with German regulations.
3. Annual leave: Posted employees are entitled to a minimum amount of paid annual leave.
4. Terms and conditions of staff hiring: This is particularly true for temporary employment agencies.
5. Health and safety at work: The employer must ensure standards in accordance with German health and safety regulations.
6. Protective measures: For pregnant women, adolescents and children working in specific conditions.
7. Non-discrimination principles: Equal treatment of women and men and no discrimination on other grounds.

Meeting these requirements is crucial for the posting to be carried out legally and without risk of sanctions.

Want to find out more? Check out our article: Posting of foreigners to work abroad.

Posting of workers from outside the European Union - Requirements and risks

The posting of employees from countries outside the European Union (so-called third countries) is much more complicated than for EU employees. Even if they are legally employed in Poland, this does not mean that they can automatically take up employment in Germany.

Required documents:

• Work permit: Necessary for a foreigner to be able to legally perform professional duties in Germany.
• Visa Vander Elst: Issued to employees who perform tasks in Germany on the basis of a contract with a Polish employer.

The absence of these documents can result in the work being considered illegal, with serious consequences for both employer and employee.

Consequences of the illegal posting of workers

Failure to comply with the rules on the posting of non-EU workers to Germany can lead to a number of harsh consequences:

1. Financial penalties:
   • The employer may be subject to a fine of up to 500 000 euro for non-payment of the minimum wage or violation of other posting rules.
2. Criminal liability:
   • In extreme cases, the entrepreneur may hear criminal charges such as:
     • Aiding and abetting the illegal residence of a worker.
     • Employment of workers without the required permits.
3. Prohibition of activities:
   • A company may be banned from providing services in Germany for a limited period of time.
4. Employee claims:
   • Workers can claim back pay and compensation for breach of working conditions.

Example:
An employee from Ukraine with only a Polish work permit and an A1 certificate is posted to Germany. The absence of additional documents, such as the Vander Elst visa, results in a fine for the employer and the employee enforces his rights in the labour court.

Differences in regulations between EU countries

The requirements for posting non-EU foreign nationals vary from country to country:

• Germany: Additional documents are required, such as the Vander Elst visa.
• Czech Republic: No requirement for additional work permits for third-country workers.

Lack of knowledge of local regulations can result not only in legal problems but also in financial losses for the entrepreneur.

Want to know more about posting workers abroad? Read our article: Posting of workers abroad - requirements and documents.

Preventive measures for entrepreneurs - how to avoid risks when posting workers to Germany?

In order to avoid negative consequences related to the incorrect posting of employees to Germany, businesses should implement appropriate preventive measures. Key steps include:

1. To be thoroughly familiar with the legislation:
   • Learn about EU, Polish and German regulations. This will help you avoid posting mistakes and potential sanctions.
2. Ensuring complete documentation:
   • Take care of the following documents:
     • Annexes to contracts and other documents setting out the terms and conditions of posting.
     • A1 certificate confirming insurance in the Polish social system.
     • Residence and work permits and, in the case of non-EU foreigners, visas and other documents legalising work.
3. Verification of the contract with the German partner:
   • Determine the details of the contract with the contractor, such as:
     • Type of activities performed.
     • Responsibilities for employees.
     • Delegation of instructions and control of employees.
   • The lack of precise provisions in the contract may suggest a sham of employment, which in practice leads to the need to insure employees in Germany and pay advance income tax there.

Summary

Posting employees to Germany can bring many benefits to entrepreneurs, but only if all legal requirements are met. Failure to do so can result in serious consequences such as financial penalties, criminal liability or a ban on doing business.

Do you want to make sure your company is operating legally?
Contact our law firm for an audit or for support in preparing documentation and contracts for your employees.

Contact us
Email: sekretariat@bktkancelaria.pl
Tel: +48 606 608 089 | +49 152 1767 9397