Cross-Border Labour Costs: Towards Equal Remuneration and Competitive Advantage

1. cross-border labour costs Marek BENIO, PhD Cracow University of Economics Gdańsk, 19-20.10.2017 This study was funded by the the National Science Centre NCN: "The use of interactive methods of governance in shaping social policy" No. UMO-2011/03 / B / HS5 / 00899

2. Inspiration for the survey In our Union, the same work at the same place should be remunerated in the same manner Jean Claude Junker COM proposalminimum rates of pay -> remuneration Equalpay? Equalterms of pay?

3. GOALS AND EFFECTS We needmoreposting, not less Fairerrules A levelplaying field The proposal will create a legal framework for posting that is clear, fair and easy to enforce (…) These changes will provide better protection for workers, more transparency and legal certainty and ensure a level playing field between domestic and posting firms while in full respect of Member States' wage-bargaining systems Marianne Thyssen

4. THE SURVEY 16 20 623PD A1 2013 2014 2015

5. THE SURVEY + ‚ - real costs high qualitysample reliable service providers longactivity domestic and foreigncontrolls postingbased on PD-A1 high service standards fewcompanies selfselectection 20 632 PD-A1 16 questionaires

8. REMUNERATION €5,98 € 9,97 net

9. LABOUR COSTS STRUCTURE CrossborderFixed CrossborderVariable ____________________________________________ Tax & Constributions Net wage

10. tax & contributions • Socialsecuritycontributions • Personal incometaxadvance • Healthinsurancecontribution • Labour Fund contribution • GuranteedEmployees’ Allowances Fund contribution • NationalDisabledRehabilitation Fund dues • Healthtests, Safetytrainings, • Company SocialAllowances Fund dues

11. CROSS-BORDER COSTS OF LABOUR Variable 27% Fixed 2% Mandatory Contact person to represent with localinspection Complemenaryfixedcosts: Apply for PD-A1 Insurance of foreignclaims Cross-borderdebtcollection Legal advice, opinions, analyses Translation other than the employee documentation Foreign exchange differences, conversion Logistics on site • Accommodation • Travel • Board • Compensation for fixed term contract • Holiday compensation • Translation • Notification costs

13. 29 %

14. http://www.tresor.economie.gouv.fr

15. Costcomparison

16. (…) the cost of hiring a worker on a smic(minimum rate of pay) – posted to France by anenterpriselocalised in Portugal, Romania, Poland orSpainisequivalent to the cost of hiring a worker of a French establishedenterprise. „Au total, entermes de coût du travail, pour un employ rémunéré au Smic, recourirdans un cadre légal à un travailleurdétachéen France par uneentrepriselocalisée au Portugal, enRoumanie, enPologneouenEspagneest equivalent à faire appel à la main d'oeuvre d'uneentrepriselocaliséeen France, pour unepriseen charge des dépensesencourues au titre du détachement qui s'élèveraitseulement à 100 € par mois (hypothèse qui paraîtfaible)”

17. CONCLUSIONS Postedworkersearnmorethan we think, morethan minimum rates of pay NET = 10 EURO/hour Therearecosts of labour whicharerelatedsolely to the factthat the service isdelivered in anotherMemberState Crossborder = 29% total

18. COMPETITIVE ADVANTAGEMYSTERY rates of pay margin socialsecurity/taxes workefficiency „same same but different” the same totalcost differentcoststructure

19. COMPETITIVE ADVANTAGEMYSTERY • Price • Quality • (time + flexibility) XenophobakaEconomicPatriot VS. GreedyCapitalistScrooge akaHomo Oeconomicus When do you choose a foreign company? • No localprovider

20. GOALS AND EFFECTS We needmoreposting, not less Fairerrules A levelplaying field The proposal will create a legal framework for posting that is clear, fair and easy to enforce (…) These changes will provide better protection for workers, more transparency and legal certainty and ensure a level playing field between domestic and posting firms while in full respect of Member States' wage-bargaining systems Marianne Thyssen